Four emerging risks for corporations

The Corporate Executive Board’s “Risk Integration Strategy Council (RISC)” has released the January 2011 “Emerging Risks Update,” (pdf) noting the following risks on the horizon for enterprise risk managers:

Leaks of sensitive corporate information like strategic planning documents or embarrassing memos (think Wikileaks, which is on its way to becoming a verb, like Google). Strategy: Bolster information security, especially as “new technologies and platforms like cloud computing, SaaS, and social networking gain prominence.”

Shortage of rare earth minerals, an essential component of clean energy technology, computers and electronics (e.g., mobile phones). China controls 97%. Strategy: Other countries (including the U.S.) with deposits of rare earth minerals can open or re-open their mines, “but it can take up to [10] years for a new mine to begin operations.” Meanwhile, “world leaders” must discourage China from unfairly exploiting its position. Continue reading “Four emerging risks for corporations”

17 questions to ask about that gee-whiz tech development

Science-fiction author David Brin explains his method of examining the future:

“The top method is simply to stay keenly attuned to trends in the laboratories and research centres around the world, taking note of even things that seem impractical or useless,” says Brin. “You then ask yourself: ‘What if they found a way to do that thing ten thousand times as quickly/powerfully/well? What if someone weaponised it? Monopolised it? Or commercialised it, enabling millions of people to do this new thing, routinely? What would society look like, if everybody took this new thing for granted?'”

Those are good questions, as far as they go. My methodology for examining new developments (especially technologies) is to ask additional questions, some with a decidedly negative slant:

  • What if it runs into legal or political problems?
  • What if it can be used by criminals?
  • What if it raises ethical or religious objections?
  • What if people prefer doing it the “old way”?
  • What if a cheaper alternative overtakes it?
  • What if it’s too expensive to make or distribute (in volume)?
  • What if it lacks the necessary ecosystem or support infrastructure?
  • What if it runs smack into a counter-trend?
  • What if entrenched interests squelch it?
  • What if it has unintended consequences?
  • What if the roll-out is botched, glitchy, underfunded, embarrassing?

And, when will it emerge from the Hype Cycle‘s “peak of inflated expectations” and “trough of disillusionment”?

Five political surprises for 2011

The Washington Post asked several political pundits: “What will be the biggest political surprise of 2011?” Here are some of the wild cards of U.S. politics this year:

  • Public-sector labor strikes and demonstrations as state/local governments cut budgets. “The same kind of protests that have rocked Paris, London and Rome could erupt in California, New York and Illinois.”
  • Efforts to repeal the big health care reform legislation will have the unintended effect of educating the public about the good things in it.
  • The consensus that marked the lame-duck congressional session will continue in the new year (e.g., the DREAM immigration act could be passed).
  • The emergence of a potentially serious third-party candidate for president in 2012.
  • President Obama will definitely end the war in Afghanistan, while Republicans will have the unpopular position of supporting open-ended commitment.

Underground storage of carbon dioxide could trigger earthquakes

There’s been some talk of storing massive amounts of carbon dioxide underground in an effort to combat global warming. But the law of unintended consequences may have other ideas. “Sequestration” may not be easy to do because of the potential for triggering small- to moderate-sized earthquakes, according to Stanford geophysicist Mark Zoback. “It may not take a very big earthquake to damage the seal of an underground reservoir that has been pumped full of carbon dioxide.”

The other complication, Zoback said, is that for sequestration to make a significant contribution to reducing carbon dioxide emissions, the volume of gas injected into reservoirs annually would have to be almost the same as the amount of fluid now being produced by the oil and gas industry each year. This would likely require thousands of injection sites around the world.

What CFOs worry about

You know how generals tend to prepare to fight the last war. It appears that chief financial officers (CFO) worry about a repeat of the most recent disasters but have trouble identifying future risks. The risks that CFOs say will be their greatest concerns over the next five years — financial meltdowns and supply-chain disruptions — are the disasters that have happened in the last few years, according to an article and survey by CFO magazine.

Top risks identified by 168 senior finance executives

  1. Financial exposure (51%)
  2. Supply-chain/logistics disruption (37%)
  3. Legal liability/reputational harm (35%)
  4. Technology failure (33%)
  5. Security breach (23%)

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Multiple responses allowed.
Source: CFO Research Services and Liberty Mutual Insurance Co., June 2010

“The research suggests that many companies would benefit from a more forward-looking approach to managing risk,” the article says Continue reading “What CFOs worry about”