Risk Mitigation vs. Risk Eradication

At the CWS Asia Pacific conference in Singapore in July, I gave a talk on how to disaster-proof your program. As part of the presentation, I spent a short time on approaches to risk categorization, risk analysis and risk treatment. I was keen during that short time to convey the need for appropriate responses based on the type of risk.

As contingent workforce professionals, and especially as program owners, we often talk about trying to eradicate or eliminate risk. In doing so we sometimes fail to stop and consider if elimination of the risk is necessary or a good use of our organisation’s time and money.

I speak from experience.

On both the supplier and the buyer side, I have participated in a number of initiatives where we were tasked with eliminating risk — often at great cost to the company. In those situations, I have seen the risk rating that came out of the risk analysis (likelihood, impact, etc.)  and the response to the risk depart very quickly; the risk rating called for mitigation but leadership and our own preference to avoid risk lead to attempted elimination. In a particularly powerful example, we made matters worse: the team was packed with perfectionists, so we spent time making sure our approach was as near to perfect as we could get it. The amount of time (and money) spent was easily double what it should have been.

In hindsight, I made two fundamental errors in that example: 1) I did not sufficiently challenge leaders on their desire to spend time and money eliminating a risk that analysis showed did not require elimination; 2) I enabled a team that erred towards overengineering responses to risk by not counselling them to avoid wasting their energy on the task.

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As a result, I impacted my day-to-day operations chasing a risk that didn’t need chasing with a team of perfectionists that could have been more effectively tasked with working on process optimisation or designing responses for risks with a higher impact/probability score.

I learned my lesson.

I now know to do two things straight away: 1) ensure a proper analysis is performed that shows empirically if the risk requires elimination and 2) speak to leaders to assuage their concerns using that data.

We deal with a lot of risk in our day-to-day roles. It is time we got comfortable with it.

If we have the right leaders and a good rapport with those leaders we can, using data and compelling arguments, show how risk elimination can be a waste of time and money and how risk mitigation can be a much better approach. An approach that retains an emphasis on control whilst retaining a sense of balance.

We can all agree ignoring a risk is like buying a ticket to a lottery where the top prize is you losing your job but trying to eliminate all risk is just as dangerous and will see your programme moribund, unimaginative and unwieldy.

So in short: balance in all things*, even scary things like risk.

*Except for ice cream.

MORE: Want program adoption? For regional stakeholders, don’t just cut and paste the US one

Graeme Robertson
Graeme Robertson is a senior associate at Brightfield Strategies, a human capital strategies consultancy and data services provider.

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