Ash cloud is another example of the changing risks in an increasingly global economy, says Kevin Knight
The chair of the International Standards Organisation, Kevin Knight, is “surprised” that the air traffic crisis provoked by the Icelandic volcano did not appear on the airline industry’s risk radar.
On the crisis, he commented: "Surprisingly such an event does not appear to have featured as a risk that airlines and many other companies needed to manage…Given knowledge of the activity of the Icelandic volcano and the impact on aviation of past eruptions in Asia, it is surprising that no plans were in place to manage such a disruption-related risk.
"The ash cloud is just another example of the ever-changing risks that must be managed in an increasingly global economy with greater reliance on 'just in time' delivery. One has to wonder just how seriously, if at all, top management participate in planning and testing of disruption-related risk scenarios."
However, Knight pointed out the counter example of an organization with a strong management of risk culture: "United Parcel Service (UPS) quickly redirected air freight bound from Asia to Europe to Istanbul and then loaded it onto trucks for delivery to its final destination."
Knight continued: "Risk is all about uncertainty or, more importantly, the effect of uncertainty on the achievement of objectives. The really successful organizations, work on understanding the uncertainty involved in achieving their objectives and ensuring they manage their risks so as to ensure a successful outcome."
