Preparing for Risk in Bangkok

Bangkok--With cancellation of the EARCOS meetings due to flooding in Bangkok, I found myself with two unexpected days awaiting the first available Thai Airways flight home.  The experience wandering the city was simultaneously surreal and unsettling, and reminded me of the 1993 floods in St. Louis where I live.  I remember going to a Cardinals baseball game that August with my father and 4-year-old son, while just two blocks away people were furiously sandbagging and pumping away Mississippi River water well outside its banks.  Yesterday, shopkeepers along Thanon Charoen Krung Road were sandbagging and building concrete block barriers as the Chao Praya River leaves its banks with each high tide. And all the while the few tourists remaining in Bangkok pick their way around the bags and blocks.

The barriers in front of two stores, just meters from each other, appear above.  One is a rather low set of sandbags while the other is a higher concrete and block structure.  Some barriers were higher and some lower, with more than a few shopkeepers doing nothing at all to prepare.  What this calls to mind is the fact that we all make business decisions that incorporate risk estimations all the time.  Some of us are biased toward over-estimation of risks, while others ignore even the most obvious signals.

What we can't escape is that placing bets is an inherent part of strategy.  Even to seemingly not bet--to not build any sort of barrier against the Chao Praya--is itself placing a bet.  The conversation about varying appetites for risk is one that governing boards should have as part of the strategy-making process.  Otherwise, we end up arguing over the height of water in the future (something we can't know for sure today), rather than discussing the real issue of our relative comfort levels.