Risk management isn’t pessimistic

19th April 2022

Envisaging the worst:

 

Risk management isn’t pessimistic

 

As anyone involved with any kind of change or delivery management will tell you, gaining a clear understanding of risks and developing an approach to manage risk is key. On large, risky, transformational initiatives this might be a very rigorous and formal process, on smaller routine initiatives it might be less formal, but it is important nevertheless. However, a challenge that is sometimes faced is an assumption that even speaking about negative events that might occur is somehow ‘pessimistic’, and to plan what action would be taken if they occurred is deemed completely fatalistic!

Perhaps you have come across this perspective in projects that you have worked on. There is an aggressive, unachievable deadline set that everyone knows won’t be met. When somebody speaks up and asks “what is Plan B” a bombastic leader decrees “there is no plan B… you just need to do everything you can to deliver! If we gave you a Plan B you’d give up on Plan A!”.

At this point some eyebrows are raised, and everyone retreats back to their work, absolutely knowing that Plan A will fail. Yet since a colleague had been publicly admonished for stating concerns, similar concerns won’t be raised. We end up (metaphorically) with a car heading straight for a wall, and nobody wants to discuss hitting the breaks…

 

Planning for the worst doesn’t mean you expect it to happen…

We need to get over the macho bravado that is endemic in some corporate cultures and change programmes. The assumption that if we just ignore the risks they will go away, and if we dare speak about them then everyone will panic and the initiative will fold.  Of course, there is a balance to be struck, but simply blindly ignoring risk entirely is unlikely to lead to successful outcomes.

Let’s take an example from a very different context. If you travel in a car, you know that the car has brakes, a seatbelt, airbags and perhaps even sensors or other collision-avoidance measures.  How often have you had to use the airbags in your car? I hope that the answer is precisely zero, or at least very close to zero!  Yet, you probably wouldn’t buy a car without them. How often have you planned to use them? I’d imagine the answer is precisely zero times.. But again, you are probably glad that they are there.

The point here is that by thinking about the things that could go wrong, however unlikely they are, practical countermeasures can be taken. Airbags protect against (hopefully) unlikely, but potentially very severe events. Similar events could occur in the delivery of change, isn’t it best to minimise their likelihood, or at least have a proportionate and appropriate response ready if they do occur?

 

Envisage risk but don’t get too fatalistic

A key here, as in so many contexts, is pragmatism.  Much as artificial and unrealistic optimism can be harmful to a change endeavour, so can a sense of pedantic pessimism. We’ve probably all worked with someone who relishes in pulling everything apart. This is a useful skill to have, but not when it is overplayed.

In her article ‘Practising Practical Optimism’, Christina Lovelock highlights the benefits of a middle-ground, avoiding blind optimism, but also ensuring that the best possible outcome is envisaged and action is taken to maximise the possibility of that happening.  This is perhaps a complementary viewpoint to the ideas I am putting forward here.   It should always be remembered, of course, that a holistic risk management approach should focus on maximising positive events as well as minimising negative ones.

The key, as always, is balance.

 

by Adrian Reed, Business Analysis Expert