It may have been quite a while ago, but one major world event that most living adults in the world today readily recall is the tragedy that occurred 31 August 1997 in Paris when Lady Diana, Princess of Wales, was killed in a high-speed automobile crash along with her companion, Dodi Fayed and their driver, Henri Paul.
Diana's public funeral at Westminster Abbey on 6 September 1997 drew an estimated 3 million mourners in attendance and an estimated 2.5 billion TV viewers worldwide. The coverage completely overshadowed news of the death of Mother Theresa that occurred the previous day.
Obviously, much has been written about the accident, the drama surrounding the royal family's reactions, the formal inquisitions and numerous lawsuits that followed – all readily available on the World Wide Web.
The purpose of this account, however, is to learn a valuable lesson in managing risk from the loss that was suffered. We often use this event to train staff as well as clients in creating effective risk scenarios.
A significant number of things that happened on that fateful night contributed to the end result:
- It was dark and late at night
- The victims were being followed by paparazzi
- The driver was speeding to avoid the paparazzi
- The driver had been drinking in the hours before the crash
- The route taken led them through a narrow tunnel
- The tunnel had large support columns with no guard rails
- None of the occupants was wearing a seat belt
- Local laws required medical treatment at the scene rather than immediate transfer to a hospital [Time of impact – 12:23 AM; time of ambulance departure – 1:41 AM]
- The paparazzi continued to photograph Diana and others after the accident
- Diana experienced cardiac arrest along with other injuries
There may have been other contributors as well. The point, however, is that without all of the contributors – if any one of them had not been present – the accident may not have occurred, or might not have resulted in Diana's death. So, what good does that do us? What can we learn from it?
First, that accident should not be viewed as a snake slithering through a maze that somehow bites you with a loss, despite all the preventive controls you put into place. Rather, any accident actually closely resembles a line of dominoes, awaiting the final one to arrive -- resulting in the loss as shown here.
Doesn't that more closely describe what happened that night in Paris? It involved widely divergent and unrelated causes and influences (personal behavior, environmental conditions, machinery, management decisions) all coming together at the same time and place, in a specific sequence, on a really, really bad day.
Our approach to managing risk is built on creating "total risk scenarios." The "total" means that there are several required elements in each scenario. First, there must be an event that can possibly happen (it must pass Murphy's Law) and be taken to a maximum worst case. If a fire can happen, the scenario must include the worst possible result (entire building burns, x people are killed) rather than something less (a single personal burn injury). Next, it must involve elements of man, machine (physical world), media (all environments) and management. Finally, it must be priced -- assigned a cumulative total cost to the organization should it occur.
Risk scenarios can – and should – be written by as many different members of the organization as possible. They must never name individuals by name or position. They should be 3 or 4 sentences in length and include as many dominoes as possible (i.e., go as far back upstream of the final event as possible). A good risk manager should be able to take the effort of a well-meaning contributor (scenario author) and enrich it to meet all of these requirements and ensure that it, in fact, passes Murphy's Law.
It is then ready for the next step – judgment by a jury of peers.