Long story short an electrical malfunction caused my neighbor’s house to catch fire over the weekend. Fortunately nobody was hurt but things certainly could have turned out much worse for a few scary simple reasons. According to the NFPA the likelihood of a home fire is 1 in 4 in your lifetime and the likelihood of injury is 1 in 10. Here’s the kicker: Those statistics are for a single fire. My neighbor’s house caught fire not once, but twice in 24 hours! As I replayed things in light of seemingly much longer odds some interesting operational risk correlations came to mind.
It all began midday on Saturday right after lunch as our 2 year old went down for a nap. Those of you with children appreciate the intense desire to covet and protect naptimes at all cost. This meant the house was more quiet than usual which was likely the only reason I happened to overhear the yelling outside. I discovered this was my neighbor across the street barking orders to his family and his son’s Boy Scout troop (coincidently working on their Eagle Scout project on the driveway) to seek safety as thick black smoke rolled out their front door. I scrambled for a fire extinguisher and raced across to help only to have it fail after a tiny, embarrassing “pffffffft”. Not that it would have made a big difference anyway; the fire was quickly growing beyond control. But still, neither my finest moment nor the time for a key control failure.
Other family members soon assembled having escaped out the back of the house in a nick of time. With all accounted for we retreated to the curb to await the cavalry. Acrid smoke filled the whole street so I dashed back home to close the garage and somehow had the presence of mind to also turn off the furnace before it inhaled smoke throughout the house. I returned to find my neighbor, soot faced and coughing, remarking how the fire was so hot and smoky and spread so fast he figured if it had happened while they were asleep they wouldn’t have survived. Emergency services arrived on the scene and extinguished the fire just before it spread to the roof and beyond. It seemed the worst was over.
Fast forward to the same time the next day as I arrived home to find a different neighbor kid waving for help and shouting the fire had restarted. Really? Again during naptime? Nothing was visible, but he was acting frantic so I went for a closer look and sure enough saw fire quickly spreading up the stairway inside. Yet from the outside there was no smoke or other indication. So how had he known? The answer is keen observation and lucky timing. From his vantage point at home he just happened to notice a trace of flame through the lone 6-inch pane of glass that somehow hadn’t been completely blacked over with soot the day before. He was home alone and ran outside where he found me pulling into my driveway. I dialed 911 to get things moving and 10 minutes later our street was again lined with fire trucks and other EMS personnel.
Turns out there must have been a latent ember or enough residual heat to reignite everything. It was already very dry and had been windy since the night before. Several smashed windows also remained open around the house which all conspired to create a strong draft condition inside, essentially converting the entire house into a big fireplace with the stairway acting as the chimney flue. What if things had kicked up overnight instead and spread to the roof unabated? Between the wind and several huge pine trees in our yards things could have been really wild. Yikes!
From an operational risk standpoint it’s interesting to note the random dynamics that occurred to create a system of circumstantial risk events. What lessons can we apply to broader organizational risk management practices across the enterprise?
- Preparedness – How enabled is the organization to respond when risk alarms (metrics) sound?
- Escalation – Everybody has the potential to save the day by simply noticing something out of place and calling attention. What’s the organizational sounding board? Who’s listening?
- Context – Unfortunately, too often the significance of isolated observations wasn’t made clear in time to prevent (or minimize) the impact of a disaster (for example the unused school busses during Hurricane Katrina). How can we coax real time, meaningful context out of seemingly unrelated items to extend the view over the horizon and adjust to changing conditions?
- Feedback and refinement – There’s an old saying that it’s better to learn your fire extinguisher is worthless when your neighbor’s house is on fire (my neighbor disagrees). As I go to replace my fire extinguisher should I buy the same kind or consider learning a lesson and implementing a more effective control (continuous improvement)? Does the current risk model contemplate everything it should? (Tip: Start by defining higher order risks and then fill in gaps with more specific risk definitions as needed over time.)
- External party risk – The smoke from my neighbor’s house posed downstream risk to neighboring houses like mine. I responded by turning off the furnace and closing up our house and also packed up a few essentials in preparation to leave if necessary (escalated incident response). When a vendor or supplier experiences a security event or business interruption the resulting increased uncertainty and risk can ripple throughout the supply chain. An organization’s ability to detect and compensate for these often unpredictable fluctuations is crucial to minimizing the impact.
- 4th line of Defense – The items above notwithstanding, a balance must always be struck between too much and not enough. This is true in all areas of the business not just security or risk management. The concept of the black swan is all about asymmetric risk either from unforeseen events or predictable events whose impact magnitudes exceed predicted thresholds or outcomes. Even the most mature risk programs can’t prevent impacts when all **** breaks loose. What’s the plan for business resilience? How do you stay viable in the short term and improve in the long term? The fire department investigators are certainly hunting for lessons to learn and I can promise you my neighbor’s already planned to get escape ladders for the upstairs bedrooms among other things.
In case you’re wondering, despite all the noise and excitement our daughter slept through both events like…well…like a baby. If the Boy Scouts’ motto is “Be prepared,” then maybe the weary parents’ motto could be “Don’t mess with naptime!”
For more on Operational Risk Management, please visit my colleagues’ blogs here, here, and here and see Gartner's latest report.
Thanks for reading. Please feel free to email me with questions or comments anytime!
Mason
