Hostile or challenging environment – Do benefits of operating in such locations compensate for risks?

An interview with Mrs. Irene Kamba-Maltezopoulou MA, MSc, a Risk, Crisis and Disaster Management practitioner.

What do we mean when we say that a location is challenging or hostile?

There are many characteristics that can contribute to such a categorization, but the most prominent ones are: political instability, conflict, civil unrest, corruption & bureaucracy, extreme terrain, weather conditions or geopolitical developments. This means that there are no absolute categories, but any locations can become challenging or openly hostile at any given time. It is something that is often overlooked when companies are assessing potential new locations in terms of countries and/or areas.  Just because something appears stable and safe now, it doesn’t mean it will remain that way and just because something is challenging at the moment, it doesn’t mean it will stay like this forever.

Are there any benefits to companies willing to enter such a location?

As with most things, there are benefits associated with the risks that any company is willing to undertake.  The company’s Risk Appetite in connection to it is actual Risk Tolerance can be the defining factor in ripping great rewards from being one of the first or few able to operate in challenging -yet rewarding- environments. Opportunities can be exploited when one is aware and well prepared.

What kind of risks are present in those locations?

All risks are present at all times, in all locations. What is different is the probability. We shouldn’t really be discussing whether risk is present but rather assess the likelihood and/or impact of adverse situations on company operations. There is always risks associated with terrorism, criminal activity, accidents, natural disasters. In challenging or hostile locations, all these are present and often interact to produce an unstable social, political and business environment.

What are the biggest challenges present in those situations?

The biggest challenge is to secure people, facilities and equipment while maintaining business continuity and building business resilience. It might appear easy on a planning level, but the actual everyday challenges can throw any plan out of the window. In addition, in those locations, you can rarely count on emergency services, and assistance from public organizations. In a sense, you are on your own when something happens, and this places extra pressure on internal controls and procedures.

What kind of crisis or incident is likely to happen?

Even the simplest incident can turn into a crisis when not addressed properly at an early stage. Crisis, after all, is nothing more than a point in time and space where you only have two options: face things effectively and return to normal operations or fail and walk towards a disaster. It works like that in everyday life as well, a simple toothache -when left unattended- can turn into a painful and severe issue just because it wasn’t addressed early and efficiently. Security works pretty much in the same way. Prevention and deterrence are the safest and most effective option; reaction is the ultimate resort and can be far more difficult especially in a challenging location.

How can a company ensure success in those locations?

The first step would be to secure partnerships with local communities. Having eyes and people on the ground is a valuable asset that can have life or death impact during a crisis. Secondly, by maintaining an effective awareness of the situation on a strategic, operational and tactical level. See the forest, but also see the tree. Training people and providing proper and adequate equipment is another crucial element.  In that way, you can maximize benefits and minimize risks.