How Crystal Clarity on Your Risk Perspectives Creates a Positive Risk Culture
Carl Pritchard, PMP, PMI-RMP
Do you know me? I get asked that question a lot. I've had thousands of students through the years, and invariably one will walk up to me and say those fateful words -- "You don't remember me, do you?" It's a very challenging thing to deal with. But it goes to a critical concept. Out of the thousands of students, some are indeed, memorable. Some, the moment I see them, I recognize them, remember their name, hometown and where we had our first encounter. That's the exception, rather than the rule.
The simple truth is that some people rest more clearly in our minds than others. There's a reason for that. It's not just that they were characters. It's also that we were clear on who they were, and so were they. They are memorable for their degree of clarity.
I'm currently working on a course for ProjectConnections and for a summer cruise training I'm doing. It's called Risk Management Excellence, and it focuses on the ten traits of truly excellent, effective risk managers. The first and most critical trait, before you can begin addressing specific risks themselves, is clarity.
We have all heard the complaint that the occasional politician is "off-message," or we've had bosses that we simply didn't understand. We have had moments where as parents (or as children), the logic behind our family's actions was completely lost. My youngest son James was the best at pushing back in such moments. One classic example came when he was only four years old and in preschool. For the Thanksgiving pageant, students had the choice of wearing a Native American headdress or a Pilgrim hat. He chose neither. When the teachers told him he needed to pick one or the other, he asked "why?" Their answers regarding the need for conformity were again met with the same reply: "Why?" There was no core value driving them to push for the hat. There was no philosophical rationale. They really couldn't explain why. And the battle was lost. He was the only bare-headed child in the pageant.
Some 16 years later, I believe I know my son well enough now to know that when he's in a negotiation, if the other party knows their position, knows what they're willing to accept and not accept, and can clearly state it, he'll go along. It applies in every facet of life, but especially in risk and risk management.
Know thyself.
To thine own self be true.
Those axioms have stood the test of time. And the reason? They represent clarity. It's the tool that enables us to lead, to plan, and to take others along for the journey in risk management.
We've all known risk-takers in our lives. These are the people willing to take on risks that fill us with fear. They seem to do so with aplomb. One gentleman I used to work with (call him Jason) actually risked the entire organization's library of intellectual property on the possibility of winning the biggest client in that organization's history. Everyone looked at Jason like he was a nut, but from his perspective, it was a risk worth taking. Because of the clarity of his vision, he was able to convince management (including Legal) that it was a sound idea.
Jason was clear. His career was on the line. He knew the implications. Everyone knew he knew the implications. But he also recognized that this could be the single biggest payoff of his career. It was not just his concept that carried the day. It was also his steadfast willingness to accept the risk and remain unwavering in that acceptance.
The question we must ask ourselves is whether we would rather be the person riding the wave of events around us, or whether we have the clarity to steer ourselves toward the outcomes we want. To test whether or not we have risk clarity, we can put ourselves in basic business situations. Would you risk your highest-performing team member in order to preserve the rest of the team? (The ultimate treatise on that premise can be found in the book, The Five Dysfunctions of a Team, by Patrick Lencioni). In order to manage teams well, we have to take certain conflict-related, personality-driven risks, and they represent a tidal wave of possible situations. Only those individuals with clarity about what they can and cannot stand can weather the storms.
Ask yourself about driving. Ask about almost anything! How fast am I willing to go? How much [delay, overrun, crap, etc.] am I willing to put up with? The answers to those questions represent our personal tolerances and thresholds and put us in a position of potential leadership on risk. If we know our limits and can express them succinctly and clearly, we are far more likely to get others to accept our tolerances as the default tolerances for our projects and our teams.
Personal clarity on risk creates a personal risk culture. If we know what constitutes a risk and what constitutes a "risk too far" in our minds, and if we can stay consistent with that perspective, others will follow suit. Most organizations have little or no clear risk culture. They cannot express it. They cannot tell others what they will and will not stomach. In many cases, it is because they do not know.
You can.
You can drive a stake into the ground and say It goes this far, and no further. But that's only something we can say if we mean it. Allowing others to step past the line creates an environment where there is no clarity on risk. Blurred lines aren't lines at all.
Achieving clarity starts with knowing thyself. It's not about planning out every possible permutation of every situation. It's a matter of defining your personal defining principles. What matters most? What doesn't matter at all? And then ask yourself the question about how far you're willing to go to defend those principles. Willing to lose your job? Willing to break alliances organizationally?
Jason knew he would either make himself CEO material or drift into oblivion. He knew the executive suite was where he wanted to be. He had clarity on the risks he was willing to take to get there. And when others, including Legal, tried to get him to stray off message, he wouldn't be persuaded. Instead, he stood fast and made it crystal clear. This was a risk worth taking.
Deriving clarity is no mean feat. It's rarely accomplished on the first draft. Rather than saying, "I'll take no risks that will cost in excess of $28,000," we need to know what about the $28,000 figure makes it our pain point. Is it because it will cause escalation to a higher level of management? Is it because it would cause a change in our status as employees? Is it because it would gain the attention of the client? Those make for much clearer and more readily consistent messages to our management and our team.
I will never take risks that will cause escalation to the executive suite.
I will never take risks that will gain client attention.
While these are more generic statements and less specific, they go to the root of why we behave the way we behave. They afford clarity on our risk tolerances to others. They take a critical first step toward clarifying why we act the way we act, and react the way we react.
Many risk managers use the "Five Whys" (a series of "why" questions repeated five times) to derive root causes of risks. We can also use the Five Whys to help build clarity on why our tolerances are our tolerances. If we can clearly state why we take (or don't take) particular risks, and can do so consistently and succinctly, our mission toward clarity has taken a vital first step.
"Clarity" is one of the 10 core elements of Risk Management Excellence, Carl Pritchard's new presentation, book, webinar and article series being released over the next year. For more information, contact Carl at carl@carlpritchard.com.