RISK MANAGEMENT: A CORE MILITARY SKILL – AN ESSENTIAL CORPORATE REQUIREMENT
Colonel Arun HariharanVice President, National Head – Nodal,Security and EHS, Bharti Airtel Ltd What is Risk Management? The term Risk Management is loosely used both in the military as well as the corporate environs. It is nothing but something we do in our day to day lives, all the time – whether it is a decision to buy a new car, changing jobs or even a simple thing such as crossing the road. To put it across simply, Risk Management is the process of identifying, assessing, and controlling potential risks that could negatively impact an organization or project. These risks could arise from a wide range of sources, including financial uncertainties, legal liabilities, strategic management errors, accidents, natural disasters, cybersecurity threats, or operational failures. Effective risk management helps organizations minimize losses, protect assets, ensure compliance with regulations, maintain operational continuity, and enhance decision-making. In a rapidly changing and uncertain world, proactive risk management is vital for achieving long-term success. Let us now examine how this works in the military and in the corporate – the differences and the overlaps. Risk Management in the Military Risk management in the military is a systematic process used to identify, assess, and control risks associated with military operations, training, and other activities. Its primary goal is to preserve combat power, conserve resources, and increase operational effectiveness while minimizing unnecessary loss or damage. Military risk management typically follows a structured approach such as the U.S. Army’s 5-step model: 1. Identify hazards: Recognizing potential dangers in various military activities. 2. Assess hazards: Evaluating the likelihood and severity of identified hazards. 3. Develop controls and make risk decisions: Developing and implementing measures to reduce or eliminate risks, by using risk information to inform operational planning and execution. 4. Implement controls: Implementing strategies to minimize the risks. This could involve reducing the probability of the risk happening or lessening its impact if it does occur.5. Supervise and evaluate: Continuously tracking risks, reviewing the effectiveness of risk mitigation efforts, and adjusting strategies as needed. This process helps military leaders balance mission requirements with personnel and equipment safety, ensuring that risks are taken only when the potential benefits outweigh the possible losses. Risk Management in a Corporate Scenario vs the Military Risk management in the corporate world shares some similarities with military risk management, but there are notable differences in focus, scope and implementation. This stems from the basic purposes of both these organisations. Whereas, in the armed forces focus is on effective training, seamless logistics and winning wars, in a business enterprise it is about staying competitive in the market, generating profits, regulatory compliances, organisational reputation etc. Hence, though at a high level the process remains same there are nuanced differences. In simple terms, here’s how corporate risk management differs in the two fields: Parameter Corporate Military 1 Focus Primarily focused on financial risks, reputation, and business continuity. Centred on operational effectiveness andpreserving combat power. 2 Types of risks Market risks, credit risks, operational risks, legal/ compliance risks, strategic risks. Combat-related risks, equipment failures,personnel safety, mission failure. 3 Regulatory environment Governed by various laws and regulations (e.g., Unified Licence for telecom operators, RBI regulationsfor banks). Follows military doctrine and governmentregulations. 4 Stakeholders Shareholders, customers, employees, regulators. Government, soldiers, allies, civilians inoperational areas. 5 Risk appetite Often defined by board of directors, balancingrisk and reward for profit. Determined by mission objectives andstrategic importance. 6 Time horizon Can range from short-term to long-term, often with a focus on quarterly or annual results. Mission-specific, can be immediate (tactical)or long-term (strategic). 7 Tools and methodologies ERM framework, ISO 31000, financial modelling, scenario analysis. Specific military risk assessment tools,after-action reviews. 8 Reporting Regular risk reports to management, board, and sometimes public disclosures. Often classified, reported through chain of command. 9 Risk transfer Can use insurance, derivatives, or other financial instruments to transfer risk. Limited options for risk transfer; risks areusually managed internally. 10 Cultural aspects Risk culture varies widely between organizationsand industries. Strong emphasis on safety and operational security across the organization. 11 Consequences offailure Financial losses, reputational damage, legal liabilities. Potential loss of life, mission failure, national security implications. 12 Innovation andrisk-taking Often encourages calculated risk-taking for competitiveadvantage. Emphasizes following established protocols, with innovation focused on enhancing capabilities and safety. While both sectors endeavour to manage risks effectively, the corporate world generally has more flexibility in its approach and can often take on more risks in pursuit of profits. The military, given its critical role in national security and catastrophic nature of failure, tends to be more conservative in its risk management practices. Transitioning Military Personnel and Risk Management as a Career Transitioning military personnel often possess skills such as leadership, decision-making under pressure, operational planning, and risk assessment – qualities that naturally align well with various subdomains of risk management. Hence risk management is a good career option for veterans seeking jobs in the business sector. The term Risk Management is loosely used both in the military as well as the corporate environs. It is nothing but something we do in our day to day lives, all the time – whether it is a decision to buy a new car, changing jobs or even a simple thing such as crossing the road Based on exposure to the sector, here are some recommended subdomains and related industries that could be a good fit: Operational Risk Management ● Fit: Veterans excel in understanding and mitigating risks tied to processes and operations. ● Industries: – Manufacturing. – Logistics and Supply Chain. – Aviation and Aerospace. – Healthcare (hospitals, emergency services). Security Risk Management ● Fit: Military backgrounds provide excellent training in physical security, threat assessment, and protection. ● Industries: – Corporate Security– Critical Infrastructure(telecom, energy, water, utilities).– Event Management.– Financial Institutions(fraud, cybercrime prevention). Cybersecurity Risk Management ● Fit: Many veterans come from IT, communications, or intelligence backgrounds and can transition well into cybersecurity roles. ● Industries: – Technology and Software Development. – Telecommunications . – Financial Services. – Healthcare (patient data protection). Compliance and…
