I established the LLC a year ago to work with primarily corporate organizations to help them better prepare and innovate ahead of emerging risks. In particular, this includes the risks from climate-related issues, emerging terrorism risks from the far-right, and disinformation risks.
The premise is that being ahead of the trends and building internal resilience and risk management strategies around them means that you are better able to avoid the financial costs, reputational issues and legal issues that accompany a slower response.
I've worked with a few companies on this issue and also wrote Crisis Readiness: How Business Leaders should prepare for tomorrow, to help ensure my services reached a wider audience.
Increasingly, I have been doing work on climate-related issues in an attempt to get businesses to think through these impacts to their business value-chain.
In this episode
James Blake of Next Generation Risk Management cautions against adopting the ostrich strategy of burying your head in the hot sand and hoping someone else will take care of climate change. In a world with almost everything is politicized, James stresses that you have to separate fact from fiction and accept that climate change is real and is impacting all businesses on a global basis. It's getting worse and businesses have to take action and not sit on the sideline. Climate change is and will increasingly impact your businesses' ability to be available to customers, deal with employee availability during an event, and disrupt supply chains. It is imperative that every business use the strategic planning process to focus on resiliency using scenario planning. James points out that you can earn a 4 to 1 return on each dollar invested in creating resilient infrastructure. He provides a 3 step process for creating a strategy to deal with climate related risks.
A glimpse of what you'll hear
01:17 How climate change is impacting businesses not just individuals
04:23 You can't wait for society to deal with the impact of climate change with you sitting on the sidelines
06:40 Every business strategy must account for the impact of climate change
09:39 You need to map the impact of climate related events to every aspect of your business
14:30 Investing in resilient infrastructure offers $4 in benefits for every $1 of investment
19:43 3 steps to creating a strategy to deal with climate related risks
23:13 Learn about James. Email James at email@example.com
(Note: this was transcribed using transcription software and may not reflect the exact words used in the podcast.)
Centricity Introduction 0:04
Welcome to the Best Kept Secret videocast and podcast from Centricity. If you're a B2B service professional, use our five step process to go from the grind of chasing every sale. to keeping your pipeline full with prospects knocking on your door to buy from you. We give you the freedom of time and a life outside of your business. Each episode features an executive from a B2B services company sharing their provocative perspective on an opportunity that many of their clients are missing out on. It's how we teach our clients to get executive decision makers to buy without being salesy or spammy. Here's our host, the co founder and CEO of Centricity, Jay Kingley.
Jay Kingley 0:43
I'm Jay Kingley, Co Founder and CEO of Centricity. Welcome to another episode of our Best Kept Secret show, where I'm happy to welcome James Blake, founder and principal of next generation risk management, which is a boutique consulting firm, working primarily with corporate organizations to help them better prepare and innovate ahead of emerging risks. These risks include the risks from climate related issues, emerging terrorism risk from the far right and disinformation risk. James is based in Cold Spring New York. Welcome to the show. James,
James Blake 1:20
Thanks very much for him with Jay, I'm looking forward to speaking with me.
Jay Kingley 1:22
James, one of the things that I read a lot about, and I think we all do is climate change. And I want to chat with you a little bit about that topic. Now. We are really inundated with information from all across the political spectrum, from climate change as a present in clear danger to our way of life. And and even our existence, too. It's all a hoax, you can ignore it. It's just a plot by those on the left. But independent of the politics, I do think it's fair to say that the overwhelming majority of science and scientists are in agreement on both where we're at, and where as a world we are headed, and the likely implications of that. And those folks would say, it is not a pretty picture. Now, what we hear a lot of is how it is going to affect us. As individuals, we hear a lot on how it's going to affect our children and our children's children. And it always occurs to me that it is a very sort of personally directed conversation. What you hear I think a lot less of is how should businesses be thinking about climate change? What is going to be the impact? How do you as a business, think about that impact in what you should do? Or, or not do? What things does the business do? What things should the business wait for government and society to do? Strikes me there's a lot of nuance there. But not a lot of clarity, not a lot of discussion as to what these business executives should be thinking in doing. So James, I, I'd like from your perspective, to understand, why is this something that isn't getting the attention that it deserves?
James Blake 1:26
Thank you, Jay. Those are great questions. My own view on this is that in a world that we're, as you say, inundated with, with media and different breaking news stories by the by the hour is often difficult to separate fact from the fiction. But I think in regard to the issue of climate change, both in terms of rising temperatures, and also the increase in the number of natural disasters occurring in different different countries in the US and elsewhere, as well, this has become an increasingly important issue. And, you know, my own take on this, and I'm very much guided by the facts and science on this is that this is an issue which is becoming more prominent, and it's an issue that businesses need to start taking seriously. And to an extent that is, through getting reliable, factual information on what's happening and cutting through the kind of political discourse.
Jay Kingley 3:33
So James, why would a business executive say, you know, I get it, but this isn't my problem to solve. This is a problem for governments and NGO NGOs and our politicians and our universities. And I really, as a business owner, can't make a dent so I'm going to adopt the ostrich strategy I'm just going to put my head in the increasingly warms and wet sand, and just wait for others to magically make it go away.
James Blake 5:10
I think, you know, this, this, again hits that hits the nail on the head, so to speak, I think there are two kind of key points here for business leaders to take into account. One is the direct impacts that climate change is likely to have on on your business, both now and increasingly in the future. And that can be in the event of, you know, a climate driven natural disaster such as a hurrcan, knocking out your kind of critical infrastructure, whether it's IT systems, or whether it's meaning that people can't get to work is increased flooding. And I think that that's obviously a strategic concern for businesses that they need to be able to ensure that they can continue to function when these types of events hit them. So therefore, it is a very significant priority. And I think that the second part, and, you know, we increasingly see that by what's happened over the last couple of years across the world with with COVID, is that, you know, businesses need to be active participants within their society, because ultimately, it's in their interest to keep people employed within their companies. And it's in society's interest to ensure that people continue to be employed, so that they can pay taxes and things like that. So this is very much becomes a giant issue. You know, if you suffer from a business interruption through a natural disaster, and you can't open your work for, you know, three days, four days, two weeks a month, then that's going to have significant impacts in terms of your ability to continue to function. So really, this is an issue that businesses need to have.
Jay Kingley 6:47
And I think what I'm hearing you say, James, from, I think every business executive knows that they need to develop and consistently refresh their business strategy. And you can look at the creation of your business strategy as where the exogenous variables and if you will, the external world, things that you don't have any direct control over meet the things that you do have direct control over, which is typically, you know, your resources and your intellectual property and brand and how you arrange those to meet the things which you don't control in, you know, traditionally, those things have been around, you know, for example, competition, and what competitors are doing around the development of new technologies, which may impact me even though I don't control at all the development of technologies, and even governmental regulation and changes in laws. So I think the framework is well understood, it's just that we're not used to considering the impact of climate change is one of those exogenous variables that you must include in your strategic planning process?
James Blake 8:08
Right. And I think, again, it's, it is going to become an increasing issue that, you know, the C suite needs to consider, you know, you have a handful of recent examples of very large hurricanes that have impacted, you know, large segments of the of the country, they've had significant impacts on different components of, of business operations. And, you know, increasingly as well, you have to take into account supply chains and the ability to get, you know, the necessary goods or supplies into your, into your company. So it's not necessarily even just thinking about your specific office building or where your employees work itself, but also the kind of larger strategic question of how you, you know, your kind of critical goods or get into your organization, and whether, you know, these goods may be at risk from disruption from from from climate related issues, as I say, whether it's a hurricane, whether it's a storm, whether it's rising heat that causes disruption to specific supply chains, all of these things can have impact. And it's really, you know, in my view, it's become an increasing priority for executives to really deal with this head on and think through their impacts.
Jay Kingley 9:28
And that's, I think a great segue changed. We talked about the what was the issue and the problem of not incorporating this. So let's do the mirror image. Talk to us about how if you are a business executive, you should be proactively thinking about incorporating the impact of climate change into your business planning process.
James Blake 9:52
There are very much tangible steps that you can take and I think the number one issue is perhaps to evaluate was the likely impacts of climate change would be on specifically your business. And that is a very much a mapping issue. And again, you know, what, what does your need your business need to do to kind of continue its business operations. And therefore, how might climate related events or natural disasters, impact this on mean that your business cannot kind of continue to do? What it's, it's designed to do its business strategy. So I think that the first and the real kind of number one point here is evaluate the likely impact of climate related risks on your business chain. And that's doesn't just include, as I say, your headquarters or your office building, your supply chains, like what happens, you know, if your staff can't get to work one day, you know, what are the secondary impacts of climate change from raising, you know, natural disasters, when they do occur often result in increased crime rates and things like that all of these can have kind of secondary impacts on your and your office as well. So that's my number one point. I think the number two thing and, you know, you touched on this earlier with, with opening questions was the fact that, you know, we really need to educate and prepare employees for how to react in such incidents, and why it isn't reality. And again, you know, this kind of comes down or back to the fact that we need accurate information, which is factual, and science based and cuts through the kind of political discourse on on this issue. But then more tangibly, you know, what to your staff do if a power surge knocks out your IT systems? Like, what what are the kind of secondary impacts they should do? What do they do if they get stuck at home? You know, what are the policies that you have in place for these people to work? You know, what happens if it's even more significant? And, you know, hopefully, this doesn't happen in this country, but certainly in other countries and elsewhere? You know, in the case of large storms, or hurricanes, people get injured, people have trauma threads, and it's, you know, what do you do to support your staff through these kinds of incidents, you really need to kind of think through this, and educate them through preparedness, then the third thing is contingency planning. And, you know, I think that this, again, kind of links a little bit to the first point of, you know, evaluating the impact of emergent, emergent, emerging risks, climate related risks. But you know, if, for instance, you have a supply chain, and it's going through a location, which is, you know, experienced a large number of climate related issues in the past, perhaps it's New Orleans, or something like that, in the size, and thinking through, you know, potentially other ways you get your supplies into your organization, would it make sense for you to kind of think about, you know, your partners or whatever else, developing other routes, which are away from these kinds of high risk areas, or, you know, even having like secondary warehouses and things so that you can store your, you know, your critical items in these locations, so that if the worst happens, and one supply chain gets knocked out, at least you can continue for a period of time, just really kind of emphasizing this need to kind of think through the issues, and develop contingency plans to kind of mitigate against them. And then the fourth point, and the one I think is really quite important is that, you know, the business value of your farm or your organization, your company, is very much attached these days, how resilient you make your, your organization internally, so things through establishing and risk management committees, if you're, you know, an organization of that size, knowing who's responsible for what and event an emergency happens, you know, your crisis management team that's responsible, is that your HR team needs to be involved in it, you know, which other stakeholders do you need to have a table when this type of thing happens, so that, you know, it can be run as smoothly as possible. You know, again, if these things become a very large issue, and a very significant impact, then you might have to think about engaging PR companies and others to kind of talk to your stakeholders and other shareholders and things like that, to tell them what you've done, and how you prepared for it and how you're managing it. So these are all things you can do to invest in a resilient business.
Jay Kingley 14:00
So James, I think you've highlighted both an issue that is being underplayed, certainly at a more strategic level by most business executives and a path forward on how to think about this issue strategically, which is probably not what a lot of organizations are doing. Which brings up the question, I think, we're gonna have listeners that says, you know, I'm intrigued by what you're saying. But I want to understand how this is going to benefit both me and my business. So let's start with the business executives, decision maker, the one who's got to lead the organization to properly address these issues and concerns. If they do what you suggest, what do you know, how do you see they benefit?
James Blake 14:47
Well, I mean, it's, it comes back in my view to this old adage of an ounce of preparation as a pound of cure. And I think, you know, if you look at the statistics and the World Bank, issued a very interesting statistic on this are they said, you know, invest in a new resilience infrastructure generates around $4 In benefit for every $1 invested. So, you know, you take the the decision now to start investing in resilience in your organization, you know, whether it's CHIEF RISK officers to kind of manage these things, or whether it's, you know, a warehouse to kind of make sure that you have a kind of option, if you're, you know, supply chain gets gets hit, you know, you're likely to, according to the World Bank, and various other estimates, like really kind of benefit from this down the line. So invest in this upfront, is ultimately going to save your business, business money. And I think that that's a very important point for key decision makers. But the C suite level, I think there are various other issues to consider as well, um, you know, if you're a kind of medium or large and are listed company, and unfortunately, we've seen in a range of kind of similar risk issues that are when emergency responses or disasters do happen. And for companies that are not prepared, unfortunately, like share prices, and things like that often do take a hit reputations of the executives who hadn't necessarily planned or thought through these issues. So you can really do yourself a favor here. And now by kind of thinking ahead, and kind of, you know, really getting upstream I suppose, of these issues and showing that you're, you know, someone who can really kind of be ahead of the curve and develop a resilient, resilient business. But, you know, for other people who are who are don't necessarily still convinced whatsoever, I think you can look in places like California, where they've been, obviously, the 2018 wildfire season, which caused around 22 billion damage in property, bankruptcy, local utility, and other kind of significant issues. And if you think of how that could affect your business, and your livelihood, and things like that, I really think it's time to kind of, you know, develop these contingency plans and build the resilience of your organization,
Jay Kingley 17:05
you know, I'll just share with you and even at a small scale, I remember 10, or 10 years ago, or so, I had a business in central New Jersey that was customer facing, and we had Hurricane Sandy. And we were knocked out for two weeks, I had no sense of preparation, no sense of anything, I had no idea what to expect. And we were down for two weeks, it was a mess, I didn't sleep, I was massively stressed. I felt like I had no control over any of my environment, I felt I lost control of my business. It's something that I don't think any business executive wants to go through. And that's the short term. And you you've added, of course, a number of say medium term issues, like if you're a public company, impact on your fair price being hauled up in front of government agencies, where they are really questioning your competence in a very public forum. So I really and it's it's everybody not from the big to the small. And I think you you've articulated well, just one question for you. Is there anything out there James, on an ROI if I do invest in preparation and in in planning for this? Anyone who's put any numbers to when I can spec expect to get back?
James Blake 18:40
Right. I think most likely here is in negotiations with your your insurance company, regarding various policies. And, you know, typically, the way insurance works and these types of risks is that the more significant are, the more developed your resilience plans are and your mitigation measures are, then the lower your insurance premium is going to be. And so therefore, you know, you've saved money on that side of things, then obviously, the flip side of that in, you know, as more natural disasters or climate related natural disasters occur. And if they do impact your business, then obviously you're going to have a higher premiums play if you haven't been placed on these types of plans that are suggested or recommended. I think that's that's one very tangible way that you can think that it's also kind of saving you money.
Jay Kingley 19:37
So I think you've made a compelling argument that the ostrich strategy of putting your head in the sand and hoping someone else's magically going to take care of this for you is not a viable way forward. So, you know, if I'm an executive, I'm sitting here saying, okay, I get it. Talk to me about what an implementation effort would look like if I really wanted to move forward and address this issue in the proper fashion.
James Blake 20:06
Sure. You know, I think that the number one starting point here is a risk assessment, which looks specifically at the assets of your organization prioritizes, you know, what the key components of your organization are, and looks specifically how various climate related natural disasters could impact them, or could, you know, cause them to not work in a way that would be detrimental to your to your organization, you know, different organizations have different approaches to risk assessments. And that's a kind of discussion that takes place, you know, the C suite and potentially board level. But there are obviously, risk management frameworks out there, which provide a kind of benchmark in terms of what you should be doing, it's kind of a kind of lowest lowest level of standard, which is comparable to other other organizations. So you can look at those ISO 31,000 things that that has, as a kind of way to identify and assess risks and, and mitigate them in relation to your to your various assets. I think that's the starting point. And then obviously, it's a case of thinking strategically about where you can, how you can lower the risk and most important parts of your, your, your business enterprise. And that can be, you know, targeted mitigation again, you know, I'm not personally a fan of this kind of like blanket approach, I think that things should be very targeted towards your specific business strategy, and the way that you do your business. And so therefore, having identified, you know, what the critical parts of your business are, you know, really think through the best ways to kind of spend resources on, on, on kind of mitigating the risks to ensure that your business can continue, staff can stay safe, all of these kind of, you know, very important things. And, you know, kind of medium and large companies often, as I said earlier, this might be hiring a chief risk officer who's very capable, and can really kind of think through these issues, and that might save you a lot of money. And they kind of want
Jay Kingley 22:00
James, you have taken a very powerful, I don't even want to say flashlight, I think it's a sort of search light, and you've shined a light to illuminate how executives need to think about this issue, which I think has not gotten the time and attention that it has deserved. So we're going to take a quick break, and then we're gonna come right back to learn a bit more about James.
Centricity Introduction 22:29
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Jay Kingley 23:28
Welcome back. We're talking to James Blake of Next Generation Risk Management. Let's find out a bit more about James. James, let me start with asking you, what are the pain points that you solve for your clients? And why is it that they need you to get rid of that pain?
James Blake 23:48
Well, I think the the kind of key points from my perspective are to ensure, you know, business continuity, ultimately, you know, my view on this thing, and I think I probably differentiate myself from from a lot of other people in this space is that, you know, I want your business to function, I want your business to kind of be profitable, and I don't want risk management to be seen as a compliance issue, I want it to be seen as a way to enable your business to kind of continue to run in the face of, of risk, particularly as we're talking about climate related risks here. And so, therefore, my approach is very much specific to you know, what your organization's mission is, how it sees its kind of critical assets, and then developing things which are going to have very much mitigation measures or plans, procedures, which are very much in line with, with the business itself, and, you know, not trying to make them cumbersome or, you know, investing money where things are not necessary, but very much specific to that the risk climate and the business strategy.
Jay Kingley 24:49
James, one of the things that I think if a company is going to bring in an outside consultant to help them on this issue, they're going to primary rarely be looking for someone who has true expertise who is really great at this type of work in order to make that decision on who to use. So let me ask you directly, what is it when it comes to this type of work in risk assessment, risk management? What makes you particularly good at what you do?
James Blake 25:22
You know, I think that there are two components to this. I think on the one hand, I've had a lot of experience dealing with, you know, a range of, of organizations, some very large companies I've worked with over the years. And, you know, I know that companies have this different risk tolerance levels, companies have different business strategies, different priorities, and things like that. So I understand that that part quite well, from experience with businesses. The second part is that, you know, I've actually been to some of the places Unfortunately, I've experienced different types of security issues, humanitarian issues, and various kinds of crises. And I know firsthand from being in those situations that things can get messy things happen that you don't necessarily anticipate. And so therefore, you know, my mindset very much is on developing plans and procedures and things like that, which take those kind of situations into account. And again, I suppose, the bottom line here is, you know, things need to be explained to senior level, in a very kind of clear, concise manner towards their business strategy. But in addition to that, you need to know that things can happen during emergencies, they're messy, and they're not necessarily what you expect, and people get stressed out. And I think I've had kind of experienced that myself to know how to kind of help organizations to in those situations
Jay Kingley 26:48
I encourage each of our listeners to go to LinkedIn, look up, James, and, you know, connect with them, but pay close attention to his career. And by the way, we'll put his link to his LinkedIn profile in our show notes to make it easy for you. So James, I want to ask a slightly different question to you, looking at your career and your educational background, what happened, you know, whether it's in your personal life, or in your professional life, that would explain why you're doing what you're doing today, in this risk management space.
James Blake 27:30
I think that, you know, from my perspective, and motivates in part by trying to help make a difference, I think that that's kind of been a key component throughout my, my career and whether it's been helping organizations understand risk, assess them and kind of mitigate them to kind of get ahead of these issues, to kind of helping people who've been in these situations, more acutely, in the kind of eye of the storm in different countries, I think that's very much kind of guided me through, you know, different phases in my career, different kind of components, my career, but, you know, ultimately, I want to help people and I want to make things as clear for them as possible. And I think that, you know, if you look at some of my experience, from from, from the early days, through to the kind of other things that I've done in, in various kind of, as I said, international crises and so on, it's kind of been this issue of, you know, really kind of thinking through things and kind of smart educated way and trying to kind of explain them to an audience is, so they can understand how these impact them and things like that. I've said, these are my kind of guiding principles that have have taken me slightly different routes that have incorporated, you know, very kind of like, large, successful kind of multinational companies in house was embedded by a consultancy at the International Monetary Fund in, in Washington DC to to manage various security prices through to a busy humanitarian organization and in New York and some of the various consultancies I've worked for, and advise subsequently, you know, those are kind of be my guiding principles.
Jay Kingley 29:15
James, we've talked about a subject today where I think many companies lack the expertise internally to really address this in an effective and efficient fashion. So I'm sure we've got listeners that would love to reach out to you to continue the dialogue that we started today. So what is the best way for someone to get in touch with you sir?
James Blake 29:42
So my work email is James.Blake@nextgenerationriskmanagement.com And that's definitely the best way to reach out to me.
Jay Kingley 29:49
And I'll drop that email address along with James LinkedIn address into our show notes and as an insert into our video James, I want to thank for coming on the best kept secret today, we really have the opportunity to talk about a subject that doesn't get nearly enough time, enough time and attention, but is going to play an increasingly important role in the viability not just of our businesses, but also of our lives. So thank you for that to our audience. I want to tell you all let's continue to crush it out there. Until next time.