Why you should “manage” #risk by #PulsebeatsNotPostmortems

A queue for risk

It’s now about ten years since the financial crisis. I still remember the big queue outside #Northern Rock in Kingston, London.

And it’s a reminder of the enduring impact of poor risk management in banking.

But risk is the flip side of opportunity.

If we wanted to avoid all risks, no ship would ever leave port.

But then nothing would be achieved.

So we have to manage risk.

But the traditional approach –

• identify different risks;
• assess their likelihood;
• evaluate impact; and
• identify actions to lessen & transfer the risk.

– Often neglects:

• Wider people issues;
• Strategic aspects;
• Risks happening at the same time; and
• Inability to take action.

Think #Brexit.

Here’s some examples, from my own experience:

Problem with a new organisation – implementation

They had a good list of necessary actions to manage risk, but it was not implemented.

The solution was to increase visibility of risk by creating monthly progress reports to the Board.

Problem with a high profile public sector programme – messenger shooting

The staff were too frightened to report risks truthfully. (This is often the case, when the management style involves shooting the messenger of bad news.)

The solution was to create a forum for staff to do so without blame and when time permits, change the underlying culture. This (shooting the messenger, because you don’t like the message) is a common problem.

Problem with a complex change programme – overload

The Board couldn’t come to grips with risk because it was swamped with long reports.

The solution was to write a eight page summary, concentrating on the key elements – a programme initiation document.

Problem in a caseworking organisation – multiple risks & legacy.

They hadn’t  considered the impact on reputation of several risks happening at once.

The solution was to separate out legacy cases (which were the problem ones) from the other cases.

 

When delivering projects, it pays to follow my #MartialArtsPrinciple of

#ManagingByPulsebeats and not by post mortems.

The pulse beats means:

• Keeping a finger on the pulse;
• Becoming alert to warning antennae; and
• Acting before issues become problems.

As distinct from post mortems, trying to work out why the patient has died.

 

As Rosabeth Moss Kanter, a Professor at Harvard Business School said:

“The challenge is to learn to dance on a shifting carpet, rather than seeing the carpet pulled out from underneath.”

Captain Chesley Sullenberger, the pilot who successfully crash landed on the Hudson River, after colliding with a flock of geese, is a good example.

The captain saved 155 passengers’ lives by:

• Being prepared;
• Having studied past water landings; and
• Being confident enough to make the snap decision to land on water.

And to write a book about it.

Picture by Dominic

Some of these issues apply to many organisations, in my experience.

Are you vulnerable?

Please feel free to comment this post.

You can also contact me here:

mike@barnato.com

@MikeBarnato

mikebarnato.wordpress.com

#MMAMike