Risk Leadership: A review by Felix Kloman of a new book by David Hancock

Felix Kloman is one of the most respected gurus of risk management, someone whose views always merit thoughtful consideration. He recently sent a group of us this review and graciously agreed to let me share it with you, here.

Dave Hancock’s ideas are stimulating and I hope you will share your comments after reading Felix’s summary of the highlights.

Felix’s Review

Last October I submitted to a whim and bought a new UK book, simply on the strength of its title: Tame, Messy and Wicked Risk Leadership (Gower, Farnham 2010) by David Hancock, the Head of Project Risk of London Underground and a visiting Fellow at Cranfield University.

Now admit to me, that title is intriguing! So I opened its 88 pages and thought, a “walk-through.”  Unfortunately, other, better-written tomes intervened and I’ve only now finished it.

Hancock starts by re-defining risks as four types: (1) tame – “straight-forward, simple, linear causal relationships” that can be “solved” by analytical methods; (2) messes: with “high levels of system complexity”; (3) wicked problems:  ”with high levels of behavioral complexity”; and (4) wicked messes: in which “behavioral and dynamic complexity coexist and interact. While I like these titles better that the ones we’ve been using, I really wonder: are not all risks “wicked messes?” Do we over-simplify too many situations?

But after trudging through these redefinitions, Hancock does come up with a few zingers:

• “Behavioral and societal aspects of risk are under-represented in risk management processes.”  True!
• “Risk management, constructed in accordance with the rules of probability, can give the illusion of control and understanding when in fact there is only further confusion.”  We think we know what we are doing!
• “The general perception among project and risk managers that we can somehow control the future is, in my opinion, one of the most ill-conceived in risk management.”   Agree!
• “Risk in our world is nothing more than uncertainty about the decisions that other human beings are going to make and how we can best respond to those decisions.”
• ” . . . remember that risk can be considered our friend (opportunity), not just our adversary.”  We must always consider the plus side.
• ” . . . risk (is) an illusory concept that exists in the consciousness of individuals developing a solution.” It is inherently a human perception.

It is Hancock’s summary on page 88 that makes this book worthwhile. He suggests a new title — Risk Leadership — inasmuch as we cannot “manage” risk, with the following characteristics (all direct quotes):

1. Recognizes the possibility of different outcomes and tries to ensure that risk activities are directed towards making an acceptable set of outcomes more likely.
2. Uses concepts and images which focus on social interaction among people, understanding the flux of events and human interaction, and the framing of projects within an array of social agenda, practices, stakeholder relations, politics and power.
3. Develops behaviours (sic!) and confidence in teams through scenario planning and team-building to identify and respond to risks and opportunities. (my italics)
4. Understand the ‘many acceptable futures’ proposition and manages risk to produce the changes needed to achieve acceptable outcomes.
5. Practitioners as reflective listeners (great point!). Learning and development facilitate the development of reflective practitioners who can learn, operate and adapt effectively in complex project environments, through experience, intuition and the pragmatic application of theory in practice.
6. Applies concepts and frameworks which focus on risk management as value creation, whilst aware that ‘value’ and ‘benefit’ will have multiple meanings linked to different purposes for the organization, project and individual.
7. Adapts the risk process to overcome major political, bureaucratic and resource barriers to develop change in behaviours (sic again!) through trust and managing expectations.
8. Based on the development of new risk models and theories that recognize and take cognizance (sic) of the complexity of projects and project management at all levels and that the model is only part of the complex terrain.
9. Has learned to live with chaos, complexity and uncertainty, and leads through example to a successful conclusion.

Isn’t this the beginning of a restatement of the [risk management] discipline? We can certainly simplify and abbreviate these nine points, but I see some new ideas at last. And “risk leadership” is a positive approach in contrast to the heavy burden of negativism that weighs down our discipline these days!

What do you think?

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