Complex Risk Contexts-Pt1

/ July 6th, 2010/ Posted in How to do Risk Assessment / No Comments »

In a previous post Common Mistakes in the Risk Context Statement I described one of the situations most often encountered when trying to establish context — the lack of coherent planning. If the working team does not have plans or (what is perhaps more common) confuses planning terms, it is really impossible to set up the context and identify risk in a meaningful way.

I think we have all been there: where we tend to state department or business goals in vague or undefined terms that sound good on the surface, but are not verifiable or tangible. I could say, the company aims to achieve “best-in-class service”, or the “highest degree of professionalism” or “impeccable accountability”, but these, at best, are part of a vision statement, and do not constitute goals, in the sense of a tangible deliverables.

Risk context can present a whole variety of challenges that need to be recognized and solved. I believe the reason many joint projects fail, or let’s say, the reason many risk ID sessions with the slightest degree of complexity go around in circles, is because the facilitator does not recognize traps. I’ve seen many meetings begin with tons of goodwill, but participants disperse in a despondent mood because they were not able to establish common ground.

It all has to do with setting the risk context properly. And rarely does the context consist of a single set of ordered goals and objectives, conceived with crystal clarity. I made notes on what I call complex contexts, and created a diagram and a solution for each one – I’ve probably hit on typical situations that others might find useful.

The first situation is the one described above. Is there a planning regime? Are departments required to set out business goals, with some kind of performance management, that are aligned with corporate strategy? Is there a commonly understood and applied planning language? If so, you are miles ahead, because risk management cannot substitute for good planning.

The other complex risk contexts have to do with multiple risk assessments in the field (technical, social or health care); selecting the best of many possible solutions (e.g., short-listed IT applications); or reconciling two diametrically opposed parties in a common project. In the next post, I will discuss them in more detail, along with a pdf summary of the complex context models.

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