Marc on Risk Management

Brad, did we get you fired up today?  You're throwing haymakers right out of the gate.  Before you crucify those who are concerned for your safety, at least give them some credit for having good intentions… and then light em' up!

I agree with you on the main stream media, though.  "Mount Everest Mountaineering Team Assesses Risk and Forgoes Summit Attempt" is not a headline that you'll ever see anywhere, except maybe one of those 115 adventure blogs that you subscribe to.  But since you brought it up…

People who become famous for accomplishing crazy feats, IN GENERAL, get there by taking incredible risks.  Adventurists, thrill seekers, or whatever you want to call them, accept a lot higher levels of risk than the average human being.  Climbing Mount Everest, for example, even with the highest level of preparation and planning, is a greater risk than most people are willing to accept.  

So how much risk is too much risk?  Well, there in lies the key to risk management: weighing benefit vs. risk.  Everything is life has risk, so you can't avoid risk altogether.  There are many complicated, entrenched methods for evaluating risk, such as Lean Six Sigma, Operational Risk Management (Navy), or Plan Do Check Act (PDCA) but the basic questions that must be answered are, "Is it worth it?" and "What can I do to mitigate the risk?"  

I think the four principles of Operational Risk Management say it best:

1) Accept risk when benefit outweighs the cost

2) Accept no unnecessary risk

3) Anticipate and manage risk by planning

4) Make risk decisions at the right level

When I taught Operational Risk Management in Navy leadership school I would use an example from my flying days.  The EP-3E is an old airframe, and it wasn't all that unusual to lose an engine.  It's a four-prop plane so you still have three engines, but things get a little more risky at that point.  So peace time operations called for us to abort our mission and return to base due to the increased risk.  However, during the Kosovo bombing campaign, when we were flying to provide indications and warning support (intel support) to the strike aircraft that were dropping bombs on the Serbs, things changed.  When we lost an engine (increased risk) we stayed on station.  The benefit of us staying there to provide that support outweighed the additional risk associated with us flying on only three engines.  

"Damn the torpedoes!  Full speed ahead!"  - Admiral David Glasgow Farragut at the Battle of Mobile Bay

Unfortunately, Brad, there will always be people who don't want to accept ANY risk.  The way to handle those people is to explain the benefit, and what you are doing to mitigate the associated risk (if possible).  I've found that explaining all the other things that are MORE risky than what you're doing doesn't usually work.

Ed and I had a conversation on the phone today about when risk management becomes obstructive or restrictive to operations.  That certainly can happen, but it doesn't have to do that.  The Navy's tool, Operational Risk Management, uses three levels to fit the situation: in-depth, deliberate, and time critical.  The key is to choose the right level based on the time given to make a decision.  Forcing an in-depth risk management process onto a time-critical decision is what will cripple a business (or a military force).  Perhaps the larger issue here is planning.  Risk management should be a part of the planning process, but not so much that it inhibits it.  I'll end with one of my favorite military quotes:

"A good plan, violently executed now, is better than a perfect plan next week."  - General George S. Patton