Thursday, July 22, 2010

Learning from crime

Tucked away in a non­descript room in the Ecole Militaire, the venerable military training centre in Paris, a team of six men and a woman sit in intense discussion.

As their company’s crisis management team, they have been informed that 10 colleagues, including their chief executive, have been kidnapped at the opening ceremony of a production plant in Colombia. Within seconds, the company’s security chief in Bogota is on the phone; “It looks like it could be the Farc [the Marxist Colombian rebel group]. It’s a hell of a mess here.”

For the next half hour the seven discuss options and make plans, while fielding calls from within the company as well as from the French authorities, the media and anxious customers. Then Bogota calls again with the news they feared. “We had a call from a guy calling himself JosĂ©. He says the Farc are detaining the hostages and they want $6m ransom.”

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..Fortunately, the kidnapping is an exercise and the seven are all students – albeit with considerable management experience – in the first intake of a one-year criminal risk management programme designed by Edhec, the French business school with campuses in Nice, Paris and Lille.

“They are all so into it . . . And some of these people have already worked in crisis situations. I’m amazed myself [at the involvement],” says Bertrand Monnet, head of Edhec’s research centre into criminal risk manage­ment and the professor behind the programme.

Created in co-operation with INHESJ, the education centre and think-tank of the French interior and justice ministries, the programme is the most tangible result to date of Edhec’s decision five years ago to introduce criminal risk management into its curriculum.

The rationale is simple. Today’s business leaders need to be able to understand and make informed judgments about a wide variety of criminal threats, says Prof Monnet, a former officer in the French Marine Corps. The course looks at the challenges facing multinational companies, from fraud to extortion, piracy, terrorism and failed states.
“Organised criminal and terrorist gangs today are targeting private companies, specifically multinationals, for example through counterfeiting, extortion, kidnapping, money laundering and piracy. We set out to identify and then understand the risk generators in order to find solutions to manage the threats,” he says.

The criminal risk research centre monitors criminal and terrorist incidents that affect businesses worldwide. Using a dedicated search engine designed by the centre, it researches and monitors criminal activities via media reports on organised crime worldwide. Prof Monnet also makes field trips to gain a hands-on view of the criminal threats to business.

“We have to understand the psychology of the stakeholders. In Nigeria, for example, it is possible to meet some of the groups; in Colombia and Italy, it is not,” he says.

Such visits also lead to close connections with security officers grappling with the problems on a day-to-day basis, some of whom have become visiting lecturers at Edhec.

One such is Nicolas Krmic, a security manager with Acergy, an equipment supplier to the oil and gas industry, who faces threats including kidnapping, data theft and armed robbery on a daily basis in his work in Nigeria and other African states.

“You have a lot of companies with former military guys – as I am – heading security who are most interested in showing muscles. But security is much more than that, it’s linked to all aspects of business,” he says.

Integrating security and risk management into a company’s ethos is not only necessary for effective security protection, it has the added result of enhancing corporate competitiveness, Mr Krmic argues.

“Security did not use to be a [core] business topic for most companies. But we have to understand that to win business you must deal with it . . . And if you prove reliable, clients will want to deal with you again.”

This dovetails with the thinking at Edhec. “This is not only about crisis management, but about risk management as a whole. It’s not just another add on, it’s a whole philosophy which we apply from our financial research centre to the programmes in the teaching rooms. This is a strategic option for our school, for students at all levels,” says Pierre-Guy Hourquet, dean of executive programmes.

Reactions from the pioneer students are very positive. Pierre-Yves Arnaud, a security consultant, has worked in the field with oil companies in Nigeria and Chad. In spite of such a wealth of practical experience, he says the programme has given him a better analytical understanding of risk and “a methodology to apply in any situation” for assessment.

“I should have started [my career] with this,” he says. He says he now better understands what he calls “the strategic importance of communications” in a crisis. “Whether you technically succeed or not, if you have a good communication with media, you will ‘win’ the case,” he says.

The security services also value co-operation with the school.

“When we mount an operation, for example, to release hostages, it is to our advantage that that top management in companies know us a little bit and understand what we do and how we work. This is why we work with Edhec,” says Lieutenant-Colonel Franck Chaix, commander of the Intervention Force of the GIGN, the French anti-terrorist unit.

The GIGN-Edhec course was the first such course the anti-terrorist unit has agreed to be part of, and is an example of the partnership between the two to establish contacts with business leaders.

Prof Monnet plans to refine the certificate programme with the lessons learnt before creating a full MSc programme in criminal risk management from 2011. “We’ll wait for another year to be sure that the programme is absolutely sustainable, and performing well.”
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