All right, welcome back to the show. I am Dr. D, your host. Today, we are going to talk about fractional chief risk officer, how that can help small and medium businesses, how we got there, what we offer, and how you can navigate this incredibly chaotic and difficult world as an entrepreneur without shelling out massive amounts of money for a consultant, but still stay a step ahead of your competitors.
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All right, thank you very much and welcome back. My name is Dr. Jeff Donaldson. I am an army veteran, a professor of disaster and emergency management and the founder and CEO of Preparedness Labs Incorporated, a Canadian research and education firm in the field of risk, resilience, and preparedness.
I have dedicated well over a decade to studying small and medium family-owned mom and pa style shops, their emergency preparedness, their preparedness for business and their ability to be ready to navigate the disruptions of the world. I've looked at it from a perspective of owning a business as well. I'm into year number six of owning Preparedness Labs Incorporated. And so what I offer you here today and what we're talking about on this episode is from evidence.
It's from experience that I've had over six years of running a business and it's experience that I've had and the evidence that exists within the literature and within the broader body of knowledge when it comes to risk management, business continuity, and a number of related functions that we're going to talk about today. But let's be clear, we exist in a chaotic and uncertain world. Political, economic, and cultural upheaval is happening at places all across the globe and it's affecting our ability to do business. Now, according to the Small Business Administration in the United States of America, 91% of small businesses will have a disruption of some type every quarter.
So as a business owner, that means you will have a disruption. It's not an if, it is a matter of when and likely multiple of them throughout the year. Now, these disruptions can happen in a number of ways. They can be small all the way up to catastrophic.
But understanding and accepting that we live in an uncertain time, that our ability to foresee what the next political or economic decision or change may be is limited and our ability to project into the next quarter any level of certainty in our business models is in question. That's the environment we live in and we have to understand and embrace the fact that as much as we may prefer to have confidence, certainty, and absolute knowledge about what is happening in the market we serve, the realistic perspective is that we're not in control of that. That events that will continue to occur, whether they be natural disasters, economic decisions, political nightmares, or other cultural clashes that may happen at various places around the globe, they will impact our ability to function as a business. They will impact the methodologies that we use, how we create a product or service, and how we sell a product or service can be impacted by events that are beyond our control.
When we cannot change those events, we cannot alter those events, nor can we prevent them from happening. But what we can do is take real and intelligent steps to insulate our business. Think about wrapping your business in a blanket of insulation that while to the greatest extent possible, we mitigate harm, we reduce harm, but we have to accept we cannot prevent an event from happening, and nor are we in a position to mitigate risk to zero. Risk will never be zero, and there is only one way to be certain to eliminate risk and to prevent bad days from happening, and that's to exit the market.
If you choose to remain as a business owner and you choose to engage in the market, you will have disruptions. You will, to use a Mike Tyson phrase, get punched upside the head. How you prepare for that, the things that you do in advance of getting punched, that's what will facilitate a better post-event outcome. And now when we understand that, what services are out there?
What does the world offer you and I as business owners? There's a number of areas of expertise that I want to talk about. The first one is business continuity. Business continuity is an industry.
I have good practice guidelines, professional certifications, et cetera, in support of business continuity consultants that will help you set up formal, structured processes by which you have a better control and management of what happens in your business. Enterprise risk management, which looks at the outside strategic world and how it's affecting your business from an end-to-end total business process. We have risk management in general, which can be specific. It can be tactical operation or strategic different levels.
We have supply chain risk management. I've spent a career over 20 years in the army as a supply chain analyst. I know exactly how to manage a supply chain. I've managed them around the world in chaotic and non-permissive environments.
When we talk about operations risk management, that is a broader logistics world to look at everything from the procurement end all the way down to the logistics delivery and order fulfillment. We talk about crisis management. We talk about resilience management. Resilience is one of the most abused terms that exists in the field.
There is no less than hundreds of definitions for the word resilience. If you want resilience to mean this, I am certain and can guarantee you will find peer-reviewed literature and international great reports that will support your view. But what is resilience? This is the thing that matters to a lot of people.
I teach and lecture in the field of emergency management, the idea of setting up public sector and private sector organizations to be ready to mitigate to the greatest extent possible, prepare for, and then respond and recover from significant events and disruptions. Emergency management is in the public sector, but we do the same thing in the business environment. We just call it anyone in number of these. Then we have climate change management, people that are worried and concerned about the impacts of climate change on their business operations.
And all of this is generally rolled up to some degree in larger organizations into somebody called a chief resilience or risk officer. Now, within many of these fields, they have esteemed certifications, international renowned certifications that have fairly tough academic and examination standards. They have international standards organizations, certifications as well. So ISO 22301, ISO 300001, and there's many an international governance body.
So each one of those specialties I talked about exists in the world of business. They exist to support business operations. They exist to assist all of us business owners on how to navigate the bad day, how to be ready for the bad day. And they do this from a position of knowledge, from a position of examination and international governance.
The reason that's important is these consultants exist out there. For the most part, they know exactly what they're doing. They're very well-trained and very useful to larger scale businesses who have the resources to find that. But in reality, when we think about it, are they not all serving the same thing?
Are they not all executing the same general function, albeit from a unique perspective? Because as we look at preparedness, if we look at preparedness for individual families, it's about being able to navigate a bad event and return to a sense of normalcy as quickly as possible. Your business operations are the same. The entire purpose of all of those specialties that I read it, the entire reason they exist is to assist business owners to navigate bad days, to be able to mitigate the effects.
So when a disruption happens, it has a lower effect on your business and your return to operations is much quicker. That's what investment in these business activities do. That's what investment in emergency preparedness for business does for you. Call it business continuity, risk management, supply chain resilience, climate chain management, emergency management, or any number combination of these.
They all do the same function from a different perspective to a different degree. Now, our mission at Preparedness Labs Incorporated is to demystify identifying, mitigating, embracing, and leveraging risk so that you can wrap your small and medium business in a blanket of preparedness, an insulation layer, if you will, against events in which you don't control. That is our mission here, to design systems so that you as a business owner, a small and medium business owner, somebody at a million dollars top line or less, six-figure business, five-figure business, the people who encompass 95% of small businesses in the United States of America. 95%, which is 21.5 million businesses, have a top line that is less than $1 million.
95%, okay? So 21.5 million businesses out there operate as a six-figure or a five-figure business. It is difficult for them to justify significant extra expense for full-time chief resilience officers or chief risk officers, or to hire multiple consultants to fill out multiple processes within their business. We want to amplify the upside and mitigate against the downside.
So when crisis occurs, as business owners, you and I know that two things occur in disruption. One is there's a downside push. There's a potential impact on your ability to earn revenue. Your ability to throughput and operate a clean logistics process.
You may have supplier problems. You may have cyber problems. There is a specific and real downside. But on the other side, every time there's a disruption, there's significant opportunity in the chaos.
Because when the disruption occurs, it often opens up new market share, new markets, and new chances for you to seize business. Wrapping your business in a layer of risk protection allows you to leverage and leap into the chaos to seize those opportunities that become available when chaos happens. Now, you got to ask yourself right now at this point, as we're having this discussion, are you ready to navigate a punch upside the head? And if that punch upside the head knocks your business down slightly, but opens the door to opportunity, are you positioned right now to leap in there and grab an extra market share?
Because others around you are. And so that makes it very challenging for a lot of people to do. Because in reality, you have three choices when a disruption happens. You can hold fast, which means you're just trying to keep everything going, get back to normal operations as fast as you can.
The second option you have is to go to a safe harbor, which means revert, close down, shut down some of your operations, put a protective crust around it, and wait through the difficulty, wait through the disruption, wait for the event to pass, and then restore it to normal operations. And your third option is to leap in unapologetically, confidently, into the chaos, and expand your market share. Those are your three options. So with those three options, knowing those are the things you can do, we have to first talk about what is risk.
Why does risk management matter to you as a small business owner? Now think about the difficulty with all of those specialties that I met before, is they have their own nomenclature. They have RTOs, MTPOs, all these different phrases and nomenclatures that they use within their operations, a new set of language that you have to use, a new set of ideas that you have to adopt, a number of processes that you've never heard of that now have to be brought into your business culture and your business operation. It's often a very disruptive event on its own to attempt to understand these new concepts, etc.
So here at Preparedness Labs Incorporated, what we developed is the realistic use of risk means we talk about risk in language that you already use. You operate in four spheres. This is the 21st century. None of us can operate a business without being online.
You have cyber life. You have a cyber risk that exists because you simply use the internet. You have operations risk. Operations mean you create or buy some good or service that you sell to somebody for money and then you maintain customer relations.
That's your logistics. You create something and you sell it to somebody for money. That whole process, how you deliver it, whether it's creating and delivering a digital product or creating and delivering a physical product, that's operations. You do it now.
We don't talk a different language. Operations risk. And then strategic risk is very simply, your business exists in a broader environment. You exist in a world of political and economic decision-making that is beyond your control.
You exist in an industry. If you own a dry cleaner, you exist in the broader dry cleaning industry. What is going on in that industry? How might that affect you?
How could different regulatory frameworks and chemicals affect the future viability of your dry cleaning? That is your strategic risk. Things that could affect you that are beyond your control in the political and economic environment. And the last one is reputational.
Welcome to cancel culture, right? All it takes is some dumb action or unfortunate video from one of your employees and their Cancun vacation doing something absolutely ridiculous tied to your company that you are now up at three o'clock in the morning on Saturday trying to protect your company's reputation because something like that occurred. Cancel culture is real. You have a reputational risk.
So if we think about just your cyber, your operational, your strategic, and your reputational risk, that's it. That's all you face. Absolutely everything that could happen to you in your business is going to happen in one of those four spheres, one of those four domains. Very simple.
We keep the language the same that you use now because it is of no value for me to come into your business and to try to tell you, hey, listen, here's a whole bunch of new language you have to learn. Here's a whole bunch of new information you've got to take aboard. Here's a whole bunch of new systems and processes you've never heard of, but guess what? If you want to avoid risk, if you want to mitigate risk, and you want to leap into chaos, you've got to understand all of this.
And that, my friends, is not necessary. So how do we do it? Here at Preparedness Lives Incorporated, we are proud to launch our fractional chief risk officer program at two levels. First, our core intelligence level.
We consider it an open source fusion service. So open source intelligence is all the information that is currently available on the internet that you don't have to pay for. A fusion service means somebody else is taking all of that information that exists in the internet, putting it together, crunching it, putting it through a bunch of different systems, and spitting out something that is actually useful to you. That is what we do in the core intelligence.
So what do we do? We deliver every 96 hours a list of what has happened. And so if you think about, we're going to engage with you twice a week via email. Twice a week, you're going to get an email that's going to outline three specific things that you can do in your business.
Everything we deliver is an actionable step that you can take now that requires no or very nominal financial investment, not from us, but activities that you can do. Consider it a DIY. This is you acting and deciding whether our advice is appropriate for your business, you then implementing that in your business, and you get 11 specific recommendations for us per week. 11 recommendations come through via two emails and one weekly video.
So the emails are going to be based upon what has happened in the world in the last 96 hours of risk. So we take, we use artificial intelligence to take over 1200 touch points or sensors that we have out in the internet to draw this information. We draw it in, we put it through a ringer that certifies and verifies that this is accurate information because we all know with artificial intelligence that much and some of what it produces is garbage. Some of what produces is inaccurate interpretation.
so we simplify it down to a number of notable events that have happened in the last 96 hours to small and medium businesses and in that what is useful to you we then apply human expertise we then take the laundry list of about 24 to 25 that are kicked out of the AI generation machine we look through we verify them and we determine from them the top three that are most useful to you so you get a this happened to a small and medium business in Adelaide, Australia they had this cyber attack this is what the employee did as a result we recommend you do the following things that's what you get three of those via email twice a week and then once a week we're going to send you a weekly video on one of the four risk areas so think about every month you're going to get a 30 minute or sorry 15 minute video on cyber risk on reputation risk on strategic risk on operation risk so what happened in the last 30 days in cyber what is the big takeaway from that and each one of these videos are going to give you five specific actionable items so every week you're getting 11 specific things that you can implement should you choose in your business that will mitigate risk we can't prevent events from occurring and we can't bring risk to zero but we can take some significant efforts to reduce it as much as possible and then once a month we are going to send you a DIY platform and a how-to a handout so for example the first one in the program is mapping one of the most important things that is taught process we're going to teach you how to map how to visualize and lay out your entire end logistics process right from the problem you identify in society that you want to solve right to I've delivered the solution to the customer and I'm maintaining customer relations and every activity that happens in between we then teach you how to overlay your cyber touch points where does the internet and software touch these points to identify weaknesses for your cyber hygiene that's an example of month one and every month following that you get a new handout that walks you through we'll then once we get over the initial layout of your organization we're then going to move into how to do a threat and risk analysis for your business and the environment in which you operate we're then going to lay out month by month how to set up a business continuity management system in accordance with the ISO standards imagine you would pay $7,000 for a business continuity consultant to come in and do this we're going to give you the step-by-step instruction of how to do it yourself as part of the monthly membership you get one of these and our culmination event every month is we jump on a zoom call with myself and industry experts for two hours a live Q&A for everybody within the core intelligence program and you can ask whatever question you have about your business about any topic of the day and we're going to bring that to you live and on the internet the whole purpose of this is we're going to take the world of information out there we're going to wash it through an intelligence analysis we're going to give you actionable things so if you think about the ideas that we're providing we're providing you 48 specific actionable risk-related steps per month a handout per month that shows you how to map and improve your business processes step-by-step and a two-hour live expert facilitated discussion on risk where you get to ask pointed specific questions about your business that is our core intelligence and our next level of the program is for our fractional chief risk officer is transformational expertise this is not to do it yourself but to do it with you that is us coming on board and we limit this there are only five companies that will have access to this program and we sit there but we do it with you we sit down we help you set up that operational mapping we help you set up your risk your threat and risk assessment for your company and the region we help you set up your business continuity management system we do this at an accelerated rate we have one-to-one coaching calls you and I will jump on an hour call every month to sit down and talk about what's going on in the risk world with your business how can we help what products do you need how can we best intervene to assist your business most business consultants will come in and give you a report they'll give you a day of training and then call us if you need house and we'll come back next year that's an annual iteration no in transformational expertise we're in your business every quarter every quarter we return to do a complete end-to-end assessment do what we have provided is it working for you what has changed in the last 90 days in your business that means we need to go in and tweak this program we're going to talk to your people we're going to talk to your employees we're going to talk to everybody involved in your system to make sure that we wrap your business in an insulation to the greatest extent possible understanding we can't prevent disruptions but transformational expertise level that is going to do the best possible you can for your business to set you up for success and it's built on relationship everything we do at Preparedness Labs Incorporated is built on a relationship it is my responsibility to earn your trust it is my responsibility then to deliver value and maintain your trust which is why we've chosen to deliver these programs in a subscription model a monthly subscription model there's no discounts for annual price I'm not looking for all of your money up front I'm looking to demonstrate value to you to earn your respect to earn your trust and to maintain that so at any time if I no longer provide the value or you don't see the value you simply cancel you keep everything that you have and you walk away no risk absolutely no term no 90 day discount no 90 day service required nothing the second you don't find value in this program you simply terminate your subscription and you walk away it's all supported on the Shopify program platform it's very easy for you to enroll it's very easy for you to cancel it is my responsibility to earn your trust so why us why preparedness labs incorporated in the risk management well I'm a researcher in social capital so I know that you are successful in business because of human relationships you are unsuccessful because you're trustworthy because you're somebody who delivers on your work and you value that and you only want to work with people who do that and I understand it is my responsibility to earn your trust that is not something I can expect trust is not anointed I don't deserve it simply because I'm a professor I don't deserve it simply because I'm the CEO or founder of a company I have to earn your trust so we deliver that how do we do that very simple this YouTube channel the podcast our five social media feeds and everything we put on our website we have it's free we provide free information to the business community on a regular recurring basis we have a free risk download on our website at preparedness labs.ca we have a free family preparedness guide at our website we have an annual journal of preparedness in Canada because we're a Canadian company that we produce every year to talk about the broader picture of what preparedness holistically looks like in our society all of this is free of charge I do this because it is my responsibility to earn your trust it is my responsibility to demonstrate that I am skilled in this area that I am trustworthy and that what I do is evidence based I'm a professor I'm a veteran everything that I speak about here is based upon evidence and I can back it up with absolute specific journal articles research and here at preparedness labs incorporated we have a research division and that means we have a portion of the company that is dedicated to actively conducting research in the risk management area so it's not just us selling something it's not just us providing something we're out there in the trenches trying to better understand and conducting research and publishing it on what the risk environment looks like it is our responsibility to earn your business