Like Eleanor Roosevelt once said, “on the other side of that fear, opportunity awaits”. It’s okay to dream; to skydive or bungee jump off a clif, but you can’t pour from an empty cup or jump from the 12th floor of a 10-storey building!
Maybe Jesus got off the boat to walk on water. And yes, motivational speakers and our churches tell you to take a leap of faith too; to “aspire to perspire”. They may encourage you to soar like an eagle, but what of the risk management of it? Yes, eagles take the biggest risks, days after birth, they throw their new offspring off a feared height with nothing but trial, confidence and hope that the new eagle will fly, else it dies. But then, they learn to fly. Good for it, but don’t try it. By the way, when next you see an eagle or any bird fly or lay confidently on a small twig of a tree, remember that it’s more than faith. It’s not that it can’t fall off, or the branch breaking. The truth is that its trust is not on the branch but on it’s own wings.
It’s to bad risk management that most firms are going under post Covid as rarely do any Nigerian business transactions apply the clause of force majeure ( a legal exception to deliver, as a result of unforeseeable circumstances from say pandemics and natural disasters. This legally prevent’s a firm or someone from fulfilling a contract). With it, lesser businesses would be in trouble. It’s to bad Risk Management that we have so many road accidents, bad loans never to be paid back in banks and why over 75% of our agricultural produce are lost due to mishandling, spoilage and pest infestation before they get to any market.
Whether it’s a crusade or a Detty December Concert, a quick question though, do you know if the last social event you attended was insured?
Africans are careless risk takers. I recently was trying to have a conversation with an entertainment project manager about risk management. It felt so alien to him. He hadn’t even heard of concert insurance. In Nigeria, the insurance industries like so many others are leaving money on the table. Take for example; concert insurance is designed to protect concert workers, production staff, and event attendees in the event of an accident or incident that could potentially cause liability issues. In 2019, thousands of fans attending a Jennifer Lopez concert at Madison Square Garden were left in the dark after a power outage struck parts of Manhattan. Jennifer Lopez was forced to abruptly cancel the concert in New York City Saturday night when power outages caused blackouts in parts of Manhattan. When interviewed by the entertainment outlet, she said “They were like, ‘You don’t have to do the show, you know, insurance will cover everything – including you, including the fans, and everything will be fine’. That is the importance of insurance coverage for concerts.
Issues such as water shortages, artist disputes or crowd stampedes are just some of the things that can go wrong. A concert in Nigeria has an average of 20,000 people in attendance excluding the workers at the venue, the vendors and the performers. These people are not usually under any insurance cover and that poses a risk for the event organizers. Prior to the COVID-19 pandemics breakout, the streets of Lagos were usually flooded with numerous parties (popularly known as Owanbe). With all the highflying headgears, expensive accessories and luxurious cars, would you believe that your life and properties had no insurance at that event?
What if the insurance companies push for a bill for a safer project management terrain for large gatherings? Business loss and lawsuits can be prevented this way and it serves as an additional source of income for the insurance companies.
A very avoidable case is that of Davido’s. In 2018, a girl named Karimah allegedly claimed she was robbed and sexually assaulted by a man during Davido’s concert. She said Davido saw it happen and ignored it. Whether all of this is true or not is not the main issue, the main issue is that it was clear enough that there was no insurance cover on the attendees of that concert or the concert in general. If the case had taken a worse turn, Davido might be trying to settle a legal lawsuit against him. Insurance companies should use situations like this to their opportunity.
We need more disruptive thinkers and not just chance takers in today’s emerging businesses. In the words of Glenn Jones, “You don’t have to believe in coincidences because they happen every day. The trick is to be able to discern when something is more than coincidence.” Business is not about coincidences but about risk management. Risk management refers to the practice of identifying potential risks in advance, analyzing them and taking precautionary steps to reduce/curb that uncertainty. Whether it’s in your life or business, it starts from following the sequence of having a Risk Management Plan. And from it being able to identify and prioritize risks, and risk triggers. Perform Qualitative and Quantitative Risk Analysis (from project SWOT Analysis; breaking down your projects into activities and categorizing each of them). Beyond that, it’s looking for the tendency of risks via a Probability and Impact matrix assessment-scoring model). Rank your uncertainty into levels. T
hen, anticipating and Planning Risk Responses for higher-level risks (whether to accept, mitigate or even transfer that risk to either a secondary contractor or an insurance firm). Risk Management is powerful. And there is a science and opportunity to it. I look forward to helping your business with a structural blueprint to manage and grow amidst uncertainty.
Strategy. Business StartUps and Corporate Restructuring Consulting
Uwaoma Eizu is the lead strategist at Hexavia! He is a graduate of Mathematics with a PMP®, two MBAs and over a decade of experience working with startups and big businesses. His core is in building startups and in corporate restructuring. He is also a certified member of the Nigerian Institute of Management, Institute of Strategic Management of Nigeria and the Project Management Institute, USA. By the side, he writes weekly for the Business Day newspaper.