Are you managing risk or running an internal PR campaign
Do you have an uncertainty Management system?
OK, so that’s an unusual question, but those of you who have had a look at the relatively newish (if you call 2009 newish) ISO31000 will hopefully recognise the core element of that question. It’s simply asking if you have a risk management system, because in ISO31000, that’s how risk is described.
RISK AND UNCERTAINTY
ISO3100 defines risk as the “effect of uncertainty on objectives”. It’s short, concise, simple and in my opinion very powerful. I think it also has the potential to change the language of risk in the workplace, and again in my opinion, I think that is a good thing.
IS RISK REALLY JUST UNCERTAINTY?
Well, one way of looking at things is to view this from the opposite. If there was no uncertainty in a situation is there any risk? If you are certain the sun will come up tomorrow, then there is no risk whether it will or won’t. You don’t need to try and manage that event. I know that may seem like a weird example but that’s the point. It’s really hard to even think about risk in terms of events where there is no uncertainty.
Of course, if you were wondering about whether it was going to rain tomorrow, and you really needed it to, then you would be far less certain about that, and the more you had riding on the outcome then the more effort you might take to get a handle on the risk (or certainty). If you were very sure it wasn’t going to rain when you really needed it to, then you might make other arrangements like buying water, or not even starting whatever activity you needed the rain for.
UNCERTAINTY AND PERCEPTION
The cool part about using uncertainty (rather than risk) is that it can introduce another way of approaching issues of risk, particularly because when it comes to risk, our perception and beliefs sometimes get in the way.
Keeping with the rain theme, in South East Queensland we went through an extraordinary few years of unprecedented drought and then devastating floods. We spent huge amounts of time and money managing both, and in the end we didn’t get it all right. The government committed resources to managing the drought because they weren’t certain when it would rain. Then it rained a lot and we tested out the mitigation measures implemented nearly 40 years earlier that we thought would “flood proof” Brisbane. Turns out they didn’t.
SO SHOULD WE TRY AND MANAGE UNCERTAINTY AT ALL THEN?
Absolutely, and that is the point. Life is full of uncertainty, and to not try and manage it at all is foolish at best and dangerous at worst. In the case of the droughts we spent a lot of money on infrastructure that it turns out we didn’t need. But we did need the water restrictions. So doing nothing would have meant disaster. For the flood, there was a lot of discussion on how bad it could have been without the previous measures put in place after 1974. Of course that is all we can do because we are managing uncertainty. We will never really know what the other outcome would have been for sure. If we were sure, then it wouldn’t be risk management, it would simply be planning.
HIGH RELIABILITY ORGANISATIONS AND UNCERTAINTY
So at a high level within organisations wanting to manage uncertainty around operational outcomes (objectives), there is now a fair bit of information about high reliability organisations (HRO’s), and most of it tends to say that HRO’s tend to have fewer incidents. The really important question of course is why?
Well, it turns out you can’t just go out and call yourself a high reliability organisation (bummer right?), apparently you have to do certain things, and the leaders have to behave in some specific ways.
HRO’S ENTERTAIN UNCERTAINTY
It seems that the leaders within high reliability organisations are aware of a thing called hubris. Hubris is sometimes likened to arrogance or extreme pride. It can lead to overestimating the effectiveness of your current efforts, and when this is applied to safety, or environment, or quality for example, this can be very dangerous. If leaders are full of hubris they may be inclined to rely too much in a belief that because everything is great today, it will be great tomorrow.
Leaders in HRO’s don’t do this. Leaders in HRO’s entertain doubt. They entertain uncertainty, and more to the point when things are going well they will actually try and create a sense of unease. A sense of, “What are we missing?”. They are alert to weak danger signals (and they know what that means), not waiting for someone to get hurt before overreacting and wanting to blame whoever stuffed up. They understand that humans are fallible and can make mistakes.
HOW CERTAIN ARE YOU ABOUT YOUR RISKS?
So most of our organisations would have risk management systems in place, but are they doing what you need them to? Are they managing uncertainty? Do your leaders create a sense of unease? Can you take bad news to the boss and have it welcomed as a sign that their unease was justified? Or do you work in one of those organisations that shuns uncertainty, where people are scared to take bad news higher? If so, you are not managing risk, you’re running an internal PR campaign.
Safety Dave Whitefield
BASELINE TRAINING & CONSULTING
“If we were sure, then it wouldn’t be risk management, it would simply be planning.”