Preparing for Disaster | Ideas and Discussion | Red and Blue Team
Preparing for Disaster | Red and Blue Team. Twelve years have passed since the Fukushima nuclear accident and thirteen years since the Deepwater Horizon oil spill. The financial crisis that led to the Great Recession took place almost fifteen years ago. More than 20 years have passed since the tragedy of September 11. And also now we are faced the disaster of century Big Turkey EarthQuake Feb 06, 2023.
The gradual disappearance of such events in the minds as they disappear into history is related to the nature of time and memory. For businesses, investing the time and effort to prevent and plan for low-probability and high- impact events is now more challenging and important than ever to address.
Preparing for Disaster! Red and Blue Team
This is not pessimistic thinking or prophesying the apocalypse, but a necessary planning in a turbulent world. When it comes to big disaster risk, the key issue for organizations is how to make critical prioritization, planning, and spending decisions for low-probability and high-outcome events.
Such events can occur due to a corporate error (BP and financial collapse), natural disasters (Fukushima), or acts of terrorism. Unfortunately, however, leaders who do their best to make decisions about what kind of problems or events in the future currently require action and what those preventive responses should be do not have access to past experience seen in commission reports on past disasters.
An important corporate process within the company to answer this alarming question is the “Red Team/Blue Team” approach. This approach, which comes from the tradition of war games in the military, involves a multidisciplinary “Red” team identifying such incidents, prioritizing them for action, and developing action and plans to prevent and respond.
The red team’s efforts should then be thoroughly criticized by a similar blue team. Both teams should have operational business leaders as well as risk-focused technology, policy and legal experts. These different perspectives help the thesis-antithesis process to reveal challenging issues hidden in the shadow of lazy thinking, and not to steal from separate strings.
Red and Blue Team Works
Clearly, disasters like the BP oil spill and the financial crisis didn’t have this kind of robust process. In particular, the necessity of the sharp focus provided by the Red Team/Blue Team structure is vividly illustrated in the recent official report of the “Independent Commission of Inquiry into the Fukushima Nuclear Accident”. The commission, set up by the Japanese legislature to write a report independently of the main actors, consisted of leading scientists, doctors, lawyers, policy analysts and businessmen.
The meaning of the report on risk management extends far beyond the nuclear industry. This stems from the report’s most fundamental conclusion: The events after the earthquake and tsunami were predictable, and rather than a natural disaster, it was “a fundamentally man-made disaster that should have been foreseen and prevented.” The effects of the disaster could have been mitigated by a more effective humanitarian response.”
The underlying cause of this human error, according to the report, was a lack of negotiation and debate: “the root causes are the traditions embedded in Japanese culture, our reflexive obedience, our unwillingness to question authority, our commitment to ‘following the program’, our groupism, and our lack of communication.” “We find ignorance and arrogance unforgivable for any person or institution interested in nuclear energy,” the commission said. These problems were relevant both for TEPCO and for its relations with regulators. However, these problems are not limited to Japan.
Preparing for Disaster | Dimension of the disaster
Focus on one dimension of the disaster to show how a robust discussion process within the organization will be beneficial in all sectors. The biggest impact during the earthquake and tsunami was the complete power outage at four nuclear plants. As a result, not enough coolant reached the reactors, and the reactor cores were damaged. Off-site power lines had broken down, and generators down the plant were disabled by water. The commission said “earthquakes and tsunamis are unpredictable but also unavoidable events”.
Regulators, or TEPCO, have not recently discussed international practices, worst-case scenarios, or one of the most significant hazards at a nuclear facility: a power outage. (According to the report, Tepco and the regulator “knew that a tsunami above ground level of the power plant was possible and would lead to complete energy loss.”) alternative solutions could be produced.
If there had been a Red Team/Blue Team process, some clear and not too expensive alternative solutions could have been produced in the unlikely but predictable event of a major earthquake and a large tsunami occurring at the same time. Extra generators with waterproof electrical connections could be placed at higher levels away from the plant, or investment could be made in mobile power units to be installed away from the beach.
Thus, a Red Team/Blue Team process needs to address two critical questions that senior leaders need to think about. First, are the potential impacts, even if the probability of an event low, so devastating as to warrant investing in appropriate preventive responses? Careful scrutiny is needed on how to address risk in effective and relatively economical ways (such as alternative energy sources at Fukushima). Second, if prevention and response plans are to be followed, is there a systematic effort to implement them? For this, coordination with the state; meaningful training to ensure staff are prepared to behave appropriately; exercises and a plan to communicate fast-changing developments to ensure reliability are needed.
Based on experience in a large diversified global company, I strongly recommend that companies place this kind of carefully structured internal discussion at the center of their risk management process. The constructive tension created by competing teams and the encouragement and support of business leaders are essential. Without them, carelessness, indifference, and the risks of not examining important technical, financial, or other assumptions can cause a company’s employees, facilities, information, and supply chain to succumb to events.
Risk management and safety. Preparing for Disaster!
Of course, the Red Team/Blue Team process is only part of building a culture of risk management and safety. Nor can this process replace a strong governance role in situations involving hazardous technology or systemic financial risk or natural disasters.
However, this process is not a luxury, but a necessity. Every CEO needs to create a discussion between the Red and Blue teams quarterly or twice a year. In this way, the potential catastrophic events that the company may encounter and how to deal with them can be evaluated. Lessons learned from past disasters are important. However, a continuous and robust process for competing teams to truly explore future risks is even more important for business and society. When it comes to destructive events, the past is only part of the beginning.