The Business of Risk Management, is it worth the risk?
Question : How would you ride a motorcycle with no clothes on?
Answer : Very carefully.
Even with all the right gear on, riding a motorcycle is a risky business. I know, I’ve been riding motorcycles for over 50 years. That’s a lot of risk. The main reason I’m still here, banging on about risk management, is that I ride very, very cautiously. Some people think it’s all down to luck, and I can’t help agreeing with them. I’ve been lucky. But I think about ‘Luck” differently from many other people.
For me, luck is what happens when you take total, unequivocal and complete responsibility for your own actions. Everything you do, everything you are and everything that you experience is your fault. The fault is not your parents, ‘I didn’t ask to be born’... It’s not your family, ‘The dog did it’... It’s not your business partner, ‘They are not a team player’... And especially not the driver of the other vehicle, ‘Sorry mate, didn’t see you’... The fault, and the consequence, is ... yours. “If he makes a mistake...I die.”
Which leads me to the issue of Risk Management. We all know about identifying business risks according to their probability, cost and impact. We all know how to buy Business Insurance, for Service Interruption, Tax Audit, Theft, Fire, Flood and probably Pestilence. We all know how much backing up we need to protect ourselves from data-hacking-virus-crashes and times when the computers just say “No”. We all know how much Security we need to deny access, scan cards, issue passes and capture it all on CCTV.
So are you engaging in Risk Management or just Risk Avoidance? How well insulated are you from the consequences of the decisions you make? Tom DeMarco has a list of useful questions for healthy risk management. Here are six of them.
- Is there a published census of risks?
- Is there a mechanism for discovering new risks?
- Are any of the published risks fatal?
- Is each risk quantified for probability, cost and impact?
- Does each risk have a monitored transition indicator for materialisation?
- Is there a single person responsible for risk management?
If you can’t answer yes to all of them, you’re not managing, you’re riding blind.
Good Luck.
Fish and Visitors
How was your Christmas?
Did you have any interesting visitors?
Benjamin Franklin reckoned that Fish and Visitors smell after three days.
I was reminded of that bit of wisdom at a recent Relationship Management Workshop just before Christmas. There were a couple of dozen people in the room. These were tough people. Many years at the top end of the construction industry had hardened them into formidable contract managers.
Take-no-prisoners, and shoot-the-stragglers sort of people.
I asked the participants how they planned to manage their relationships over the Christmas break. There was general agreement that ‘dealing with the relations’ during Christmas was something of a nightmare. Innocent sounding phrases like “Her side of the family” and “Helping with the drinks” took on an aura of dread. There were strict instructions issued about which subjects were to be ‘Not Mentioned’. Lips had to be buttoned and acts tidied up. It could be done, but only for three days, and with considerable discomfort.
The good news was that managing relationships is something that we can all do.
For three days.
Managing an Alliance or Partnering Contract uses many of the same skills, but goes on for years. No wonder burn-out rates are high. Fortunately for us, Tony Lendrum’s 0-10 Relationship Management system of tools, techniques and frameworks makes this difficult task manageable. Tony has been developing the system for over 20 years, and is showing no sign of burn-out yet.
He hasn’t started to smell either.
Check out Tony’s stuff at 0to10rm.com
Happy New Year.
Jock Macneish
