As anyone who saw the movie Titanic will know, not every passenger was so well-financed. Because none of the average folk traveling in steerage anticipated the ship's collision with the iceberg, none of them calculated the increased risk they faced. While 60 percent of first-class passengers survived, only 25 percent of third-class passengers were rescued. It was “women and children first,” and males traveling first-class second.

Hubris played a large role in the disaster, as it does in many “unanticipated” events. Because the Titanic was considered to be unsinkable, she was outfitted with only 20 lifeboats. This means there were only enough lifeboats for half of the passengers. If risk had not been silent and had instead been represented by a horn, this horn would have sounded 1,100 times as every other passenger boarded the vessel.

In addition to there being an insufficient number of lifeboats, the crew was insufficiently trained regarding their use. After all, the Titanic was unsinkable. How different is this to businesses not adequately and regularly training their own crews regarding fire safety, active shooter incidents and cyber security? Because, of course, it will “never happen here” until it does.

Two British government investigations were conducted following the disaster. They found the ship's late captain, E.J. Smith, raced at an excessive speed of 22 knots through a recognized ice field off the coast of Newfoundland. And so he was assigned a good portion of the blame. At least, unlike the captain of the stricken Costa Concordia, he went down with his ship, instead of “falling” into a lifeboat.

Because 1912 was 20 years before the principles of radar were understood, let alone put into practical use, risk was ratcheted up yet another notch for passengers and crew. By the time the iceberg was visually sighted, it was too late for the crew of the 900-foot long vessel to avoid a collision. While essential information regarding the risk of colliding with the iceberg had been processed, it was too late to act upon it.

The spectacular sinking of a 900-foot-long luxury liner has a great deal in common with even the most prosaic disasters. Critical information is almost always available—it is simply ignored or processed too late. It is really no different than skidding into another car on an ice-covered street.

The “Titanic Rule” should have been put into effect before the crew left Southampton, England for the U.S.:

Massive size + Excessive speed + Delayed information + Insufficient risk mitigation (too few lifeboats) + Heightened value (2,200 passengers) + Arrogance of Process (“unsinkable”) = Recalibrate your risk assessment before pulling up anchor

As risk managers, we adapt this rule to fit any number of situations. By titling it the Titanic Rule, we assign risk management the urgency it deserves.

One hundred years ago, the captain, crew and passengers of the Titanic were not ready for their unscheduled collision with an iceberg. With hindsight, we have an advantage. It is now easy to realize they could and should have been ready. Yet we frequently meet business owners and gifted professional service providers who see an issue in a business and adopt the “not going to happen here” mentality. This leads them to do nothing to improve a situation and reduce risk. The U.S. economy is littered with carcasses of companies using the same doomed strategy.

As risk managers, it is our responsibility to look forward to the next 100 years as we help our insureds anticipate impending disasters. Are you ready?