Risk Rap

Rapping About a World at Risk

Tommy Bartlett Thrill Show

The Midwestern region of the United States has been devastated by rain, floods and tornadoes. This year is on a pace to set the record for most tornadoes in a season. The incessant rains that continue to fall have led to devastating floods of communities in Minnesota and Iowa. The unusual spike in increased precipitation could also threaten corn crops and other agriculture due to too much rain. The rain is posing significant risk to the regions economy.

Nowhere has the impact of geo-risk been as starkly demonstrated as in the disappearance of Lake Delton. Built in the 1930’s Lake Delton is a key anchor attraction for the regions important leisure and tourist industry. Long a favorite getaway destination and vacation spot for heat challenged residents of Chicagoland, many will now be forced to find another site to escape those hot city nights. Lake Delton escaped into the Wisconsin River after its dam broke due to heavy rains. Talk about unforeseen risk events. This has to rank with having your place of business destroyed by the falling Skylab. In statistical probability nomenclature the disappearance of Lake Delton is a “fat tail event.”

Lake Delton is an anchor attraction of the Wisconsin Dells. Occupancy rates will surely suffer at the 20+ resorts located in the area. The disappearance of the lake will strike a severe blow to the critical tourism revenue so important to the local economy. The Tommy Bartlett Thrill Show (The Greatest Show on H2O) is one of the first casualties of this extreme risk event. He’ll have to ground his aquatic hi-jinks and bring in landlubbing jugglers and unicyclists due to the absence of water in the lake. It’s a courageous recovery strategy and we hope that the area will attract enough crowds to make it profitable for Tommy Bartlett’s 55th year of providing family entertainment for Lake Delton visitors.

I would bet that few business depending on Lake Delton for sustenance may not have included the possibility of the lake’s disappearance in its annual risk assessment revue. This is ironic and dangerous because the lake is the primary business driver for the areas small businesses. All local businesses must consider the availability of clean and accessible water when conducting it’s annual risk assessment and opportunity discovery revue.

It seems that whenever you take something for granted your begging to be clobbered by some extreme event that comes at you from left field.

Another consideration is “what could these businesses have done to protect themselves from this risk event?The obvious answer is risk transfer by purchasing insurance. It would be interesting to see what companies had business continuity and interruption policies that covered this type of event.

This is a good lesson in product market risk concentration. The products and services of area businesses are almost entirely tied to its proximity to the lake. If that single factor fails or as in the case of Lake Delton disappears your business fails. That is too much risk concentration in a single factor and it can be tempered by developing products and services that are not tied to the lake.

The larger lesson from this type of event is that small businesses need to take an activist role to lobby local and federal representatives to make sure that the lakes, dams and water quality is protected and properly maintained. This is an infrastructure issue that goes to the heart of the debate about national policy and program priorities that need attention and funding. Infrastructure is an issue that has a dramatic effect on small brick and mortar businesses. If a bridge, road, street, electricity or telephone service is interrupted it can put a small business out of business. Small businesses need to assess these risk factors in its business plan and outline contingencies to manage these risk events should they occur.

Infrastructure programs is a growing problem and will continue to grow as state and local governments scale back on maintenance and improvement projects due to budgetary constraints and the inability to raise taxes. Unfortunately the nation’s infrastructure needs immediate massive help. The Tommy Bartlett Thrill Show won’t be surfing its way through the velvet waters of Lake Delton this summer. Let’s hope they’ll be back thrilling overheated Bear fans next summer.

You Tube Video: Beach Boys, Surfin USA

Risk: geo-risk, environment, infrastructure, tourism, agriculture, futures, small business

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June 12, 2008 - Posted by | commerce, environment, infrastructure, pop | , , , , , , ,

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