Nowaday risk management is getting more and more credits.
I don’t know if this trend is dictated by the increased number of unknowns the crisis is showing us, by an increasing management perception, or by something else.
What I clearly see are the frequent mentions it gets.
It is not my aim here, in a short article, to explain what the risk management is.
What I would like to do is taking you to the grey area of the parallelisms between Risk Management and Problem Solving, two methodologies which we have been told are different. Are they?
Risk Management is done during the planning phase of different activities to prevent some possible risks and prepare a response in advance for the remaining ones.
Problem solving is done at the post-execution phase, when something didn’t happen as wished or as planned, and we need to fix it up.
Apparently Risk Management and Problem Solving do not touch each other within their lifespan, the first belongs to planning and the second to post-execution.
Nevertheless they overlap completely, both in the meaning of their methodological steps and in their application. Does this look unreal to you? Here we go….
Let’s start from the strong overlaps they show:
They are both based on current or future evidences which something is wrong.
They both need to analyse the causal chain to understand what lead to undesired outputs.
They both take advantage of hypotesis and real data taken out from similar situations.
They both use past experiences to better drive future decisions.
They both face the need to simplify complex scenarios by cherry picking the vital-few, discarding the trivial-many.
They both…. are the same thing!
Should I have not yet been able to convince you, then let’s see if the following provocation can last or not.
In Risk Management hypotesis are made on things which are not yet happened, by starting from things which already happened, while in Problem Solving those things already happened are the base to avoid issues on things not yet happened.
Well, this look more to a different way to say the same thing, isn’t it?
We are saying that Problem Solving made on a past event is also Risk Management on a future (similar) event.
In Risk Management we choose risks to manage based on their probability and impact. In Problem Solving we choose causes to manage based on their contribution to the Problem’s Gap.
Well, also here it looks we are looking for those vital-few the same way, approaching both from a Pareto’s law standpoint. Tools may be different, but the meaning is the same.
In Risk Management we early implement responses to reduce or eliminate consequences of the most probable and impactful risks, while in Problem Solving we choose the most significant causes to implement dedicated Countermeasures.
Practically the same thing, huh?
Let’s take a look to “Google Images” search results for both “Problem Solving” and “Risk Management” and enjoy how many occurrences are in which they look the same, based as they are on the Deming cycle or its evolutions.
Am I going to convince you, now?
Good, BUT, if I’m still struggling in enticing you into this way of looking at them, how can I articulate more this? I may ask you to move away from the undesired event by getting closer to Risk Management or Problem Solving activities so you can have a different perspective of what is surrounding you, like the following picture?
Otherwise I may additionally point out that the research for future risks is based on experiences of problems already seen in the past
It Looks so obvious written in this way, infact how could I decide about probability and impact of something which is never happened in the past, if not through experieces (direct or indirect is meaningless here).
However there is another way to look at this, let’s check what a couple of famous quotes have to say about that.
Warren Buffett said that:
“Risk comes from not knowing what you are doing”,
while Albert Einstein, about problems, said that:
“if you can’t explain it simply, you don’t understand it well enough”.
These are two more examples of Risks and Problems being defined the same way and requiring both a good analysis session.
Who can say now if the mouse with helmet in the first picture had a Problem Solving or a Risk Management done?
I still don’t know if what I’m writing down in here is still not taking you with me. Nevertheless let’s share this within your network so we can check what the others thinks about. And even more, let’s ask ourselves if is worth to start from Problem Solving or from Risk Management.
I do believe starting from an applied problem solving approach is much better as it is based on real things which already happened, providing us with more real evidences at a point in which the risk (!) of working only on hypotesis is lowered down.
Alternatively, the more we accept to live with problems (!) the more we will risk (!), as Dan Glickman said in the following quote: “Where there is a problem, the risks are greater than they’ve ever been before.”