On this first day of the year, I think it’s time to introduce a new seasonal them; the holiday risk management edition.

Last night, people celebrated the New Year in all of the traditional ways. One of those traditions that’s over 100 years old is the New Year’s Eve celebration in Times Square, New York City. Since 1904, people have visited Times Square to celebrate the coming year. The ball has been suspended above Times Square every year since 1907 (except for 1942 and 1943 because of World War II lighting restrictions). Each year that the ball is raised, it is lowered in the last minute of the year and the countdown begins and each year it seems that the ball has gotten more elaborate. (Courtesy, Times Square)

But what about having that throng of people in one small area of one of the most important cities on Earth in the era of the Global War on Terrorism? What about having such a spectacle, broadcast globally on television and streamed on the internet live for the world to see in a time when we fear mass shootings?

If I may, I’d like to enter into the world of the risk management team that works behind the scenes to make this event such a success year after year. Make no mistake about it, I am not a risk manager by trade, but I have some education and an underwriting background. All this to remind you that I might miss some things, even some important things, but at least it’ll get you thinking and that’s really the point anyway.

In truth, there are many risks associated with an event like this.

  • There are risks to the broadcast feed, but in general, the broadcast partners will work to mitigate those risks.
  • There are risks to the entertainers that will perform so there’s a risk that an entertainer doesn’t show up or that they get sick or hurt before, during, or after they perform. The entertainers’ teams and broadcasters will deal with those risks, too.
  • There is a risk of bad weather, but there’s really nothing we can do about that. Not even the Mayor of New York City can control the weather outside.
  • There is a reputational risk if things don’t go well. That’s probably why the city inflates their estimates of how many people attend every year. The city likes to say that over 2 million people show up, but some experts in crowd size prediction estimate closer to 100,000 people are there. (In truth, I’m more willing to take the lower estimate than the estimate provided by the politicians, but that’s just me.)

There are other risks as well, but I’d like to focus on what I consider to be the largest source of risk to this large of a public event; people. People bring the risks with them just because they are people. People are unpredictable. The actions and (more accurately) the reactions of groups of people are very predictable. When the football team finally has a 10-win season after a 20-year drought, you could fairly accurately predict the number of fans that will go to the game and to other venues to watch the game. What you can’t really predict is how each individual fan will react to the outcome of the next game, which will be in the playoffs. Will they get angry if the team loses? If they get angry, will they be in a public place and take that anger out on someone else? And on and on for thousands of fans.

Now, let’s consider that we’re putting over 100,000 people in Times Square, which is an area of several city blocks. If you’ve ever attended or watch this event on TV, you know that it’s really crowded there. When you put that many people in one place, a lot can happen.

One variable that changes the risk dynamic of an event like this is the presence of alcoholic beverages. Before the event, there will be places where revelers can consume their adult oriented beverages, either at home, their hotel room, or any number of establishments created for that purpose (and restaurants, too). Anyone that is legally allowed (and many that aren’t) will be able to get all the alcohol that they want before they arrive.

Alcohol changes the risk, but the people who find their way into the Times Square area will not be able to bring their alcohol there. The city controls this risk legislatively. Public drinking is against the law in New York City. This event isn’t held in a venue where providers can have licenses. Does that mean that people won’t get alcohol into the event? No. It just means that if a police officer sees someone with alcohol, there is a high probability (on this particular night) that at a minimum the alcohol will be confiscated.

What about the idea of people bringing things that they shouldn’t bring into the event? My mind goes to the idea that someone might bring a backpack in with dangerous items inside, including weapons. If weapons are a concern to you, understand that New York State has some of the most restrictive gun laws in the United States, and New York City is tougher than other parts of the state. Specific to this event, there would likely be signs prohibiting the carrying of any sort of weapons, even if legally licensed to do so by the City of New York.

On that note, the area where the event is happening has access control points. No one is going to be allowed into the event without entering through the access control points. While going through those areas, those who are preparing to celebrate will be required to pass through metal detectors, their bags will be checked, and they will be observed by officers of the NYPD.

This is a way of limiting the risk that someone will bring something into the area that they shouldn’t. This will be where much of the alcohol will be found and confiscated. This will be where any items that might pose a danger to other people will be found and the person likely detained. This will be where the police have their first line of defense against the risks that people pose.

Another way that risk is mitigated is the presence of cameras. It’s not like you saw when you watched Person of Interest, but there will be cameras all over the place and the police will be monitoring what’s going on using over 1,200 security cameras, the live feeds from any broadcast partner, and for the first time, surveillance drones.

There are more risks to consider and more ways that the city is working to make the event as risk free as possible, but time and space fails us. There is no way to get rid of all of the risk involved with an event of this size. On the other hand, you have to try and manage as much of the risk as possible and that starts by thinking about risk.

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