An Alternative Role For Organisational Risk Management To Reduce The Risk Of Terrorism:

In this blog, I aim to consider the potential impact that the recent terrorist onslaught experienced most notably in France and to a lesser extent in Germany could have on the risk management profile of our organisations.  I will then explore one of the underlying issues and suggest ways to enable our organisations to respond to the challenges that this recent terrorist activity brings.

In writing this blog, I do not wish to  detract from the physical and emotional suffering of both the victims and witnesses of the various atrocious attacks but I do feel it is important to learn what we can from these attacks whilst continuing to live our lives as routinely as possible.

The despicable attacks in Paris at the offices of ‘Charlie Hebdo’ in January 2015 and at the ‘Stade De France’ and ‘Bataclan Theatre’ in November 2015 involving organised terrorists with automatic weapons rightly governed the headlines for weeks but these were the type of incidents that authorities expected as they took the same form as the ‘Mumbai’ attacks of November 2008.  There were however 2 incidents that were reported far less; these were shortly before the ‘Charlie Hebdo’ attacks and took place in Nantes and Dijon in December 2014.

In Dijon a driver ploughed his vehicle into pedestrians waiting at a bus stop, injuring 13 people.  This was followed in Nantes by a man driving a van into shoppers at a Christmas market leaving 10 people injured.  In both incidents the perpetrators were heard to be shouting "Allahu Akbar" (God is Great).  In the investigations after both incidents investigators found that the perpetrators were ‘unbalanced’ or suffered from ‘psychiatric problems’.

Understanding a key difference in these attacks:

The first significant point from the attacks in Nantes and Dijon were that it introduced a new method of operation to the terrorist model,  Previously terrorists needed the funding and connections to obtain firearms to commit murder on a large scale or they needed the knowledge of which ingredients to obtain from shops and a sufficient understanding of chemistry in order to manufacture their own bombs.  All of which in business speak increase the ‘barrier of entry’ for terrorists in a way that separates the aggrieved from the fully committed.

The use of vehicles in Nantes and Dijon reduced the ‘barrier of entry’ to the level of anyone that can drive and own or hire a vehicle.  The significance of this wasn’t fully recognized by the authorities at the time but I would suggest subsequently lead to the horrendous attack in Nice on Bastille Day 2016 when the attacker hired an 18-tonne lorry to embark on his reign of carnage killing 84 people and leaving 308 people injured.

I recognize that there is significant difference between the Paris attacks and the attacks in Nantes, Dijon and Nice; specifically that the former was organised by a networks of highly organised and committed individuals whereas the later were instigated by either one person or a much smaller network of individuals.  We have police and security services focusing huge resources on identifying, tracking, and disrupting both the large organised networks and the smaller networks but finding these smaller networks is far more challenging.

Why is this is important to our organisations?

Wherever we are based our organizations are and want to be part of the community and to this end I don’t believe we would want any preventable suffering within those communities.  We also have a wider duty of care to all of our stakeholders to ensure that any of our activities are performed with a due consideration for the safety of others.

Its not just important to perform this duty of care because it is the right thing to do, it is also important to do it in order to maintain a good reputation with our stakeholders.

The business that hired the lorry to the Nice attacker would not want their vehicle used for such purposes but following the incident they were faced with the media filming the outside of their premises and seeking interviews with employees.  That organization acted in the best of faith but is now faced with a tarnished reputation associated with the terrorist incident.  They can demonstrate that they had controls in place and cooperate with the authorities but despite this there is a real possibility that their customers could decide that they do not wish to be associated with a company that is linked with so many deaths and as a result the very existence of that business could be in doubt.

In addition to the reputational damage, this incident places that organisation under the scrutiny of authorities.  This could lead to a review of all aspects of the organisations compliance with laws and regulations from employment practices to vehicle safety.  Any potential breach could lead to legal action with the potential for fines, disqualifications or suspension of operating licenses.  Such action allied with the customer perception just increases the risk that the organisation will be unable to stay in business.

Finally that organization may need to consider re-branding, a possible business relocation and other additional costs which even if successful would have an impact on the overall profitability of the organisation.

What can our organisations do to respond to this?

When considering how our organizations can respond we need consider the issues relating directly to the activities of our organisation and the potential impact of our organization on the external environment separately.

Sale of Products - that could be used for terrorist purposes:

Having worked for an organisation that sold a product which if used in a different way to that intended formed one of the ingredients needed to make a bomb; I understand both the need and the processes to adequately control this.  For other organisations that might sell or use a similar product here are a few controls that I suggest are considered to manage the risk of inappropriate use of that product:

1)   Ensure processes are in place to accurately calculate and control the quantity of that product held in stock by the business.  This will need to cover all points of the supply chain from:

a. Ensuring that there are effective physical security controls of the goods in the form of segregation, locks, alarms, and security guards.

b. Having appropriate validation processes over the recruitment and induction of both permanent and interim employees that have access to these goods or have responsibility for the accurate custodianship of the product.

c. Having a control that the initial receipt of goods is matched to expected delivery quantities

d. Recording the actual and perpetual inventory held in warehouses, in-transit and in any shops

e. keeping accurate records of the quantity of that product sold and any returned by the customer or returned to the vendor or stolen/damaged.

f. Ensuring that appropriate operating instructions exist for the product; that include how it should be used and the risks that can result from its incorrect use.

g. Implementing processes that validate that all personnel using the product are adequately trained and that customers using the product are appropriately certified or have the required knowledge to use the product safely.

h. Creating controls that trigger an alert if excessive quantities (greater than needed for routine business) are sold or found to be missing.

Having recorded this information it is essential that there are adequate resources to analyse the data, create trends and identify any potential anomalies or triggers that have been flagged.  An anomaly would result from an attempt by a customer to purchase a greater quantity than defined as necessary for routine business, the identification of a stock loss or a break-in resulting in theft of a large quantity of the product.

2)   Engage in an open and honest conversation with anti-terrorism authorities and voluntarily disclose the processes that your organisation has to control inappropriate use (examples suggested in point 1 above).

3)   Report any loss of the product as identified in the monitoring mentioned in point 1 above.

Use of Vehicles: - that could harm people

There are 2 considerations relating to vehicles; the use of vehicles within the organisation and controls over the vehicles sold or hired from the organisation.

1) Vehicles used within the organisation:

These considerations relate to the risk that a vehicle used by a company employee could be used in an incident that causes injury or death to other parties:

a)    Ensure that the organisation has clear policies that define the criteria that should exist for a member of the organisation to use a vehicle and that individuals are validated against this criteria prior to being allowed to use any such vehicles.

b)   Any in built controls that restrict the vehicle been driven above a certain speed or alarms that alert if the vehicle is reversing should be regularly checked to ensure they are working and reported to maintenance for repair in the event that they are not working.

c)    Although it is fairly obvious just as organizations have policies for road safety governing the use of mobile phones or the amount of driving time allowed without a break; there should be policies that clearly define the lawful use of company vehicles.

d)   A monitoring process should exist that verifies regularly that drivers are still qualified, authorised, licensed and insured to drive vehicles.

2) Vehicles sold or hired from the organization:

a) If your organisation hires or sells vehicles to customers then their needs to be adequate standards defined and controls in place to validate the accuracy of the customers identity and authorisation to use the vehicle.  This could include checks made to driving licenses, address details, and payment information, especially anti-money laundering checks where cash transactions are involved.

b) Personnel should be trained sufficiently to identify any peculiarities or inconsistencies that a customer may have which could suggest that there are concerns over the motives for using vehicles or potential mental health issues.  In such circumstances an acceleration process to formally raise these issues with more senior personnel within the organization and potentially to external authorities needs to exist.

c) Any vehicles returned from hire need to be checked to identify any potential damage and where there are suspicions that this could have resulted in injury or death or others a timely process for investigation or acceleration should exist.

d) If vehicles are sold or returned to a leasing company after they have been used by the organisation, a process should exist to ensure that any company branding is removed from the vehicle so that any future use cannot be associated with the organisation.

The suggestions above I believe are practical ways that an organisation can mitigate one of the potential ways that a terrorist cell could access vehicles in order to commit a Nice style attack and may also help an organisation manage its reputation more effectively in such matters.

In my next blog I shall consider the potential impact of some of our organizations activities on the external environment and how these could relate to the organisations risk management in relation to the terrorism risk.

Building On Strategy To Extract Greater Value From Charity Shops

This blog is the 2nd of 2 blogs that gives some suggestions about how charities with shops can be more effective in engaging with the community, and create more income for their causes. 

In the first blog I explained this 4-phase model and followed through stage-1 of how to identify the resources and capabilities that are valuable and then gave some examples of this that specifically related to charity sector shops. 

In this blog I’ll show the 4-stage methodology again and complete the example relating to charity sector shops by explaining phases 2-4 of the process that I have used in business but which I have not seen applied in the charitable sector before. 

I hope that it can create some thought to executives and trustees in charities and especially in those smaller charities that just have a few shops.  I’d be interested to hear your opinion, answer any questions or to provide help for your charity.

4-Stage Methodology:

Each charity will have its own strategy, though in my opinion a successful sustainable strategy should consider 4 specific areas:

1-    Are the resources or capabilities of the charity Valuable?

2-    Are these resources at all Rare?

3-    Can these be easily Imitated?

4-    How can the Organisation be set up to exploit/optimise them?

2-    Are these resources at all Rare and 3- can these resources be easily imitated?

I hope I have prompted you to recognise that from the strategic perspective there is a lot of value within our charity shops but the rarer that this value is seen to be, then the more desirable it will be to our customers and the easier it is for us to raise the money we need for our causes.

Although as charities we can differentiate ourselves from the main body of the high street through all of the examples I have given above.  What makes us rare is the difference in our operating model.  Yes, just like any other retail shop we are looking to be profitable but from then onwards things are very different.  It is the causes that we help and the positive change that can be made to society that define our mission and our very reason for existence. 

Other retailers may have a fundraising box or may donate a portion of their income to charity but that is just a tertiary activity that falls within their Corporate Social Responsibility (CSR) functions rather than a purpose or passion and as such cannot imitate any organization within the charitable sector where fundraising and donations run through the very heart of the organisation.

Another key value that is rare and cannot be imitated by mainstream retailers are the benefits mentioned in the previous blog relating to our cost base.

The bigger challenge though firstly is how rare is our offering when consumers are faced with comparing this to each of a number of charity shops on the high street often trading next door to one another? Then secondly just how easily can this be imitated?  If the offering cannot be differentiated between one charity’s shop and another then it is no longer rare and has probably already been imitated. 

The key here is to recognize and accept that the locations, products, employees, supporters and value to the community are similar for most charities that have a high street retail offering.  Some larger charities will have economies of scale in size that could enable processes to be more efficient or purchasing of overheads costs to be cheaper, whilst other smaller charities can be more responsive and proactive.  As a result effectively all of these factors can be imitated by other charities.

It is in the value of the ‘special’ and ‘unique’ stories that each charity can tell where although imitation may be achieved there can be differentiation of the type of stories can carry unique value.  Simply the story of ‘how a dog was saved from cruelty’ or ‘a child was saved from hunger’ are both compelling but they are more compelling to different people depending upon which subject individuals feel is more relevant to them and their values.

We shouldn’t try to compete with the great stories from other charities in terms of challenging the validity of those stories; instead we should make the stories from our charity as interesting and compelling as possible.

4- How can the Organisation be set up to exploit/optimise this value?

a) We need to capture the interest of those passing our shops or waiting for buses or taxis outside of our shops and convert them to customers.  To do this we need to create messages in our shop windows or mobile displays that build curiosity and create a reason for people to enter into our stores and learn more.

b) With such compelling stories we should seek to change the shopping experience from being a passive selection process to become an active journey of experiential discovery that links the purchase of a product to the value that the purchase has on the individual or the cause that benefits from our work.

This can be achieved through using the window and wall space in our shops to display photographs, short bios, illustrations, animations and text that shows exactly what we do and when possible with the addition of audio visual media; tell the story from the voice of the people whose lives are changed.

For example taking £1 of income from this shop and showing how when it is added to other £1’s of income it purchases a book which when used by a child in an African village and with a teaching volunteer enables the child to learn to read.  Then give an example of how this skill has enabled an older child to become a doctor or an entrepreneur who can support their family out of poverty.

We can show where the journey started, and finished or where we would like it to finish, which shows the positive, value that we bring.  In this way we can engage with customers in a more intimate way and help them see the real value of what we can enable them to do.

We should consider bringing some of these stories to life by having special engagement days in the shops that show the results of what we do.  This could for example involve one of the rescued animals visiting the shop, an aid worker showing the products they use and telling the stories of what they saw and achieved when on assignment, the relative of someone that had excellent care in a hospice or a member of staff who can explain the value or change that the charity has been able to make.

c) Let’s not forgot the value of the passion of our workers and shop volunteers, we can capture just what drives them and in doing so can bring a local perspective to the message boards on the walls and windows in our shops further embedding our achievements.

d) One of the challenges that many charity shops face is that the demographic of shoppers is focused more in the 30 something and older age groups.  We are missing engaging with younger people, particularly the 20 something age group who can be some of our best ‘message spreaders or vocal advocates’.  We can start to engage with this group when they are children by using our storyboards and linking them to quizzes that enable them to learn more about what we do, and the importance of the values that we have on wider society.

To engage more effectively with the 20 something we need to consider using social media more effectively and be brave enough to within set parameters enable staff or volunteers in our shops to use social media to engage with the local community.  We also need to revisit our store layout and get younger volunteers to mix and match clothing and accessories to create more edgy and fashionable clothing combinations that can show the potential uniqueness that can come from shopping in our charity shops.

e) We can be the link from the national story told on the central website to the local one in our shop by showing just what each community where we have a shop has done to help make the difference eg having a poster that shows ‘the money raised through this shop has enabled one village in Africa to have safe drinking water’ etc.

We shouldn’t be afraid to show how much we are embedded in the local community as an employer and the value this brings to the local economy, or our role in bringing the community together through the work of our volunteers.  In this way our customers can see that they are making a difference to both our causes and to the community where they live.

f) Let’s try improving engagement with our customers and understand why they buy from us, and the kind of products they want.  We can send text messages when the right product arrives and bring them into the shop where there is the opportunity for them to buy other products.

g) Products donated are often quite unique and quirky which gives us the opportunity to market them in our windows or social media as ‘stay buys’ or the most unusual ‘product of the month’ and crate some buzz and conversation around them.

h) Blogging is becoming something that more people do regularly and with it they build large local and national networks.  We should have the confidence to engage with bloggers who can tell our story or promote our quirky or unusual products of the month and thereby engage with and share their network.

I believe that by re-assessing what we do in our retail stores, we can through improved engagement with all our stakeholders deliver even more value to our causes and to wider society.  This may be by improving the things we already do, or by starting new initiatives.

In future blogs I will be considering where strategy fails in its implementation and what can be done to avoid this.

Russell Shackleton

Managing Director of Shackleton Consulting & Development.  Shackleton Consulting & Development provides consulting to charities and businesses on strategy, risk and change management, governance, process improvement and people development.

A Strategy creating something special that extracts the untapped value from Charity shops

For years I’ve supported many charities with donations and more recently shared my knowledge in the areas of strategy, change and risk management, governance and internal control.  There are few organisations that are more effective at changing peoples’ lives and changing society and I have a passion to help them become as effective as possible.

This blog is the 1st of 2 blogs that gives some suggestions about how charities with shops can be more effective in engaging with the community, and create more income for their causes.  I’ll give an example of a 4-stage process that I have used in business but which I have not seen applied in the charitable sector before.  I hope that it can create some thought to executives and trustees in charities and especially in those smaller charities that just have a few shops.  I’d be interested to hear your opinion, answer any questions or to provide help for your charity.

Strategically charities much like any other organisation need to have a means of differentiating themselves from one another and from other retail offerings on the high street.  Ultimately they need to be able to take this differentiation and communicate it to their supporters and customers in order to capture the uniqueness of their brand.  This then creates a compelling reason to support the charity so that it can best achieve its objectives.

4-Stage Methodology:

Each charity will have its own strategy, though in my opinion a successful sustainable strategy should consider 4 specific areas:

1-    Are the resources or capabilities of the charity Valuable?

2-    Are these resources at all Rare?

3-    Can these be easily Imitated?

4-    How can the Organisation be set up to exploit/optimise them?

Once we can separate the resources and capabilities that are valuable to our stakeholders and which we are especially good at from our other resources we will know which resources to invest in to make the best return on our time and effort.

Those resources that are rare are especially important to us as by their nature they separate us from the competition whether that is mainstream retail shops or other charities.  It means that those organisations that do not have those resources will have to invest in them if they want to copy us and that takes them time and money to achieve.  We have already invested in these resources so we start ahead of the competition and should use that to be the first or the best. 

If we can then seek to identify resources that are relatively unique then that makes them very difficult to imitate and as long as we can find ways to optimise them we will have a unique value proposition to offer.

Why we need the strategy now:

In the post EU referendum world that we are now living in just how prosperous the UK will be in the medium to long term is something that only time can answer with certainty.   What is clear to me is that with the absence of a detailed government plan comes a great deal of uncertainty regarding the specific structure of our international relations and how that impacts upon prosperity within the UK.  If this continues it is likely to result in a slow down or potential economic recession.

Whilst a recession is not good for the economy it is likely to make the need for charities that can help those in economic or social need even more essential.  Although there may be a greater call on charities to help there is also clearly an opportunity for those charities that have a high street retail presence to grow their revenue.  Indeed the results of the annual ‘Charity Shop’ survey by ‘Charity Finance Magazine’ identify an underlying trend that in times of recession the sector usually experiences rapid growth.

The recent demise of BHS and the closure of its stores as it sells through its merchandise are also likely to leave another large hole on our high streets that will make the diverse range and brands of charity shops even more prominent.

The advent of online fundraising websites and online shops has given many charities an efficient and simple mechanism for registering members, obtaining and processing financial donations or selling merchandise, and although this simplifies gift aid collection it doesn’t provide the opportunity for face to face customer engagement; charities are yet to concede that online merchandising makes fundraising through charity shops redundant.

Faced with this situation just how can charities best meet this challenge and differentiate themselves from one another on the High Street?

As an experienced retail professional I’ve walked along a number of high streets and visited many charity shops and I believe that the quantity and variety of charity shops make it increasingly difficult for customers to differentiate the offering of one shop from another.  Clearly some may be slightly better than others but sadly many look more like bland disorganized school fetes than organized retail shops.  I’m not wishing to criticize the fantastic efforts of the volunteers and shop workers as I think they do a great job, I just have some frustration that weaknesses in strategy or a lack of imaginative merchandising impede them in making their charities even more successful. 

There is a huge opportunity for charities to create their own unique presence from the other shops on the high street because unlike other shops they have real and compelling stories to tell!

1-      Which resources do we these charities have that are valuable?

VALUE IN OUR LOCATIONS:

a) Although - I don’t believe that we fully recognise the value of our resources and capabilities for example the location of our shops may not be in most prime retail shopping centres. Despite this there location on the tertiary shopping areas of the high street are usually on those streets that shoppers and workers pass in order to reach the prime shopping areas or are near bus stops that bring them into our towns and cities. 

VALUE IN COMPELLING STORIES:

b) We have many compelling stories to tell; whether that is ‘How we improve the lives of those in poverty’, ‘How we protect animals from cruelty’, ‘How we bring compassion and dignity to people with terminal illness’, or ‘How our research is finding cures to diseases’ and many other amazing stories.

VALUE TO THE COMMUNITY:

c) We are a central part of community cohesion, as an employer, as part of the local economy and a place where volunteers can meet and share ideas that can make a lasting difference to society.  We are a location of choice for people to donate goods and/or purchase them.

VALUE IN OUR EMPLOYEES / SUPPORTERS

d) Our supporters that volunteer in our shops and sorting warehouses are unique within the retail industry.  They volunteer because they believe in our mission and get personal satisfaction from being associated with it.  Money is not the reason why they choose to work with us; the reason is much deeper and separates up from other shops on the high street.

Equally I would suggest that our employees work with us because of the type of organisation that we are rather than because our pay or advancement prospects are the best on the high street.  This engagement is also of real value as well.

VALUE IN OUR PRODUCTS:

e) One of the most unique aspects of operating a charity shop is that we don’t have a traditional supplier list or a catalogue of products we can order from them, as a result we do not know which products we will be selling from one week to the next.  This means that the only way that our customers can discover what we are selling is to visit our stores each week.  A reason for regular visits to our shops has its own intrinsic value.

VALUE IN OUR COST BASE:

f) It would be wrong not to recognize that we also have value in the lower cost base that comes from volunteers working in our shops, products been donated, and the reductions, exemptions or rebates in local and national taxation that we are eligible for.

Having identified some of the valuable resources and capabilities that I believe exist in the high street retail presence of charities, in my next blog I will give examples of which ones are rare and hard to imitate. Finally I will seek to complete the strategy by explaining how these capabilities can be optimised so that charities can respond to the opportunities that lay ahead.

Russell Shackleton

Managing Director of Shackleton Consulting & Development, he provides consulting to charities and businesses on strategy, risk and change management, governance, process improvement and people development.