The dilemma at the heart of risk management

Yesterday on Radio 4 one of the interviewers (sorry, can't remember which of the men) said something that summed up perfectly the dilemma at the heart of risk management.

The discussion was about the recent flooding in parts of the UK and was discussing actions that could be taken to contain flood waters if they got as bad again.

The comment went something like "…but you could spend all that money on the actions, but if there's no repeat of flooding in the short term then it will have been a complete waste of money"  !!!!!!!!!!!!!!! (exclamation marks my own)

Well - yes - that's the point.  Managing risk means committing resources (people, time, money) NOW in case the situation that is risky (i.e. it only MAY happen) happens again.  

Just like buying insurance - if you don't claim, have you wasted your money?  Or did you buy peace of mind that you were covered if you needed it.

It seems so obvious - but it's so counter-intuitive when resources are short to invest in something you may never need rather than something you know you want now.

The answer is of course doing brilliant risk analysis - so you know the things that it would make absolute sense to invest in now - so you never have 'buyer's remorse'