Risk identification is a critical first step in any effective risk management process. By identifying potential risks early, organizations can prepare to mitigate them before they cause harm. However, one of the biggest challenges is that risks can often be overlooked, misunderstood, or even dismissed as insignificant. This is particularly evident when businesses focus only on the obvious, more prominent risks, and fail to account for the hidden or seemingly minor threats. Such an oversight can lead to catastrophic consequences.

Two powerful stories from Hindu mythology—those of Hiranyakashipu and Ravana—offer profound lessons about the pitfalls of failing to properly identify and assess risks.

The Story of Hiranyakashipu: Complacency in Risk Perception

Hiranyakashipu, a powerful demon king, sought invincibility by requesting a series of complex boons from Lord Brahma. His requests were meticulous and carefully crafted to ensure he could not be killed by any human, animal, deity, or weapon. His exhaustive risk mitigation strategy seemed foolproof. He accounted for every possibility: time, place, weapon, and type of enemy. Or so he thought.

Yet, despite his elaborate precautions, Hiranyakashipu was ultimately killed by Narasimha, a half-man, half-lion avatar of Lord Vishnu. Narasimha bypassed the demon’s boons by attacking him at twilight, neither day nor night, at the threshold of his palace, neither inside nor outside, and using his claws, neither weapon nor force. The demon had failed to anticipate that his seemingly flawless risk mitigation strategy could still be circumvented through creative means.

This story teaches a powerful lesson about the limitations of risk identification. Hiranyakashipu’s downfall stemmed from an inherent blind spot in his thinking. He believed that by eliminating all obvious threats, he had achieved complete security. What he failed to consider were the unconventional, the unexpected, and the seemingly impossible threats that lay outside his realm of understanding.

In business, leaders often make similar mistakes. They believe that by addressing known risks—market competition, regulatory changes, or financial downturns—they have covered all potential vulnerabilities. However, risks are not always obvious. Like Hiranyakashipu, companies often fail to anticipate creative disruptions or subtle threats that do not fit into the typical frameworks of risk identification. This is why risk identification must go beyond the obvious and the conventional.

The Story of Ravana: Ignoring the Small, Overlooking the Insignificant

Ravana, the demon king of Lanka, also sought invincibility. Like Hiranyakashipu, he took extreme measures to protect himself from powerful entities—gods, demons, and celestial beings. He was confident that no divine power could kill him. But in his arrogance, he deemed humans and animals too insignificant to pose any threat. He dismissed them as beneath his concern.

It was this very oversight that led to his downfall. Ravana was killed by Lord Rama, an incarnation of Vishnu in human form, with the help of an army of monkeys and bears. His underestimation of these lesser forces proved fatal.

This story is a stark reminder that risks often come from sources we least expect. In the business world, many leaders make the same mistake as Ravana. They focus their attention on major threats—large competitors, new technologies, or geopolitical events—while overlooking smaller, seemingly insignificant risks. However, as history has shown, it is often these overlooked factors that lead to major business failures.

Nirma in India shook the stronghold of Unilever’s detergent Business. CavinKare’s , in India, sachet business shook the market leaders’ in shampoo business.

Another example of the Challenger Space Shuttle disaster. The entire mission failed because of an O-ring malfunction, a seemingly small part of the spacecraft that was not adequately assessed for cold-weather conditions. This minor oversight led to the loss of lives and a massive reputational blow to NASA.

Just as Ravana overlooked the power of humans and animals, companies often fail to see the potential impact of minor operational issues or seemingly insignificant factors that can spiral into large-scale crises.

Lessons for Modern Risk Management

These stories highlight a crucial point about risk identification—it’s not enough to identify the obvious. Risks often lurk in the unexpected, the unconventional, and the underestimated. A robust risk identification process must involve a comprehensive evaluation of both major and minor risks, known and unknown threats, and the possibility of creative disruptions.

The solution lies in cultivating a mindset of humility, vigilance, and creative foresight. Modern businesses must:

1. Challenge assumptions: Like Hiranyakashipu, businesses often create false assumptions about what risks are possible and which are not. By regularly questioning and revisiting these assumptions, organizations can avoid the trap of complacency.
2. Look beyond the obvious: Like Ravana, businesses tend to focus on the significant threats while ignoring the smaller ones. However, it is the cumulative impact of small, seemingly insignificant risks that often lead to the biggest disruptions. A comprehensive risk management strategy must account for both large and small risks.

In conclusion, the stories of Hiranyakashipu and Ravana offer timeless lessons in the art of risk identification. Both demonstrate how easily one can fall prey to overconfidence and blind spots. But for modern businesses, the key to success lies in identifying not only the obvious risks but also the hidden, underestimated ones.

 It’s not what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.

– Unknown