A Linked-in poll was made in November 2012 and ran for four weeks. The poll was made to study the current understanding and use of risk terminology.  This insight describes how the poll was made, the results and offers some suggestions to help identify risks using jargon free language.

The screen shot below shows the poll results to the question: “A test for risk managers. My goal is to hang a picture. I need to hammer a nail in the wall. What is my risk source?”

 

 

 

How the poll was made

The poll was placed on Linked-in where the respondents could vote and/or leave a comment.  We received 240 votes and 380 comments. In a surprising turn of events, the comments string was hijacked by a group of bloggers who chatted on private matters between themselves. They made 350 off topic comments, so we had a remainder 30 valid comments to work with.

To publicise the poll invitations were placed in several Linked-in groups.   These invitations developed into independent comment strings running within the groups:

  • Global Risk Management Group (13 comments)
  • Risks Analysis and Claims Management (8 comments)
  • EPC Constultant Professionals (52 comments)
  • Risk Management Online (38 comments)

Most of the comment made in the group discussion pages where on-topic.

A correct answer.

The question gave the objective which was to “hang the picture”. So what is that risk source? One of the respondents accused us of “playing with words”. He was accurate because the question does not give enough information for one single risk source to be identified. The hammer, nail and thumb were introduced to invite discussion. The correct answer is “everything is a risk source” which is a pretty useless nugget of information because the risk sources could range from hammering a nail into a water pipe, to the house being struck by lightning.

Only four of the respondents gave the correct answer. Most respondents bravely tried to unpick the question and gave different answers, without fully understanding that the risk source can only be present when the picture is being hung.

All comment can be read on linked-in and transcripts can be sent on request, but this survey shows how a simple question, if not properly framed can give so many different answers.

In the real world, in real risk registers it is very common to see risks shoddily described because the risk manager has not framed the answer correctly..  Risk registers which are stuffed with a confusing mix of issues, risks, consequences and events are completely irrelevant and no-one will respond to them. Little wonder that risk management is sometimes not taken seriously. This is confirmed by some of the comments received back on the poll which were very negative to our profession. The key to successfully identifying risks is to ask the right people sensible questions within certain boundaries. Risk management is all about common sense so let’s look again at the question sensibly

How to construct a better question and answer

Firstly: Why are we talking about hanging a picture? If it is worth $20 then hanging the picture is a day-to-day task which should not even be discussed, however if we are hanging a $267 Million original “picture” by Paul Cézanne in a shopping mall using untrained staff – then we are talking risks.

Secondly: If the objective is to hang a picture, then we are not interested in the sources of risk transporting the picture to site or even what to do if the picture falls off the wall. The risk sources are only relevant while the picture is being hung.

Thirdly, to correctly identify risks and describe what is happening we need to dip into risk jargon such as “risk sources, events and consequences”.  Unfortunately these are sometimes defined differently in risk literature and in language that only risk managers can understand.  It is far better to choose internationally recognised definitions and write them in plain English which everyone can understand.  We use ISO 31000 jargon which can be re-written as follows:

 

Fourthly: Choose a risk source which has the maximum relevance to the objective.  In our example employing untrained staff is far more important than the dollar value of the picture because our objective is to hang the picture, irrespective of its value.

A better question and answer using our example.

Our objective is to hang a $267 Million original by Paul Cézanne in a shopping mall, but due to no experienced staff being available (risk source), there is the likelihood that local untrained contractors will be used (event), which would result in:

  • Delays in hanging the picture (consequence)
  • Damage to the picture, the fabric of the shopping mall or both (consequence).
  • Injury to contractor’s personnel, Mall employees, the general public or all (consequence).

Notice that the chance of the consequences happening or which impact they would have on the company responsible for hanging the picture have not been discussed.  That comes later.

Summary.

The poll results confirm our experience that there is huge potential for devaluing risk management if the basics of risk identification are not properly understood.  The example above is very simple, but in real projects the risk manager is often under pressure to include hundreds of risks and issues into the risk register.  If the day-to-day tasks are not separated out from the risks at the very beginning, then there is a very real danger of “garbage in – gospel out” and eventually the risk management process becomes irrelevant.

Venture Risk Ltd. keeps risk management simple, fresh and relevant to help project managers make informed decisions and their projects failure proof.  Use the contact form below for more information.