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Making Implicit Risks Explicit

Tool: A quick group risk analysis exercise to measure your risk management processes

BP’s analysis of the Gulf oil spill points a lot of fingers, but none of those fingers point at an absence of risk management. The problem was poor risk management. We may not face risks on the order of those in the offshore industry, but our processes can be just as flawed, especially when they become too heavy.

We often make risk management more complicated than it needs to be – which constitutes a risk in itself. Process bogs us down instead of enabling us. One problem this can cause is varying perceptions of risk. This quick exercise helps make risks we see individually visible collectively, allowing them to be managed effectively instead of piecemeal.

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“Making Implicit Risks Explicit”

Task: Individually identify and collectively discuss risks

Purpose: Make implicit risks explicit

Resources: 20 minutes, pen, paper.

1. Take 10 minutes to individually write down all the risks you see, first from the perspective of your specialty and then overall. Do this separately without speaking to each other.

2. Show the rest of the team what you have written.

3. Take 10 minutes to discuss what you have written. What risks are new to the others? Which risks did everyone see? Are any of the risks important enough to cause a change in your plans? Which ones need to be monitored? 

Results

If there are no discrepancies between your lists – i.e. if everyone agrees, you may need to ask yourself what you are missing

If there are several discrepancies between your lists, but not many, you are probably on the right track. It is inevitable that people will see things differently – and beneficial because you are drawing on different perspectives.

If there are many discrepancies between your lists, you need to look carefully at your processes for managing risk.

Note: Keep an eye on the clock and remember that this is an introductory exercise. Note down and discuss separately anything that will take longer than the 10 minutes you have assigned. If you’re not careful, the exercise can take for much longer than the 20 minutes.

1 comment to Making Implicit Risks Explicit

  • Thank you again for prompting the discussion. I am interested in learning about similar tools or instances in which a “perfect” risk management has met a black swan situation. I understand that the tool that you propose seeks to address implicit knowledge/views on risk within the group (and solving communication gaps), rather than provoking a brainstorming on risks.

    I have sometimes achieved a similar outcome by discussing within a group the views on risk based on a Boston matrix for risks(i.e. with a discussion on likelihood/impact of different risks and whether we have omitted identifying any risks).

    Kind regards,

    Gastón Bilder
    International Legal Counsel
    Visit http://www.derechoyrse.blogspot.com
    Join http://groups.google.com/group/dcorporativo

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