Much of my professional life has been spent dealing with the discipline of risk management so I am likely to do more than one article on this subject.
The basics
Risk management is a basic life skill. We “do it” all the time without necessarily realising this, e.g. whenever we decide to cross the road a conscious or sub-conscious decision is made on whether to do a dash across the road where we are or walk up to the nearest pedestrian crossing – very simple but contains all the elements of risk management.
However risk management is not an “instinctive (genetically implanted) trait – it is a learned skill.
People of my generation learned the skill very early in childhood because we were allowed to roam free by our parents – we got into all manner of scrapes, many of which resulted in minor physical harm and no doubt there were some life threatening situations involved. But the learnings stuck because they were vivid and learned at such an early age, and we all survived!
These days children tend to be wrapped in cotton wool – although it is true there are dangers out there now that weren’t there when I was younger – and this denies them the chance to learn from experience. Being told about risk management is unfortunately not even half as effective.
There is now quite a reaction against this by many parents and some schools and I think that this is a good thing.
Lack of exposure to actual risk can lead to several problems:
- people become personally oblivious to many types of risk e.g. I continue to be amazed by the number of people who walk down busy streets with headphones glued to their ears, and pedestrians continue to have a penchant to be run over by slow moving buses.
- When risk “hits”, the reactions can be quite disastrous because it comes with no prior experience. In essence the mirage of 100% safety is dashed into pieces. One of the important life lessons is that adverse consequences happen and can be managed
- Many people struggle to realistically translate the basics of risk management to organisational or business situations.
I will talk more about the business implications in another article, but my opening observation is that although risk management is recognised as an important business tool, it is too often implemented superficially and ineffectively. It is not uncommon for businesses in disaster situations to resort to the defence of “but we did have a risk management plan” without realising what they are owning up to. Risk management is too often characterized by the use of experts to run the process and the use of complex spreadsheets and other tools. My first piece of advice is to chuck the spreadsheets in the bin and spend the saved time looking at and understanding the real risks facing the organization or business and their treatment.
The impact of the new health and safety legislation
Ignoring or not properly managing business risks can have both financial and human consequences. The worst recent example of human consequences is the Pike River mine disaster. This has led to a number of reactions including new health and safety legislation.
The legislation means well and I am sure it will have a positive impact longer term. But in the short terms it has created the perverse consequence of business people, being more concerned about the risk of being caught not following the Act (which is an artificial risk) than with the real risks in the workplace. For example, people may go to some pains to ensure that the road facing side of their house is properly scaffolded but that may not prevent them using a ladder instead around the rear of the house where they can’t be seen. Schools also seem to have been affected badly by over-reaction, with school camps and field trips a likely casualty. And I ran across an example the other day where the home cooking of a cake for a private party was banned because of the “uncontrolled” nature of the cooking operation and thus the risk. “How bizarre” as the song goes.
And despite all of this, deaths are still occurring in high risk industries such as forestry.
I think part of the answer is to get better legislative recognition that managing risk is a shared responsibility, not something to be lumped on one person or on management. So long as individuals think they are at particular legislative risk, they will act in a very risk adverse fashion – and who can blame them. But in the meantime the behaviour of people actually taking or creating the risk may not change all that much.
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This is another of Bas Walker’s posts on GrownUps. Please look out for his articles, containing his Beachside Ponderings.