Emerald Group Publishing Limited
Copyright © 2011, Emerald Group Publishing Limited
Article Type: Defining risk in FM From: Journal of Facilities Management, Volume 9, Issue 3
Since the last issue of the journal went to press, the world has been shaken with devastating earthquakes in New Zealand and Japan. The facilities were hit catastrophically by these events. The fact that these events happened in two of the most advanced economies, should remind us again, in the FM world, about the shortcomings of the way an ambiguous term called “risk” is defined and perceived in practice. No matter how good our technical risk mitigation plans are, they are founded on some basic assumptions, that, for instance, the neighbouring building will not suddenly collapse towards us; the fire service will act quickly if we report a fire; or the council will take care of a heavy snow fall on the roads, and so on. What if all these presumably known assumptions become unknown? How far can our contingency plans go with these new dimensions of uncertainty? Cost-benefit analysis, on the other hand, neglects non-quantifiable information and mechanistically reduces our understanding of risk to accessible monetary values. Risks, as future issues, are subject to be under-estimated or simply treated as externalities. This is the case, in particular, when risk evaluation is comprised of qualitative issues such as behavioural and societal expectations or is about very uncertain extreme events such as an earthquake. Another major pitfall in risk identification is misperceiving of delayed or multi-phase risks. The nuclear power plant in Fukushima was equipped to stand the waves of the earthquake, but fall short of defusing the tsunami. The plant was protected by a wall designed to withstand a tsunami of 5.7 metres but was struck by a 14-metre tsunami. The financial crisis, which started with a liquidity fall in banking sector in the USA, is yet another true example of neglecting delayed risks as a result of adopting a segmented risk evaluation approach. Climate change, aging facilities, and over-educated under-skilled aging workforce are some of our delayed risks with vast economic and social consequences, if not addressed with proper adaptation and mitigation measures. It is also worth mentioning that most measures taken to address business risks lack an incorporation of public perception. We all know that driving and swimming are associated with higher mortality rates than workplace fire or living near by a nuclear plant. But public wisdom places a greater attention on magnitude of a risky choice rather than the chance of it. The fear factor could jeopardize our response to those so-called manageable risks and may significantly increase financial risks. To what extent should facility risk assessment take into account the perception of general public, employees, and stakeholders? Lastly, we are citizens of a sophistically globalized world. Despite countless benefits, global markets have given rise to possibility of risk transmission to people, businesses, jurisdictions, and nations that might be located 1,000 of miles from each other. How prepared are we in the FM sector to deal with these complications? Any risk assessment process needs not only to identify the immediate impacts facilities could impose on or receive from the surrounding built or natural environment but also to account for vulnerabilities that could originate anywhere in upstream/downstream supply chains.
More papers are needed looking at challenges that the FM sector is facing in risk assessment, mitigation, and adaptation.
Fuzhan Nasiri, Michael Pitt