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Editor's Notes

1. Bruce Braes is a Risk Management & Organisational Resilience expert. He boasts over thirty years of diverse experience in risk, crisis, emergency and executive business management.?? He has successfully developed and implemented both Enterprise and Project Risk Management strategies and techniques across major organisations spanning a wide range of industries and geographical locations.?? He is an experienced leader, with expert knowledge of the inter-relationships between risk management and other management disciplines including business continuity, project management and strategic planning. Internationally recognised as a presenter and thought leader on risk management and organisational resilience matters he has presented across Europe, Africa and the Asia Pacific regions. He regularly reports on project, business and catastrophic risks at the highest corporate and governmental levels, as well as delivering cost, resource and schedule risk management solutions. Bruce is based in Perth, Western Australia and is currently the Risk & Quality Manager on the $7.2MM West Pilbara Iron Ore Project
2. Horizon Scanning is a process undertaken to better understand changes in risk, the velocity of the change and to identify the indicators to change, the process is supported by peer assessment and benchmarking in an effort to identify potential opportunities, challenges and likely future developments that will impact upon your organisation. Horizon Scanning is both an intelligence and evidence based process undertaken in an attempt to understand future developments. For Horizon Scanning to be successful certain requirements must be met. Horizon Scanning requires ¡°Out of The Box Thinking¡±, removal of preconceptions and it must be driven by a desire to discover something new. Access to numerous sources, ideas and challenges is essential, as is the ability to look beyond personal and organisational comfort zones, specialisations and environments. Finally the ability to recognise and identify opportunities and risks in a well-ordered manner is essential.
3. The objectives of Horizon Scanning are: - Detect - Trends, Situations and Events Identify - Opportunities, Risks, Threats and Challenges Determine - Strengths and Limitations Provide - Platform for informed decision making
4. The most important objective of Horizon Scanning is to identify issues that are only just beginning to emerge, and whose impact is currently highly uncertain. These weak or conflicting signals are worth tracking, although some will turn out to be irrelevant, a small proportion will develop into the critical issues of the future. These issues often emerge in disciplines or sectors outside the scanners core area of concern and this highlights the importance of scanning the horizon widely. At this point I would like to introduce you to the landscape in which I utilise Horizon Scanning: I am currently the Project Risk & Quality Manager on $7.8 Billion The project started in 2004 and the first ore on ship is scheduled in late 2015 - In other words from inception to completion is a period of over ten years:- In that time these are just a few of the major changes that have occurred: - Change of long standing Government Global Financial Crisis Introduction of a Carbon Tax Mineral Resource Rent Tax Australian $ passed parity with US$ Increase in adverse climatic events Shift in capital markets to the East Skills shortages ? The resources sector has continued to grow beyond expectations, achieving a value of production of $91.6 billion, recorded in December 2010. In September 2011, Western Australia had $108 billion worth of resource projects under construction or in the committed stage of development. A further $194 billion has been identified for planned in the coming year. A further $200 billion in next 5 years
5. Horizon Scanning is normally driven by one of three catalysts: Change: - Scanning for indicators of change Signalled: - Scanning for signals of developing trends Pattern: - Scanning for patterns developing from random signals Well-structured Horizon Scanning projects should be more than capable of handling both evidence based and intelligence based data. To ensure that the project can do this the following strategies need to be incorporated: Organisation Wide Group Think Project Focus Issue Focused Out of the Box CHALLENGES Information Overload Establishing Credible Sources Information Sharing Time
6. To ensure that horizon scan maintains a structured approach they are often organised around a framework. Historically the, PEST (Political, Economic, Social, Technological) framework was commonly used in risk management. Changes in the business environment brought on by increased regulation and litigation has seen this framework extended to include Legal and Regulatory. Finally the rise in businesses concern over the environmental matters has lead to this domain being included in the framework that is now known as PESTLE.
7. Organisations change quickly, as do their risk profiles. For this reason, organisations must constantly review their risk profile and be constantly scanning the horizon for new or emerging risks. Risk profiles and mitigation programmes must contemplate the future. Risk management is not something to be based completely on historical experience. Past experience is no guarantee of future results as many on Wall Street will now admit. Horizon 1 - Now Trends and issues affecting business today. Horizon 2 - Next Trends and issues that are expected to affect the business in the 3-5 year window. Horizon 3 - New Trends and issues that will affect the business 5 years from now. Risk and Opportunities Growth In Renewable Energy Development Opportunities in Carbon Trading Increase In Extreme Weather Events (Cyclones, Floods) Increase Capital Investment In Research
8. The need for organisations to undertake horizon scanning is becoming clearer as the impacts of disruptive events multiply, events of the last decade have revealed that those ¡°possibilities¡± often pushed aside as ¡°not relevant¡± are beginning to occur more frequently. The ¡°black swans¡± are now appearing more often and outside of their accepted habitat. Horizon scanning is fast establishing itself as an essential strategic planning tool and executives need to become more familiar with the concept and equip themselves to be in a position to utilise the benefits that are brought by maintaining a horizon scanning capacity in their organisations. So in order to keep the Black Swans in their natural habitat in Western Australia, strategists need to start looking beyond the here and the now and begin to look into the future.