Navigating the Multiverse of Risk: Building Agility into Our Approach to Risk Management
Risk management, for many organizations, is an exercise in analyzing the past—looking at what went wrong and how it can be avoided in the future. Too often, it’s as though we are driving down the highway while staring into the rearview mirror, trying to navigate the future by focusing on the risks that have already materialized. This approach, while valuable for learning from history, falls short in today’s chaotic, complex, and interconnected world.
In the dynamic landscape of modern business, risk is not a single path. It’s not something that can be easily contained or predicted by merely reflecting on past mistakes. This is one point among many where heatmaps fail us. Instead, risk should be viewed through the lens of the multiverse—a concept popularized in science fiction but strikingly relevant to risk management. The multiverse is a metaphor that captures the multiple possibilities, outcomes, and scenarios that could arise based on an organization’s decisions and the external forces that shape its environment.
ISO 31000 defines risk as “the effect of uncertainty on objectives,” emphasizing that risk management is inherently forward-looking. Risk management must expand beyond analyzing past events to consider multiple future scenarios, probabilities, and the myriad ways in which uncertainty can impact organizational objectives. To manage risk effectively in this environment, organizations need to embrace both left-brain and right-brain thinking—combining the logical and structured with the imaginative and creative.
The Multiverse: An Analogy for Risk Management
In risk management, the multiverse represents the infinite possibilities and outcomes that stem from an organization’s decisions, actions, and the external forces acting upon it. Every choice opens a new dimension, leading to different outcomes, both good and bad. These are not always linear or predictable, but they are interconnected. A decision made in one part of the organization or by an external actor can ripple across multiple dimensions of business, affecting operations, finances, compliance, and even reputation.
Risk management in the multiverse requires looking at risk not as a single possibility but as a web of interconnected scenarios. This approach mirrors the way science fiction envisions parallel universes—each slight variation in decision-making leading to a new, branching outcome. In this way, the multiverse metaphor pushes organizations to think more dynamically about risk.
But unlike science fiction, in the business world, we cannot afford to passively observe what happens in alternate universes. We must anticipate and proactively manage those possibilities by using the tools and frameworks available to us, while also thinking beyond traditional risk methodologies.
The Chaotic and Interconnected Nature of Risk
Today’s risk landscape is chaotic and interconnected, and it is rapidly evolving. From global supply chain disruptions to cyber-attacks, from shifting regulations to geopolitical instability, the sources of uncertainty are more varied and unpredictable than ever. The pandemic was a stark reminder of how risks from one domain (health) can cascade into others, such as finance, operations, and workforce management. These risks don’t exist in isolation; they are entangled in a complex web of interdependencies.
For risk management to be effective, it needs to account for this chaos and complexity. It must acknowledge that the risks organizations face are often unpredictable and can arise from unexpected places. This requires a mindset shift from risk avoidance to risk agility—the ability to adapt quickly and efficiently to changing circumstances, foreseen and unforeseen.
The challenge lies in identifying the critical signals amid the noise, understanding how different risks are interconnected, and recognizing which of the many possible future scenarios will impact the organization’s objectives.
Left-Brain Thinking: The Structured Models
Traditional risk management frameworks—such as risk assessments, control models, and compliance checklists—fall squarely within the realm of left-brain thinking. These are logical, structured approaches designed to bring order to the chaos of risk. They help organizations quantify risks, categorize them by likelihood and impact, and create structured mitigation plans.
Structured models, such as quantitative risk analysis, probabilistic modeling, and Monte Carlo simulations, provide valuable insights into risk. These tools allow organizations to create forecasts based on past data and trends, helping them to plan for the future. However, they often rely on assumptions of stability and predictability that don’t always hold true in a rapidly changing world. Traditional models can struggle to capture the full range of possibilities or to anticipate black swan events—those rare and unpredictable risks that can have catastrophic consequences.
Right-Brain Thinking: Creative and Imaginative Approaches
In contrast, the right-brain side of risk management requires creativity and imagination. It involves using techniques such as scenario analysis, wargaming, and tabletop exercises to explore a wider range of possible futures. These methods push organizations to think beyond what is likely and consider what is possible, even if unlikely.
For instance, scenario analysis involves creating detailed narratives of possible futures based on different assumptions and drivers. What happens if a critical supplier goes out of business? How will regulatory changes in one country affect operations in another? What if a competitor introduces a disruptive new technology? By imagining these alternate futures, organizations can prepare for a broader range of outcomes and identify strategic opportunities as well as risks.
Similarly, wargaming and microsimulations involve role-playing and testing different responses to various risk scenarios. These exercises can be invaluable for identifying gaps in existing plans, training teams to respond under pressure, and uncovering hidden risks that may not have been considered in a traditional risk assessment.
These creative, imaginative approaches require risk professionals to step outside the rigid frameworks of traditional risk management and embrace uncertainty. In doing so, they can better understand the full spectrum of risks their organizations face and be more agile in their response.
Combining Risk Intelligence with Forward-Looking Strategies
The key to navigating the multiverse of risk lies in combining risk intelligence—a deep understanding of the external environment—with forward-looking strategies such as scenario analysis, wargaming, and tabletop exercises.
Risk intelligence involves gathering real-time information from a variety of sources, including geopolitical developments, economic market trends, regulatory changes, and emerging technologies. It also requires monitoring social, environmental, and economic indicators to stay ahead of potential disruptions. By having a clear picture of the external environment, organizations can better anticipate changes that may affect their objectives and operations.
However, simply having risk intelligence is not enough. It must be coupled with proactive, forward-looking strategies that allow organizations to explore different possibilities and prepare for multiple outcomes. This requires embedding risk management into strategic decision-making processes and ensuring that it is not just about compliance but about enabling the organization to thrive in a world of uncertainty.
By running microsimulations, organizations can test the impact of different risk scenarios on their objectives in real time. Wargaming allows them to simulate competitive threats, economic downturns, or supply chain disruptions, enabling them to build resilience into their strategies. Scenario analysis helps them to explore alternate futures, so they can be prepared not only for the most likely outcomes but also for the less probable ones.
Building Resilience and Agility in the Multiverse of Risk
To succeed in this chaotic, multiverse-like environment, organizations need to build both resilience and agility. Resilience is the ability to withstand and recover from disruptions, while agility is the ability to adapt quickly to changing circumstances. Together, these qualities enable organizations not only to survive but to thrive in a world of uncertainty.
Strong risk management is essential for building resilience. By understanding the interconnected nature of risks, organizations can put in place contingency plans, develop redundancies, and create fail-safes to protect against the most critical threats. But resilience alone is not enough. In a world where risks can emerge suddenly and from unexpected directions, agility is equally important.
Agile risk management involves being able to quickly pivot in response to new risks or opportunities, to reliably achieve or exceed organization objectives. This requires having flexible processes, decentralized decision-making, and a culture that encourages innovation and adaptability. It also means empowering risk professionals to use their right-brain creativity and intuition, as well as their left-brain analytical skills, to navigate the complexities of the multiverse.
The multiverse is a powerful metaphor for the future of risk management. In a world where the future is uncertain, and multiple possibilities exist, organizations must move beyond traditional, rearview-mirror approaches to risk (acknowledging there is still a place for this, but it is not the focus). They must embrace both left-brain logic and right-brain creativity to explore different scenarios, prepare for a range of outcomes, and build the resilience and agility they need to succeed.
By leveraging risk intelligence, forward-looking strategies, and creative approaches such as microsimulations, wargaming, and scenario analysis, organizations can not only navigate the complexities of the multiverse but also turn uncertainty into a strategic advantage. In doing so, they can achieve and exceed their objectives, no matter what the future holds.