Risk and Reward
As I fail miserably to wean myself off Halloween candy before heading into the Thanksgiving-Christmas-New Years’ sugar fest, I preface this blog with the disclaimer that I am experiencing a massive sugar high that may lead me to, as the title implies, take more risks than I normally would…
The concept of risk is something I have thought of often in my life – both personally and professionally. My father, John Ditto, was an aviator in the Marine Corps who flew A-4s (the single-seat attack aircraft flown by the instructor pilots in the movie “Top Gun”) throughout most of his 24-year career, and who took great risks by just showing up to work. While he survived relatively unscathed through two tours of Vietnam, along with marriage and raising two kids, he was approaching the “flying-a-desk” portion of his Marine Corps career as a full bird colonel when his risk-taking days ended on January 19, 1981, flying the AV-8A or harrier jump jet (the one that can hover and take off like a helicopter). The plane had many kinks in the early days of its inception and killed quite a few good men, although none with my dad’s rank or experience. I still miss him, and wish he knew my husband and my kids, but one thing I learned from his death, quite starkly, as a nine-year-old, is that risk, including risk leading to death, is part of life. We can either embrace that concept or be paralyzed by it.
I choose to embrace risk in some portions of my life and avoid it in others. I am not an aviator (although it is on my list to get my pilot’s license at some point!), but I have jumped out of an airplane, rollered on many coasters, and have at least dabbled at snow skiing, water skiing, mountain biking, roller blading, ice-skating, etc. All of these slightly to pretty risky activities pale in comparison to my “first love” of risk – riding horses. I have been obsessed with horses since I could talk and that obsession has not waned — despite now fully understanding the risk involved in riding them. In fact, understanding that risk has made the reward of riding and competing that much sweeter. It also makes it terrifying at times.
The type of riding I do is called “Eventing” – I encourage you to look up the details. Essentially it is like a triathlon in that is has three phases and a competitor’s score is cumulative of all three. Two are jumping phases and one involves riding a pattern that is judged on accuracy, fluidity, balance and teamwork between horse and rider. Every time I compete in an event – no matter how often I have now done it – I experience nerves unlike any other. The reason, quite simply, is the inherent physical risk in asking a 1,200 lb. animal with a mind of its own to jump over solid obstacles (known as the cross country portion). If I mess up and throw my horse off her game in the lead up to a jump, she could hurt me, but she could also hurt herself. On the other hand, if we are in sync, it goes beautifully and there is nothing else like it. The reward is knowing I have completed something extremely difficult with great risk involved and have done so, hopefully, with fluidity and grace.
Because of these “risky” experiences, I approach risk at work with two basic questions. Is it more or less scary than riding a 1,200 lb. animal around a cross country course? Is it more or less scary/risky than what my dad experienced during his career? The bottom line answers for me are invariably, less.
Working on behalf of electric utilities for the last 16 years, and with gas and water utilities more recently, the issue of risk has taken on a slightly different meaning for me. Electric utilities must manage myriad risks 24/7/365 – such risks include natural ones like storms (often really big storms) of all kinds, wildfires, earthquakes, floods, extremely high and low temperatures, mudslides, solar flares and tidal waves. They also include physical security risks like shootings and bombs, as well as more innocuous — but potentially no less impactful — threats like wildlife incursions and copper thefts. And then there is the threat, or risk, imposed by cyber-attacks. Ironically, the management of certain physical security threats involve cameras managed by wireless communication that is in turn threatened by potential cyber-attacks. So, the risks are often managed in a cross-cutting way to incorporate the overlap between natural, physical and cyber threats. The bottom line is that running such a complex system as an electric utility involves myriad risks and risk management strategies.
Electric utilities have often managed this high level of complexity and risk by creating redundancy in their systems so that if something happens to “A,” “B” will work, and if something happens to “B,” then “C” will work, and so on. There is only so much redundancy that can be put in any system to balance the ability of customers to actually afford the product, so utilities then must prioritize the most frequent and most impactful risks. The management and prioritization of such risks might change over time as we have seen with the evolution of cyber threats. But major risks have been and always will be there – natural disasters, physical and now-cyber threats, insider threats, thefts, etc. Believe it or not, for electric utilities, the number one cause of power outages at the local distribution level is squirrels (!!) – they like to eat through power lines (unfortunately for them and us).
These risks – great and small — have been, and will be, managed by utilities through redundancy, applying lessons-learned from previous disaster recovery efforts, exercising scenarios like the big GridEx IV table-top exercise hosted by the North American Electric Reliability Corporation (NERC) this month, maintaining partnerships with key government agencies, and applying potentially helpful technology appropriately such that they are managing the cyber risks on the front-end of deployment as much as possible.
Risk is part of life, whether through your chosen profession, hobby or foods (if I keep eating sugar like I have this week, my risk of gaining 10 pounds in the next month will increase exponentially). Some risk is not chosen, but exists anyway – natural disasters, terrorist attacks, disease. The bottom line is how we see such risk. Do we fear it, embrace it, manage it? Utilities must manage risks every day, and I am very glad to know many smart and dedicated people involved in this ongoing risk management. The reward of managing this risk is, quite simply, modern life as we know it.
Until we meet again…