How To Address Low-Probability, High-Impact Risks

 Monday, February 1, 2021

 Risk Management

Before COVID-19, few organizations would have considered prioritizing the remote risk of a pandemic over more common events. However, as the past year has demonstrated, dismissing such scenarios entirely is no longer a viable strategy.

The COVID-19 pandemic has been called a ‘low-probability, high-impact risk’ that no one could have predicted.

This is simply untrue. In fact, since the World Economic Forum (WEF) started releasing its Global Risks Perception Survey in 2007, the risk of a pandemic and/or rise in chronic or infectious diseases has often been featured in the top five risks in terms of likelihood and/or impact.

Even in the 2020 report, while the possibility of a pandemic did not make the list of top risks, special mention was made of the threat.

It found that no country’s health care system was fully prepared to handle an epidemic or pandemic, and that progress against pandemics was also being undermined by vaccine hesitancy, which could pose serious risks for organizations in future.

The risk of a pandemic also has ample precedent.
Risk Management