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Selling the benefits of Risk Management

Governance Institute of Australia hosts an quarterly Risk management discussion group. I attended on the 24th May and thoroughly enjoyed this excellent and robust discussion.

Joel Miller expertly facilitated the discussion: Principle 1 of the risk management principles ISO3100 states

“Risk Management should create & protect value”.

  • To get something of value, you need to take risk otherwise, everyone would have it already.

  • Value is adding & not taking away.

It needs to be acknowledged that everyone is managing risk all the time (in the workplace & in life) so let’s formalise it & understand the framework to do it efficiently.

How do we demonstrate benefits?

Take the example of the London Olympics, where the project team in the planning phase assessed the risk of building for the games in the London area (which would obviously involve digging), they listed & assessed the types of items they may find, assessed cost if the risk eventuated, vs cost to treat vs likelihood, noting that the target date was not negotiable so a negative impact to schedule was not acceptable.

They decided to treat the risk and engaged Scotland yard and London museum & paid for representatives from both to be located on site throughout the dig phases.

When they did find unexploded bombs including one of 2,000 pound, Scotland yard were on hand to dig, defuse & dispose quickly.

When they did find more than 10,000 artefacts, & revealed evidence of at least 6,000 years of human activity. The London museum were on hand to excavate and present to the museum.

Through proactive risk management the Olympics didn’t only remain on schedule they completed ahead of schedule & under budget (by £476M).

Strategies to sell the benefits of risk management:

Ask people to tell you about their business, tell their story, then ask what could impact on their ability to do their job, ask what keeps them awake at night:

  • Something which scares you

  • Something that you’re excited about

Create the culture, it's everyone's job so lets make it easy; drop the jargon and start talking about it. https://www.governanceinstitute.com.au