Professor Dr.-Ing. Aleksandar Jovanovic talks to TRANSFER magazine about his fascination with risk and explains why risk management plays a particularly important role when it comes to emerging technologies, sustainability, and innovation.
Professor Jovanovic, you’ve been an active part of the Steinbeis Network since 2001 and you now spend a lot of time thinking about risks and risk management, especially in an international context. Why does it fascinate you so much?
You said I “now” spend a lot of time thinking about risk? More like I always have! It was a conscious decision at the time to continue my work on risk, safety, and risk management when I joined Steinbeis. I found it really exciting to see how interest has risen in such topics, how the dividing line between individual aspects has evaporated, and how suddenly multidisciplinarity and interdisciplinarity are like the new commandments. I worked for years as an engineer and machine builder looking at the safety of industrial plants, such as nuclear power stations. But around the end of the 1990s and the turn of the millennium it became obvious that no one was in a position to carry out a proper risk analysis if they don’t take aspects like perceived risk or societal acceptance into account. Everywhere, the world over! If a new technology like nanotechnology, fracking, drones, or terahertz radiation technology is accepted on one side of the mountain but it’s not on the other, then you have to look into why. You have to understand the risks in as much detail and with as much objectivity as possible. Doing that often involves applied risk research and international collaboration. Steinbeis offers a number of advantages in this respect. There’s no other “innovation infrastructure” with anything like the effective and efficient ways we have to collaborate directly with industry, research, universities, and, in some cases, the authorities and international organizations such as the EU, OECD, ISO, UN and so on. It’s something we’ve proved within the Steinbeis Advanced Risk Technologies (R-Tech) Group in more than 100 projects until now. Our portfolio spans an extremely broad spectrum of projects from huge projects worth up to €20 million for the EU or €6 million for companies, right down to small-scale services for SMEs.
Risk management is a challenge in itself for companies, even more so if you add the challenges of globalization and going international. What would you say are the key instruments for tackling such complexity, or complexities?
Risk management isn’t a luxury. There’s something called the risk paradox and in his book of the same name, Ortwin Renn explains that people can’t quite cope with the risk paradox, or they’re scared of the wrong things (or the other way round), and because of this what’s needed is a risk management model that revolves around business practice, that’s credible and transparent. To do this, the model has to be “open” since the biggest risk is the risk which we overlook, or we don’t recognize, or don’t actually want to recognize. We’ve systematically developed a model along these lines in the R-Tech Group and applied it to practice. This model has also been firmly anchored into standards that have been developed in Europe and elsewhere in the world under the auspices of Steinbeis. These Steinbeis standards are in use across the world in European EN standards, CEN standards, and DIN-SPEC in areas such as the “risk-based maintenance of industrial plants” or “the risks of emerging technologies.” The concept, these standards, the specialists we educate and train at Steinbeis University Berlin – they’re the elements, in some cases even the “instruments” if you will, that you need to manage and control risk in a “brave new complex world.” What you mustn’t forget at any point is the aspect of resilience. With some risks the most interesting question is not necessarily how often, or what will or can happen, but how will my complex system react? If a system does go down, for example, some of the new energy supply systems based on renewables, what will happen to society, to the economy, or to organizations? How quickly will the systems “recover?” How resilient are these systems to cyber attacks or terrorism? All of these questions are now occupying the thoughts of lots of specialists in Europe and the rest of the world. The European Virtual Institute for Integrated Risk Management (EU-VRi) is a European Economic Interest Grouping and part of the Steinbeis R-Tech Group, and with the support of other members of the group, it’s spearheading a new EU project called SmartResilience. Its main objective is to determine indicators – including those stemming from big data – and to identify and monitor these in order to recognize potential weaknesses on time and manage them successfully.
You’ve now set up franchise companies in Serbia and South Africa. What was the background to that and in what ways does this benefit your customers?
We have to work where (a) there’s need and (b) there are the resources. Thanks to the support of Steinbeis, the South African energy provider Eskom now manages plants with a capacity of over 40,000 MWe in 14 major power stations – that’s 95% of the whole country’s capacity! And Steinbeis R-Tech is responsible for this! To set up the right teams on site, not only do we have to work together closely but we also have to achieve some kind of integration with local partners. More than half of the people working for the Steinbeis R-Tech teams on site are from South Africa; all we do is provide “services for an energy supply company,” so we build up a better local infrastructure, we train people, we involve groups of people in society who were previously disadvantaged. To do this you need people on the ground and a good way to do that is to have a Steinbeis franchise company. This works to the benefit of Steinbeis, to the benefit of South Africa, to the benefit of everyone involved in the project. It’s a win-win combination. We have a similar setup in Serbia, where the client is in the oil industry, although in this case we want to use local resources for other projects across the world and in Germany. In simple terms, instead of bringing people to Germany the people working over there in the Steinbeis franchise company perform a kind of nearshore outsourcing function, which again works to the benefit of everyone.
Is there major interest in the topic of risk, especially with respect to emerging technologies, sustainability, and innovations, both on a national level and on an international level, and does this interest result in actual management practice that works globally? And if not, why not, if there are still increasing occurrences of risk?
Of course it’s sometimes too difficult to “be a prophet sitting by the village fire,” but when someone from Steinbeis goes to an international risk convention and gives a keynote speech about the risks of Industry 4.0, then people “back home” do notice. There’s no question that our strength has to be “Vorsprung durch leading risk management.” There are lots of people who can talk about risk, but not everyone has actual solutions or services in this area. The Steinbeis R-Tech Group can “walk the talk.” We’ve proven that already and will do many times more in the future through close international collaboration. This is also why we’re involved in the process of international standard setting for things like ISO standards 31000 and 31010, in which the Steinbeis R-Tech Group is playing an active part. In fact we’re just starting a new project – with the Chinese actually in China – called Risk Radar China.
Professor Dr.-Ing. Aleksandar Jovanovic is director of the Steinbeis Advanced Risk Technologies Group in Stuttgart. The alliance of enterprises offers its customers a variety of services related to business risk management, the analysis and management of technical risk, data analysis, and project management.
Professor Dr.-Ing. Aleksandar Jovanovic
Steinbeis-Transferzentrum Advanced Risk Technologies (R-Tech) (Stuttgart)