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Learning from risk

The past year has shown just how volatile the risk landscape can be. But it’s also shown that how organisations respond can set them apart from competitors, as leaders who have demonstrated resilience and adaptability have tended to emerge stronger.

In this episode, we discuss how the new and evolving risks we've faced recently have made us change our approach for good. Host Emily Khan is joined in our virtual studio by two members of the steering committee guiding the focus of our Rethink risk research - Kieron Boyle, Chief Executive of Guy's & St Thomas’ Foundation, and Mohammed Khan, a partner in our UK insurance and actuarial practice, and a specialist in measuring and quantifying risk.

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Emily Khan, Kieron Boyle, Mohammed Khan

Emily Khan:

Hi everyone and welcome to this episode of our Business in Focus podcast. I am Emily Khan, a director at PwC and I am your host for this episode. The past year has shown us just how volatile the risk landscape can be, but it has also shown that how organisations respond to risk can set them apart from competitors, as leaders who've demonstrated resilience and adaptability have tended to emerge stronger. Here at PwC, we've started a programme called Rethink Risk, a platform for a big conversation about how the risk landscape has changed, and how we need to change our approach to risk. We are going to dive right into that conversation today. I am delighted to be joined in our virtual studio by two members of the steering committee guiding the focus of our Rethink Risk research, Kieron Boyle and Mohammed Khan, no relation of mine. Kieron is chief executive of Guy’s and St. Thomas' Foundation, who seek to build the foundations of a healthier society by tackling the huge health risks we all face. Mohammed is a partner in our UK insurance and actuarial practice, and a specialist in measuring and quantifying risk. Very warm welcome to both of you. How are you both doing today? How are you, Kieron?

Kieron:

I am really well, thanks Emily. It's great to be with you both, it's a sunny day in London, which is something that you don't hear very often, so I am good with that.

Emily:

Well, very nice to have you here today. How about you Mohammed, how are you?

Mohammed Khan:

Yeah, so I am very good. I am in North West London, it is sunny as Kieron said, but it's cold, so we really need the sun to warm up May.

Emily:

Yeah, completely agree. I am in East London, so we are covering off three compass points there, and it is sunny, but cold here too. I am going to get us going with this big conversation. Kieron, I am going to ask you to kick us off today, if I may. Clearly, the backdrop to this discussion about the need to Rethink Risk is of course the COVID-19 pandemic. Can you remember the moment that it became clear that COVID-19 was going to be a situation that we just hadn't experienced before and that it was going to change things forever?

Kieron:

Yeah, what a good question. I really can, actually. Like everybody else, also that mixture of personal and professional of how the two were happening at the same time. The personal one for me was, as a family, we were in a hospital with our son, who was an in-patient in hospital. It was when the doctors were coming around and basically working out whether everybody was in the hospital, who would normally need to be there, whether that was the best place for them to be, they needed the beds, they needed things. That sense of creeping, this is different, this is actually quite scary. Also, when it's your family as well, it feels especially scary. That was happening at the same time, so I run a health foundation. As a health foundation we focus very clearly on the inequalities in society, why health is distributed so unfairly in lots of ways. There was all this language about how COVID was going to be hitting people equally, it was going to be this great leveller, but very early on, you were saying that doesn't necessarily look to be the case. It is those two things happening at the same time, was that personal sense, but then that sense that well actually this is repeating at scale, patterns that have been there all along around our health in alarming ways.

Emily:

Yes, that's quite a powerful memory there that you provide, and I can imagine that was very scary, and I hope your son is home and well now. Mohammed, how about you, where was that moment for you?

Mohammed:

I'd say it was easy for me, because it was my birthday, 11th of February. It was when the WHO announced that they were going to name this novel coronavirus, COVID-19. I just thought, as soon as they've done that, I knew that it was going to be a global issue, and then it seemed to accelerate after that. Just like Kieron, actually, shortly afterwards my wife, who's a cardiologist was in a meeting at their hospital and she was told that she would be on the rota to be the consultant for the COVID ward, because they fully expected more and more patients to come in, because they were starting to see it. It was actually as early as February that I knew it was going to be bad.

Emily:

I am really struck by both of your answers there. The immediate recollection is a personal one. When I think about the conversations that we're having about Rethink Risk, that is right at the heart of it, is that risk is a personal topic, it's something that we worry about, as leaders, and even in a business setting. So, how you respond to it, it also requires some personal outlook and consideration as well. That's quite striking, as we get into the conversation that we've gone there so quickly. I am keen to pick up Kieron, you talked there a little bit about Guy’s & St. Thomas' and the role that you have played historically, and your purpose. We've heard a lot of organisations throughout the pandemic, talking about having a renewed sense of purpose as a result of the pandemic. Tell us a little bit about what that's meant for you as an organisation, given that your purpose is all about health risk.

Kieron:

Yeah, for us, what we do is we invest in a healthier society. We go about that in lots of different ways, but the burning question for us, is when we invest in a healthier society, a healthier society for whom? As I said earlier, health is distributed very widely, and in ways that are often very unfair, very inequitable, and COVID is that pattern. For us, there is a, I wouldn't say renewed sense of purpose, but a much greater sense of conviction in the mission. To tell a very practical story of COVID, is to tell the practical story of health inequalities overall. As I was saying, it's very clear that COVID hasn't been experienced equally. It's very clear that for some groups, a lot of risks had landed at the same time. If you live in an overcrowded house; if you travelled to probably multiple jobs on crowded public transport, because you couldn’t work at home; if you had little say over your working conditions once you're at work, your threat from the virus was higher; and it goes beyond that. Your threat from that virus was higher if you live in polluted areas, or if you lived on streets with few affordable healthy eating options; it was higher if you had pre-existing health conditions, which you are more likely to get at a younger age if you lived in areas of lower average income.

For us as an organisation, that pattern is the pattern that actually describes a huge range of things, from distribution of childhood obesity, to how you might think about mental health, to how you might think about the distribution of other multiple long-term health conditions. Really, for us as an organisation, what this has done is allowed us to tell a more concise story of patterns that were there all along, it has fast forwarded the clock.

Emily:

I really recognise what you’ve just been talking there about, the intersections between these risks, something that we're talking about a lot. Actually, on just the prior episode of this podcast that I hosted, we were talking about the intersections between COVID-19 and mental health risk, and diversity and inclusion, many of which talked to the themes you were just talking about there as well. That does feel like something that's better understood now, and that people are asking about and thinking about differently as we come out of the pandemic, how those risks will connect. One of the things, and I know you both know this, because you're on the steering committee for the research, one of the things that we have been interrogating is how business leaders and the general public view risk either the same or differently. We've been doing some public perspectives research to compare with our CEO survey findings on some of the key threats. I've been really struck by how decisive members of the public are about what they are going to change, what they've liked, maybe about lockdown that they're going to do more of, or things that they're not going to go back to doing. There are quite clear themes, for instance, on how much people want to commute in the future or how much they're going to spend on certain types of activities that show that individually and personally people are feeling quite decisive. It’s interesting comparing that with the business mindset, and the need for change, and the need to be decisive and the parallels between the two. I am interested, you’ve both seen the findings and details. I might ask you both, were there things that struck you in what we've seen in that data as particularly interesting.

Kieron:

It was fascinating data, Emily. The thing that really stood out to me from the data was, what didn't really seem to be on the list, but surely this has got to be the biggest risk that we're facing as a society. The main one for me was around climate. It was surprising, also a bit worrying, climate wasn't a top risk for business leaders. You can see why in a way that it feels such a long way off. Of course, the action that we need to do to respond to the climate crisis is action right now, so that was a surprise and a concern.

Mohammed:

Just following on from that, what I thought was really interesting, and Kieron has intimated is, how high up it was for the public, because it was within the top three. I was surprised and not surprised by that, because the thing that I was intrigued by, Emily, you, me and Kieron are always avid consumers of data, and what data analytics tells us. But if we would have run that public polling, let's say, three or four years ago, I do wonder how high up in the public perception climate would have been. Because it's so important for the public, I do think organisations or businesses have to take heed of that and think what are we doing, is what we are doing enough, do we need to accelerate what we're doing.

Emily:

I agree with both of you on that and I'm struck. Actually, it's interesting hearing your reflections as maybe an observer of the CEO findings, because many of us who’ve read them every year have seen that actually climate has gone up the list, but you're right, Kieron, it's not at the top yet. Actually, members of the public would put it much near the top, which is, it's clearly important as you say, when there are consumers, employees, and wider stakeholders.

Kieron:

There was something within that Emily for me around, there was other data in the survey, which showed that the public also expect quite a lot of businesses, like what’s business' role in mitigating these risks. Very clearly everybody was looking to Government to be a huge part of the response, but business was very front and centre in what the public expected, like whose job it is to tackle this stuff. That's very interesting. As a foundation we work closely with a lot of businesses, because we are focused on urban health as we are, you have to focus on who shapes the environments around cities, and a huge part of that is shaped by businesses and investors. One thing I noticed in our work is that there are a lot of organisations that have huge potential to shape cities, who don't really see it, once it's shown to them, are up for it, but don't necessarily lead from it. I wonder if some of the experience of the pandemic will open up opportunities for more people, and more businesses, and more investors to reflect on what they can do to mitigate these risks.

Mohammed:

That's right, Kieron, one of the things that I found really interesting was, in the public polling, how much more people expected of Government, and themselves, and of businesses as well, so it was interesting. It's quite a UK contextual thing. As an example, 50% of the UK public thought the government would be best placed to mitigate the risks. The thing that I've been reflecting on, and you've actually explicitly mentioned it, there's definitely, and I’ll call it an opportunity for businesses and organisations to take the lead, the way I phrase it, is the increasingly changing environment we are in. My personal reflection of 2020 was, you saw an acceleration of many of the trends of what was already happening. How many of our listeners now almost exclusively shop online during 2020, because we've been forced to. Now, of course, we were shopping online before, but if you think about our post-pandemic shopping habits compared to our pre-pandemic shopping habits, probably do more of that. One of the findings that I found interesting in the public polling was how worried people were about their economic circumstances, they were worried about rising unemployment, they were worried about whether they will still be in a job, they were worried about the changing nature of work about the automation of jobs. I do think businesses and organisations can take, what I’d say, more of a lead in helping people understand how they will help changing work patterns, how they'll help create new jobs. Yes, we will automate jobs, but that will create jobs in other places.

Emily:

I am struck that you both explicitly referenced businesses taking the lead in your answers, that's clearly something that's come through strongly, that role of business and business leaders in tackling these areas of risk. I would like to dig into that a little bit more, because clearly at the heart of that are our individual leaders that have been through that human experience that we started our discussion with. I am interested in asking both of you. You've got different leadership roles, how has risk and your experiences of the last year transformed the way you are leading personally as you take forward the areas of the respective organisations that you work with? Kieron, maybe I'll come to you first with that question.

Kieron:

Yeah, I certainly lent into certain ways of working more and more. I don’t know if it transformed, but clarified, perhaps, certain things. The importance of coming at stuff from multiple angles, the real question of whose voice is being heard has become important for me. I will give a practical example, and a bit of why that is. The importance of seeing leadership has, setting the long-term direction, but really be willing to try things to test it, to learn, and then have the ability to shape things differently as a result of what you've learnt. It's really clarified the importance of those for me. For me as a leader, at a personal level, it brought questions of kindness, more into the leadership vocabulary and what I talk with my teams about. That sounds really fluffy, but kindness is actually a very important aspect of leadership that perhaps over the past year we've had an opportunity to explore as leaders, more than we might have thought was important before. It's to the benefit of organisations, but if I may, just very quickly on that, whose voice is in the room, and it's such an important one for understanding of risk.

I'll give a very practical example of the work that we do. As the pandemic kicked off, we were really keen to understand what was happening on the ground in the area of London where we focused most of our work, but most of the approaches that we use to do that, we just couldn't do because of lockdown. That helped us accelerate a partnership with researchers based in the communities where we work. It is research with the highest standard done by people trained up to be researchers, but based in the community have cultural nuances to really understand what's going on. The areas we work are some of the most diverse areas anywhere in the world. One of the things that came through from this community researchers very clearly was around concern with the healthcare system, a lack of trust in government, and a lack of trust in the healthcare system as well, which is counterintuitive, because you take the NHS, it's one of the most trusted brands in the UK, but not everybody shared in that trust. Why that was important to know, is that when it came to vaccine rollout and questions of vaccine hesitation, you could see the signals way before, that was flagging of concern to the health system, or the ministers, or hitting the papers, all things, but whose voices were in the room to know that, because the signals were there, frankly if people have been asked, they would say. The act of leadership, coming at stuff from multiple angles, but really trying to surface the perspectives of people, who can actually tell you things you need to know, it's just vital.

Emily:

That sounds so relevant for life beyond as well, was the example you gave, that’s clearly anchored in COVID that feels very true of now and the challenges we face, as we hopefully, touch wood, come out at the other side. Does that resonate with you, Mohammed?

Mohammed:

It does actually. I was really struck when Kieron was talking about his comment on kindness. I was thinking about, personally, for me, the one thing that I've learned through 2020 and 2021, I'd reframe it as demonstrating empathy. When I think about any conversation I have, almost with anyone now on a video call, I am much more explicit and deliberate about starting conversations with asking people how they are, what's happening with them in terms of them in their family. Within our practice, we've actually got a Mumbai practice, and obviously during March and April we've seen cases spiking in India. You have to be really sensitive when talking to your team about it and being more, if I can phrase it this way, ‘human,’ sounds like an odd thing to say. I see it all around me as well, Kieron, I am really interested in your view, but everyone I interact with now, I see a lot more with them as well. It's like, we've all changed in terms of my phrase being more human.

Kieron:

Yeah, it's interesting, that as leaders we need to remind ourselves of that. I agree with you, that's only going to get more important. I don't need a large organisation, but we're just 100 odd people or so compared to your massive one, but take for example hybrid working, a lot of the ways in which we've learned to be with one another in a professional environment, will just be massively changed ahead. There is that question of how thoughtfully are we leading into that and what are some of the things that will be easy to forget. The being human aspects will be dead easy to lose in this transition that we are seeing in the world of work.

Mohammed:

I completely agree. At PwC, we’ve recruited 1300 graduates in September, and of course, we’ve recruited them into a virtual world basically, because everyone was at home or they're at their flat or they were at their house. One of the interesting things I always think about in terms of just leadership at the moment is, and is even more so when we go to the hybrid world, is what kind of culture do you want to instil in people, and how do you do that, how do you communicate that culture in a virtual world. That's actually quite a key risk for many organisations, because they may have had a very strong culture, but how does that continue when many of your interactions may actually just be through a computer screen.

Kieron:

It takes us back to something that you mentioned earlier, Mohammed, around that we are all speaking about the role of businesses in affecting positive social change. That question of culture and values is such an interesting one for me. As I say, we are in an organisation that works with people, with decision makers, be they in government or big business, or it's civil society, and they might run massive organisations, or they might run grassroots ones. We work in close collaboration, and the thing that I have always spotted, having spent a career trying to do this cross sector stuff, is that we talk about sectors, or of the institutional backgrounds, but we don't often talk about the values and the cultures. Often there is huge alignment there. We work on childhood obesity as an issue. As part of doing that, we work very closely with fast food companies, a bit of a strange place for health charity to be, but it's important. Actually, the individuals that we are often working within those fast food companies, those companies, are responsible for major public health challenges. The individuals we are working with are very values aligned and actually trying to end that same outcomes that others come from different backgrounds, be it in government or civil society are, just got different tools and mandates available to them. This question of how do you surface values and spot for cultural alignments, it’s really critical to how do you then get that sort of integration, and in particular, how do you get businesses more involved in these things that the public are expecting of them as it relates to the health of society around them.

Emily:

That's so integral to the spirit of Rethink Risk, is that the big dramatic risks that we're talking about, we've touched on health risks, we touched on climate risk, no one organisation can tackle them alone at a systemic level or even for their own organisation, because we are all interconnected in complex value chains that mean we need broad coalitions to work these things through. You're absolutely right, where you can find common ground and values and purpose, particularly given that so many organisations have felt such a renewed sense of their purpose coming through the pandemic, that feels like a real opportunity there for collaboration in some of these areas, which I personally find quite exciting.

Mohammed:

I would agree with that Emily, I would probably go further. One thing that the past year has surfaced, I touched on this before, it's just the ever-increasing pace of change as well. It doesn't matter almost what sector you work in, or what part of the country you are in, the past year has brought that all to the surface. Therefore, the dynamic risks we all face are just all around us. Increasing digitisation, increasing automation, increasing use of mobile phones and personal devices in the world all around us, and you have to think, almost irrespective of the kind of organisation you work for, what are the risks that you therefore face, and those risks are changing all the time. One of the things that, to come back to your original question about, has risk transformed the way that I lead, and one of the things that I am trying to do with all the teams around me is, one, acknowledge all of those changing risks, and say, ‘well look, you can't be on top of all of them, you can't mitigate them all away, so you've just got to acknowledge they're there,’ and almost drive that culture through the people I work with, through the organisations that we're in. That's the purpose of Rethink Risk genuinely, which is, we always think of risk as a negative word, it's all around us, it's just here, you just have to acknowledge it. The question then becomes, what do I do about it given that it's there, that's the important bit. For me that's been a big learning point from 2020 and 2021, risks are there, okay, so what are we now going to do about it.

Kieron:

I would just jump in on that Mohammed. I couldn't agree more. Certainly, in my experience, there's a lot of time spent diagnosing the risks, which is of course important. The facility to respond and to respond well and with agility, and with genuine insight and understanding to what's happening, surely that's got to be where we are basing the effort. Even just take COVID, which has variously been described as a black swan event, except it wasn't it at all. We knew that a pandemic was coming, I used to work in government, and I was involved in drawing up a list of things that we are worried about as a country, and pandemics were on that list 10 years ago. But had we collectively spent enough time thinking about how we would respond to things, when to your point, Emily, something was so big that it impacted on everything at once. COVID has shown that in an accelerated way, climate is showing that at a huge level, will be over a longer time scale, but that ability to respond collectively and to respond with emphasis and understanding of the systems that are around you, that for me is what's exciting about the potential of rethinking risk.

Mohammed:

I couldn’t agree more, because a simple example, what happens if we have another global pandemic, and touch wood that doesn't happen, or we go into lockdown again, what does that mean for organisations. In my industry, the insurance industry, one of the thought process is that, you’ve got to think about, with all this digitalisation is, ‘well, okay if a claim event occurs, so let's say you damaged your car, or something happens to your house because of a storm, well why can’t we just transfer the money.’ This is a really simple example, for doing that repair, straight to the customer, because if we're all stuck at home, then what they actually need is access to the cash, that they can then commission someone to go and fix the house. It's just a really simple example to your exact point of, well we know the risks are there, to the exact point, they're not black swan events, they’re more, one of my colleagues calls it, a grey swan event, COVID-19 was a grey swan event.

Kieron:

It’s a grey pigeon, isn't it?

Mohammed:

You're right, it's not a swan at all. No disrespect to pigeon lovers out there, but we've got technology, coming back to my earlier point, what's the opportunity that we can see given the risks that we face.

Emily:

We are almost running out of time, and we've got right into the heart of Rethink Risk. I am going to ask you both for a tip for people who are just starting to think about this today, having been listening to our discussion. If you're going to give them one piece of advice to start rethinking risk for themselves, what would it be? Kieron, I am going to come to you first, if that's okay.

Kieron:

Lots of people are talking about the importance of, in these very uncertain times, about setting yourself up to learn. That's good advice. The bit that I would give on top of that is to set yourself up with the ability to make changes based on what you've learnt, that's an under explored area. Important to learn, but in some ways, even more important to put yourself in a position that you can actually really change yourself based on what you've learned.

Emily:

Brilliant, how about you Mohammed, what’s your one tip?

Mohammed:

Don't think of risk as static, think of risk as being dynamic. Kieron mentioned it earlier. Listen to all the voices around you in terms of the risks and then say, ‘okay, it's there, what's the best way, what's the opportunity for me to navigate that dynamic risk environment?’

Emily:

Sounds like we are rounding out this episode with a focus on both listening and learning, which feels quite apt for the discussion we've just had,certainly for me, and that is it for another episode of Business in Focus. Thank you both Kieron and Mohammed so much, a fascinating discussion. I've really enjoyed it, and I hope the first of many. Of course, thank you to everyone for listening.

If this conversation has got you thinking about how you can rethink risk, please do visit our website at pwc.co.uk/rethink-risk, where you can find the research findings that I mentioned earlier in this episode and a wealth of other insights and stories to inspire you. Finally, don't forget to subscribe to keep up to date with future episodes. Thanks everyone and stay safe.

Participants

  • Emily Khan, Director, PwC
  • Kieron Boyle, Chief Executive of Guy's & St Thomas’ Foundation
  • Mohammed Khan, a partner in PwC's UK insurance and actuarial practice
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