John WilkinsKnowledge ManagementLeadership
September 26, 2016

A Duty of Care: Risk Management

The world is fraught with uncertainty and risk, making life difficult and worthwhile. What, for example, are the chances of getting hit by a bus? The odds are estimated to be one in 500,000 very low indeed, catastrophic for the one, slightly worse than 1:700,000 of being struck by lightning, but scary compared with 1:11,500,000 of a shark attack.

In business management, the “bus factor” is a measure of team capacity. It connotes the number of team members that can be lost unexpectedly before a project collapses. Projects that share knowledge are more resilient. The bus factor can be increased by reducing complexity, documenting current process, and encouraging cross-training.

Taking Risks

Political pundits might say that public figures are more likely to get thrown under the bus than hit by it. Good relations get severed when things become controversial or unpopular. Central oversight bodies claw back the flexibility and capacity to manage risk when trust is lost. Human error is often blamed.

In 1986, after five weather delays, the space shuttle Challenger launched heavenward. Just 73 seconds later, system failure tore the shuttle apart, and all seven crewmembers perished. The disaster was attributed to an O-ring seal known to have vulnerabilities. The fatal mistake was ignoring vital precautions in the rush toward a grand goal.

Ministers are preoccupied with political risks. Few public servants are able to put themselves in a minister’s shoes to fully appreciate what is concerning or how to respond. The default is to flag high-priority issues and to proffer platitudes as strategic advice.

Most middle managers encounter crisis. How they handle it is a function of competence and nimble thinking. Meanwhile, the public service is painted at once as overly ambitious, cautious, rash, and risk averse. Taking risks is almost always about weighing the return on initiative against the fear of failure.

In 2009, a passenger plane made an emergency landing in New York’s icy Hudson River. Captain Chesley Sullenberger (watch out for the movie soon to be released!), who landed the plane safely with no casualties, said later about his life-or-death decision: “… for 42 years I’ve been making small, regular deposits in this bank of experience, education, and training. And on that day the balance was sufficient so that I could make a very large withdrawal.”

Managing risk

The long view is to mitigate the potency of uncertainty by managing the realities of risk. Middle managers must collaborate to pinpoint, assess, and control risks. Sometimes they get so engrossed in day-to-day operations that they forget critical preventative and contingent activities.

Managers can avoid or minimize risk in six ways:

1. Grow replacements. Managers cannot be promoted with assurance until replaced by someone who can do the job. Top management cannot let succession planning languish, or the fate of the organization hangs in the balance. Star performers need recognition and development.

2. Anticipate problems. Most problems simmer on the back burner before boiling over. Managers need to scan the horizon and their instruments to ensure that they do not get slammed by potential problems. They also need to be ready for unavoidable problems.

3. Exploit opportunities. Most managers know what is wrong, but they become oblivious to opportunities waiting to be seized. More than positive or negative thinking, they need to focus altogether on the good and bad and on the opportunistic and problematic.

4. Pre-empt changes. Sustainable results depend upon adapting quickly in response to changes in citizen needs and the public interest. Changing just to keep up means losing the comparative advantage of changing sooner. Waiting until the last moment rarely leaves room to maneuver.

5. Stay relevant. Relevancy is about being current and closely connected to colleagues, citizens, and stakeholders. Managers are deemed relevant when others they lead or serve believe their work matters to achieving results. They show they care in word and deed.

6. Take care. Some managers neglect self-care as selfish. Modelling expectations, giving support, and leading the way require managers at the top of their gamementally, emotionally, physically. Burnt-out leaders burn out followers when truly important things are not done consistently well.

When storms brew, sometimes the best we can do is plan for the worst and hope for the best. Rainbows after a storm are said to be signs of divine providence. Protective care assures prudent preparation and timely deliverance. Managing the consequences, outcomes, and impact of risk requires commitment. Infusing institutions with a passion for public service is a duty of care.

John Wilkins is Executive in Residence: Public Management at York University. jwilkins@schulich.yorku.ca. He was a career public servant and diplomat.

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John Wilkins

John Wilkins is Executive in Residence: Public Management at York University. He was a career public servant and diplomat. (jwilkins@schulich.yorku.ca)

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