Consistently implement the right decisions in context
Over two decades we have consistently advocated an approach which puts decision making in the hands of the people who have to make decisions, not just the people at the top of the hierarchy. A simple analogy is traffic – individual drivers make decisions as they drive which in turn affect other drivers. Smart traffic engineers enable the traffic lights to respond to demand (read article here). Another point noted in the article was that it was policy and bureaucracy that prevented this simple, elegant solution to traffic congestion being implemented. The traffic system became self-organizing when the accepted wisdom was (and to some extent still is) to ‘control’ traffic.
So, in order to implement a system (let’s describe is as a ‘Human Activity System’ just to make the point clearer), we need to equip people in the system to make the ‘right’ decisions, decisions which right in context. And that includes the ‘policy and bureaucracy’ elements of the organisation. This is how you can develop your capability to operate at the highest level of our Risk Maturity Model. (Need to add a link here)
Risk management policy and methods explicitly recognise that many risks are complex, interconnected, intangible and emergent. Silos of risk thinking and action are reduced through a focus on higher-purpose and the need to seek “best possible outcomes” rather than to achieve targets. Traditional risk management methods are enhanced with complexity-capable methods for risk inquiry, analysis and response. Risk conversations are broader, often combining all factors that matter not just threats.
The management culture both accepts and demands that decision makers do more than focus on “big risks”. The capability to deal with emergent risks is part of senior leaders’ conversations.
A systemic approach to risk management is centred on ensuring quality of decision making in a complex (and uncertain) world. The aim is to find the best way(s) forward in the face of all factors that matter whether risks, issues, opportunities or otherwise.
A separate, distinct risk management system exists only as a set of policy, guidance and tools for decision makers. Leaders and staff have considerable freedom to apply judgement to exactly how key uncertainties are recorded and reported.
Performance is judged on the quality of inquiry and analysis leading to decisions, with outcomes and outputs used as indicators rather than as determinants. Complex systems design plays a major role in the work of senior leaders.
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