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In detailAll about this edition of Equipped.
Feature essay Managing risks is less about stopping bad things from happening, and more about being able to deal with them if they do.
Sorting it out: what is the difference between hazard and riskBeing clear is essential if we hope to manage risks and reduce hazards.
Outside your comfort zone - assessing your personal risk taking styleIt’s not just work where risk exists. Guest contributor Dee McCrorey shares a way to discover just how far out of our own comfort zones we are prepared to go.
What does experience say?Seasoned professionals shed some light on the complex issue of risk: what is it and where can it be found?
Risks: what they are and are notA simple guide to the what and when of risks.
The one thing that creates and eliminates risk The reasons that people do things can create risks or eliminate risks. It all comes down to managing self-interest for the greater good.
Ask the bossMaking sure that what we think is in line with what the boss thinks is a good place to start understanding the risks we face.
Risk analysis & hiringIn this guest contribution, Brittney McDowell explains how getting the hiring process right will greatly reduce your risks.
About the UnitHow mastering this topic can move you closer to several nationally recognised qualifications.
Not all risks are created equalDeciding on whether to respond to a risk comes down to a not-so-simple tradeoff.
Tools for the jobA British government department has taken lots of the mystery out of risk management with a whole host of online resources.
Positive chaos and the management of peopleGuest contributor Wally Hauck introduces a way to not just tolerate but embrace chaos as a way to reduce risk.
A visual approach to identifying critical steps Everything we do is meant to be valuable. But, how do we identify those things that are most valuable?
Share & followShare the getting Equipped advantage
Contents
In Detail
I was talking to my daughter about it,
and from the wisdom of her 8 years, she
declared that what he was doing was a bit
risky.
In another documentary about risk takers,
they often talked of the cost of not taking
the risk being too high. I guess they were
talking about the quality of life that comes
from not being able to exercise their risk
taking tendencies.
While the risks at work (well, for most of us anyway) may not be so drastic as smashing into a cliff and ending up in a wheelchair, there are many risks that we are involved in with every task we perform. And while they may not all have something to do with personal health and safety, these risks affect
All about this edition of Equipped
I have always been fascinated by geology. I
have never really understood it, but to swim
in a place like Lowes Basin is something
special (that’s it there on the right, and
paddling through with the kids on the left).
I suspect that it has something to do with
seeming so peaceful and still but with the
knowledge that the reality of its creation
involves far more destructive forces.
An article about BASE jumpers got my
attention while I was reading the paper a
little while ago. The story included a piece
about a man who likes to jump off cliffs with
a parachute. One day, things went wrong
and now he jumps off cliffs with a parachute
and a wheelchair.
Equipped / In Detail / 03 Your Free Magazine from Fortress Learning
The greatest risk of all is to take no risk at all
the health and safety of our workplaces. These are the things that could affect the bottom line, and that affects our own job security.
But while most people think of risk in terms of safety, most risks at work have nothing to do with safety. Instead, they have to do with what can happen if other things don’t go to plan. They have to do with the things that people can do that can upset the apple cart.But just how upset can the apple cart get before we should intervene?
That is the stuff of this edition of Equipped.We will explore the whole idea of Risk, what it is (and isn’t) and what we can do about it. As in every edition, we will hear from those with greater wisdom than ourselves and learn from their experience.
Email: [email protected]
Twitter: @GetEquippedMag
ABOUT THE EDITOR
Bryan West is the editor and publisher
of Equipped. In July 2012, he left his job
as Manager of Fortress Learning to focus
on consulting work and explore ways to
better deliver digital services to regional
communities.
Bryan studied at QUT, UQ and the ANU,
and currently lives and works in regional
Queensland.
FREE SUBSCRIPTION If you have not already subscribed to receive each edition of Equipped straight to your inbox, then you can subscribe on the website.It’s totally free.
Equipped / In Detail / 04 Your Free Magazine from Fortress Learning
We had a perfect example of this with the
earthquake and tsunami that hit Japan in
March of 2011. Millions of lives were affected
by what happened; first by the earthquake,
then the tsunami, and then by the damage
to the nuclear power plant. Not only workers
in the plant were affected, but millions of
customers, everyone who lived within 20
miles of that nuclear plant, even people as
far away as the western part of the United
States were affected by what happened in
that event.
Even without the destruction and eventual
meltdown of the nuclear power plant,
the tsunami itself wreaked havoc on the
northeastern part of the Japanese home
island of Honshu. Over five million families
lost their homes, with over 15,000 lives lost.
Life is full of risks. Everything we do, from
buying a car to crossing the street, carries
some degree of risk. Therefore, it shouldn’t
surprise us that our business activities have
risk associated with them as well. While
some of those business activities carry very
little risk, others come loaded with risk at
every turn. Some risks have a great potential
for impact, while the impact of others can
hardly be seen.
While the risks in our personal life can cause
problems for us and our families, even
the smallest business risks carry a much
broader potential for causing damage.
Employees, customers and even people
who seem unrelated to our business can
end up being hurt by the risks associated
with business.
Equipped / Feature Essay / 05 Your Free Magazine from Fortress Learning
Feature EssayManaging risks is less about stopping bad things from happening, and more about being able to deal with them if they do.
The nuclear power plant had been designed
to withstand a certain amount of damage
caused by natural disaster. This level of
sustainability had been determined by
careful study and analysis of the likely risks
that existed for the location and type of
structure being built. However, nobody had
anticipated the massive amount of damage
caused to that power plant by the tsunami
that struck it. That was beyond what they
had expected.
Similar, but less widespread disasters have
happened in the Gulf of Mexico and other
places, when various hurricanes have struck
offshore oil platforms. While they were
designed to withstand a certain amount of
disaster, there is always a limit in what those
structures can withstand. When the force of
the hurricane surpasses the design criterion
for the platform, disaster strikes.
In many cases, there is nothing we can do
to stop these disasters from happening.
Risk management isn’t about that, it’s
about understanding the potential risks and
managing how a company deals with that
risk to mitigate the damage caused by it.
The International Organisation for
Standardisation (ISO) defines risk as the
combination of the probability of an event
and its consequences. The examination of
risk involves the assessment of likelihood
the event will occur in conjunction with
the outcomes. The ISO 31000 2009 has
defined the principles that govern a good
risk management program. The ISO is not
a regulatory agency and therefore these
principles are intended to be used for
guidance, not as an all inclusive procedure
with strict application for every industry.
It tells us that risk management:
• creates value as an integral part of an organisation’s processes
• is part of decision making • explicitly addresses uncertainty • is systematic, structured and timely • is based on the best available information • is tailored • takes human and cultural factors into
account • is transparent and inclusive • is dynamic, iterative and responsive to
change • facilitates continual improvement and
enhancement
These principles emphasise the importance
of risk management as a core corporate
value. It is not an event or process that
should be visited at scheduled intervals
as a means to meet an obligation. You
cannot institute minimum criteria for
risk management such as attending a
conference on the topic in order to give it
obligatory attention. Risk management
can be incorporated into an organisation’s
existence through processes geared toward
examining the “what can happen” before,
during, and after a potentially damaging
event.
One of the myths of risk management is that
it is inherently bad. Unfortunately, the word
“risk” connotes a negative. However, in the
sense of risk management, the judgment
of good or bad is not incorporated into the
definition. The “risk” is defined as an event
in conjunction with likelihood of occurrence.
This definition is important because it
generalises the usage of the concept. We
are no longer talking about the chance
that something catastrophic will happen.
Risk management is about the potential
Equipped / Feature Essay / 06 Your Free Magazine from Fortress Learning
relationships between events, projects,
or incidents. Risk management can be
incorporated into every facet of corporate
life in order to, as the Scouts motto
encourages, “Be Prepared.”
Risk management follows other corporate
guiding principles including the need
to be systematic, structured and timely.
People are susceptible to emotional
influences. By creating a risk management
environment in which the emotional
impact is minimised and we deal with facts,
we can effectively distribute resources
and maintain a productive process for
risk management throughout industries,
companies, departments, and individuals.
Risk management takes “uncertainty” and
juxtaposes it with facts and logic in order
to create a usable framework for guiding
decisions and preparing contingencies.
Equipped / Feature Essay / 07 Your Free Magazine from Fortress Learning
Equipped / Feature Essay / 08 Your Free Magazine from Fortress Learning
Equipped / Sorting it out / 09 Your Free Magazine from Fortress Learning
Sorting it out: What is the
Difference between Hazard and Risk
Being clear is essential if we hope to manage risks and reduce hazards.
The problem here really stems from
the group not making sure that they all
agreed on the meaning of the words they
were using. This is a common thing in
workplaces, and I am pretty sure most
readers can recall many situations where
different people had different definitions
which created different expectations ... and
some degree of chaos.
We can use this example to work out the
meanings of both hazard and risk.
Hazards and risks are everywhere. Some
people think that hazard and risk are the
same and one is a synonym of the other. But
the real fact is that hazard and risk are used
in different contexts.
Think about this situation:
A group of people has formed a
Committee to create and implement a
Risk Management Plan for their workplace.
Naturally, they are having a conversation
about hazards and risks. They get to the
end of the conversation and seem to agree
on a Plan and they go about implementing
it.
But, within a short period, the whole thing
falls to pieces and soon enough they are all
confused and frustrated.
I thought we were managing risks?
We are.
No, you just identified a hazard, not a risk.
No I didn’t. It’s a risk.
I don’t think so....
.....and so it goes.
What is hazard?
It is an existing situation that is likely to
cause damage. We all recognise the physical
ones, such as electricity, chemicals, toxic
gas or some heavy work. Hazard can also be
said for a situation or an object that could
adversely affect the surroundings.
In the example above, the lack of clear
definitions that they all shared was a hazard
because it damaged the quality of the work
they had hoped to do.
What is risk?
Well, it really is about what might happen,
and how likely it is that something might
happen. A risk is potential harm or danger
in the future. Because it is in the future, it
could be avoided or mitigated. By taking
action now, we can reduce the risk that the
hazard will ever occur.
So, in the above situation, when they started
to work together, the risk was that their
lack of common knowledge would lead to
their final product being not as good as it
needs to be. Once they started the project,
the hazard was that the lack of common
knowledge was adversely affecting their
final product.
How great the chance that someone will be harmed by the hazardAnything that can
cause harm (eg. a chemical, electricity,
ladders, etc)
RISKHAZARD
See the difference?
Hazard is now. Risk is then. Hazard is
potential for harm or damage. Risk is
likelihood of harm or damage.
What this means is that when we talk about
managing risk, we are making a series of
conscious decisions about three things:
1. What is the chance of harm or danger
from future actions?
2. What is the likely impact of that harm or
danger?
3. What we are going to do about it, if
anything?
Equipped / Sorting it out / 10 Your Free Magazine from Fortress Learning
Equipped / Outside Your Comfort Zone / 11 Your Free Magazine from Fortress Learning
Outside Your Comfort Zone Assessing Your Personal Risk Taking Style
It’s not just work where risk exists. Guest
contributor Dee McCrorey shares a way to
discover just how far out of our own comfort
zones we are prepared to go.
When was the last time you assessed your
preference for working outside your comfort
zone? Although a “no one-size-fits-all” risk
taking style exists given the different criteria
that can influence how you approach
workplace situations, generally you can
assess your comfort zone when dealing with
unknown outcomes.
Your Personal Risk Taking Style
You can begin by taking this self-assessment
and answering the fourteen statements
below. Try not to over think your responses
it shouldn’t take you longer than one
minute. Tally your Yes responses in order to
get a general sense of your risktaking style at
the bottom of the page.
1. Creatives tend to come to you more often when they want to brainstorm an idea. (4 = yes, 1 = no)
2. You consider yourself skilled when persuading others to change. (5 = yes, 2 = no)
3. You’re capable of establishing risktaking boundaries for yourself while also setting clear expectations for others. (5 = yes, 1 = no)
4. You prefer to work the “risktaking muscle” within a team setting. (4 = yes, 1 = no)
5. You typically avoid tasks or activities perceived as having no known outcomes. (1 = yes, 3 = no)
6. You are the go-to person for “what if” scenarios when people want to cover their bases in mitigating risk. (3 = yes, 1 = no)
7. You go out of your way to avoid “politically charged” situations at work. (1 = yes, 3 = no)
8. You prefer to have others manage the details of the risks that you take. (1 = yes, 3 = no)
9. You’re capable of taking limited risks if the benefits are clearly stated. (3 = yes, 1 = no)
10. In the last five years you’ve received promotions and individual recognition for your personal risktaking abilities. (2 = yes, 4 = no)
11. Ideas appear riskier to you if no supporting data exists. (3 = yes, 1 = no)
12. Your comfort with unknown outcomes exists when you have more control in driving the results. (1 = yes, 3 = no)
13. Others consider you entrepreneurial because of your ability to adopt change quickly. (5 = yes, 2 = no)
14. Accountability for the risks you choose to take begins and ends with you, which is why you prefer to “go it alone”. (1 = yes, 3 = no)
Your score: 10 or less Yes responses
Scoring less than ten actually covers more of
the extremes of personal risk taking. At one
end of the spectrum are the Saboteurs who
often derail change either within themselves
or others and the Avoiders who channel
their fears into avoidance behaviors. At the
other end of the spectrum are the Reckless
Mavericks who take riskier moves, but who
accept little to no responsibility for the
outcomes, preferring that others “clean up
their mess” when something goes wrong.
Your score: 11 - 16 Yes responses
Although you have a tendency to be
Skeptical when it comes to adopting change
or for taking personal or professional risks
without convincing data, you find that
you’re willing to Adopt new ways of working
the “risk taking muscle” if someone clearly
shows you how and is willing to become a
safety net for you.
Your score: 17+ Yes responses
You are the more advanced Adopters
and Responsible Risk takers who are
clearly more comfortable dealing with
unknown situations, while assuming more
responsibility and accountability for your
actions. You are not willing to see yourself
as a victim of unknown outcomes and will
typically leverage business models and solid
communication skills for influencing and
persuading others to change.
Equipped / Outside Your Comfort Zone / 12 Your Free Magazine from Fortress Learning
Many thanks to Dee for permission to
republish this tool.
DOLORES “DEE” MCCROREY is the owner of
Risktaking for Success, a consultancy and
training business operating in Silicon Valley
since 1997. She is the author of Innovation in a Reinvented World: 10 Essential Elements to Succeed in the New World of Business (Wiley, 2011), a practical guide for
thriving in a new reality. You can subscribe
to her weekly Risk Tips videos by visiting
www.RisktakingforSuccess.com.
Learn More:
Click here to visit Dee’s Ezines account.
Click here to visit the Risk Taking for Success
website.
Equipped / Outside Your Comfort Zone / 13 Your Free Magazine from Fortress Learning
What does experience tell us?Seasoned professionals shed some light on the complex
issue of risk: what is it and where can it be found?
legal landscape and so many more things.
For me, I think that the biggest risk
to any organisation is the absence of
understanding of risk by the people who
work among it every day.
What’s that?
If everyone in the organisation is somehow
a part of helping the organisation get the
things it seeks (eg, money, a good public
reputation, quality service delivery), then
it is a simple truth that everyone in the
organisation is somehow connected to the
chance of losing something that you’d prefer
not to lose. It could be money, reputation,
or something else. If they don’t understand
how they can cause such a loss, then there
is a good chance that they cannot prevent it.
That’s risky business.
I asked a few colleagues what they thought
of risk, and got a most interesting response.
Well, it was interesting more in terms of
the difference in response. You see, I asked
some people who were managers and
supervisors, and then I asked some people
who had no responsibility for other people.
Let’s call them Group 1 and Group 2.
Group 2 talked of risk in terms of health and
safety. They talked about the possibility
for something physically to happen. Fair
enough.
Group 1, however, talked of risk in terms
of all sorts of things. Actually, they talked
of risk in terms of everything. Sure,
health and safety is part of it, but so too is
organisational procedure, financial control,
cashflow forecasting, human resources, the
Because so many new managers seem to
grapple with the concept of risk, I invited
some of my more experienced LinkedIn
connections to reflect on the meaning of
risk, and to share their experience of what
the most commonly overlooked risks might
be.
The general feeling was that new managers
tended to focus more on the things from
“outside” that could affect the work that
they were trying to achieve “inside”. While
they seem to understand physical risk, there
seems less awareness of the other forms
that exist.
Equipped / What does experience say? / 14 Your Free Magazine from Fortress Learning
It was only once the managers had acquired
some experience, including in managing
people, that they moved to recognise that
many of the most serious risks were these so
called “inside” risks: the things that people
within the organisation do, and often without
thinking (which perhaps goes to the heart of
the problem).
Here’s what they had to say:
Cheryl Roshak:
Any human endeavour has some risk
associated with it. Risk is simply the potential
for loss or an unfavorable outcome by any
chosen action and activity or inaction we
decide to make or participate in. There are no
guarantees in life about anything. You can’t
foresee every aspect of the future when you
embark on anything, life comes at you and
the only thing you have control of is how you
respond to what comes at you.
Life, in and of itself, is filled with risk. Crossing
the street, cooking with knives, driving a car.
Any mundane activity, like tripping on a rug
could end up in a potential disaster.
Brittney McDowell:
Risk is a situation involving exposure to
danger. The most commonly overlooked
form of risk is that which is involved in hiring.
I believe this to be a commonly overlooked
risk because companies are not sure how to
adequately identify, prepare for and manage
the risks associated with hiring. For every
hire, a risk analysis should be done. The first
step to a risk analysis is to identify the risks.
There are 7 risks you must identify:
- Human Risks: Risks associated with the
illness, death, injury or loss of the new hire
or those that would directly impact them
and/or their work.
- Operational Risks: Risks associates with
business operations.
- Reputational Risks: Risks associated
with a reduction in external and internal
consumer confidence.
- Procedural Risks: Risks associated
with internal systems, fraud and
accountability.
- Functional Specific Risks: Risks
associated with position specific duties
and tasks.
- Financial Risks: Risks associated with
business profitability, market share,
market fluctuations and available capital.
- Technological Risks: Risks associated
with technology.
Kenneth Larson:
COMPETITION: Most businesses have
competition. How will your business differ
in significant and positive ways from your
competition? If your competition is strong,
don’t minimize that fact, but figure out ways
you will adjust to or use that strength. For
example, if you plan to open a restaurant
next to an extremely popular one, part
of your strategy might be to cater to the
overflow. Another might be to open on days
or evenings when the other restaurant is
closed.
PIONEERING: If you anticipate no direct
competition, your business probably
involves selling a new product or service,
or one that is new to your area. How will
you avoid going broke trying to develop a
market?
CYCLES AND TRENDS: Many businesses
have cycles of growth and decline often
based on outside factors such as taste,
trends or technology. What is your forecast
of the cycles and trends in your business?
For example, if your forecast tells you that
the new electronic product you plan to
manufacture may decline in three years
What is risk? 1In your experience, what risks are most commonly overlooked? Why do you think they are overlooked?
2
Equipped / What does experience tell us? / 15 Your Free Magazine from Fortress Learning
Andy Cawston: Identify the things that you
do not know about, or are uncertain about:
they are all risks. From there you can do
cause-and-effect planning, and from that you
can build a robust risk response capability.
when the market is saturated, can you earn
enough money in the meantime to make
the venture worthwhile?
SLOW TIMES: Every business experiences
ups and downs. Is your business small and
simple enough, or capitalized adequately
enough, to ride out slow times? Or do you
have some other strategy, such as staying
open long hours in the busy season and
closing during times of the year when
business is?
OWNER’S EXPERTISE: Nobody knows
everything. How do you plan to compensate
for the knowledge you’re short on?
Safia Syed:
Compliance risks are sometimes very easy
to be overlooked. Businesses are too busy
to minimize the other risk and policy and
procedure might take a back seat unless
one investigation can lead to the finding on
non compliance.
BM: Start by completing a risk analysis
when hiring. Try as best you can, without
bias or too much optimism, to look for
vulnerabilities in the potential hire. If you
work with others in the hiring process, ask
them to do the same.
KL: Write your risk analysis by first thinking
of the main dangers your business faces.
This shouldn’t be hard, as you have
probably been concerned about them for
some time. Some of these may be on the
list set out above; others will be unique to
your business. Once you have identified the
principal risks facing your business, write
out a plan to counter each. But don’t bog
yourself down worrying about all sorts of
unlikely disasters
How do you go about identifying risks in a new position?
3Thanks to our contributors for their
thoughts and insights. You can find
more from them through their LinkedIn
profiles:
Andy Cawston, Management Consultant
at Hart-Knox Academy, nz.linkedin.com/
in/andycawston/
Cheryl Roshak, Transition and Career
Coach, CatapultMe.biz; www.linkedin.
com/in/cherylroshak/
Kenneth Larson, MicroMentor Volunteer
and Founder “Smalltofeds”, www.
linkedin.com/in/odysseyofarmaments/
Brittney McDowall, Founder & CEO at
WorkReply, www.linkedin.com/pub/
brittney-mcdowell/35/8bb/639/
Safia Syed, Regional Controller Finance
at Aditya Birla Minacs, ca.linkedin.com/
in/safiasyed/
Equipped / What does experience tell us? / 16 Your Free Magazine from Fortress Learning
Risks: What they are and are notA simple guide to the what and when of risks.
TAKING A RISK: IT ISN’T ALL BAD
• Taking risks is a normal unavoidable everyday necessity.
• Taking controlled, informed risks is a sensible and everyday essential part of life.
• Taking uniformed, uncontrolled risks is patently dumb.
• We take risks not to avoid harm, but to achieve benefits and gains.
• Risk taking is positive, not implicitly negative.
RISK MANAGEMENT IS EVERYBODY’S BUSINESS
• Risk Management is not just the responsibility of the management.
• For Risk Management to be effective it must be implemented by every person in the
organisation.
• Risk Management must become an integral part of the organisational culture.
• The risk makers and the risk takers must be the risks managers.
Equipped / Risks / 17 Your Free Magazine from Fortress Learning
MANAGING RISK
• Managing risk means forward thinking.
• Managing risk means responsible thinking.
• Managing risk means balanced thinking.
• Risk Management provides a framework to facilitate more effective decision making.
• Risk Management is all about maximising opportunity.
RISK MANAGEMENT IS NOT...
• Just accounting controls.
• Another name for insurance.
• About creating risk averse management.
• A label to hide inadequate analysis when something goes wrong.
• A green light to careless enthusiasts.
• Opening door to “risky management.”
Equipped / Risks / 18 Your Free Magazine from Fortress Learning
The one thing that creates and eliminates risk The reasons that people do things can create risks or eliminate risks. It all comes down to managing self-interest for the greater good.
In the introduction essay, we read that
people are susceptible to emotional
responses to situations. With that in mind
it is worth thinking about how our personal
responses can potentially affect risk.
About 400 years ago, Thomas Hobbes came
up with the idea that our behaviour is driven
by self-interested pursuits. It kind of makes
sense because if we do things that benefit
us, then we will be happier. If our lot in life
improves, then we feel good; we want to
pursue this. If our lot in life worsens, then
we feel bad; we want to avoid this.
But, there is a problem with this idea. While
it seems incredibly logical, researchers have
time and again shown that despite the
apparent sense of it, people are surprisingly
very good at choosing things that do not
actually benefit them. Sometimes this is
because they choose to benefit someone
else, like doing volunteer work or making
a charitable donation. Sometimes it
is because they have self-sabotage
tendencies.
But there is also a third group. These are
the people who choose to benefit neither
themselves nor someone else, and nor are
they intentionally self-sabotaging.
When placed in the position of needing to
make a decision, this person simply avoids
any trade-off between benefits for self versus
benefits for others. To choose themselves is
to consciously create a situation of guilt and
anxiety. To choose for the others is to create
a situation of unease because they will not
themselves benefit. In the face of this, the
default choice is not to choose at all.
When it comes to work, people will generally
do the things that make it easier for them to
get through the day. But, that might mean
short-cutting the steps in some processes or
perhaps remaining silent about inefficiencies
within the whole organisation. These are
risky situations, because they could lead
to loss of damage to the organisation. But,
after all, what benefit is there for the self by
upsetting others? Nobody wins. There is,
however, a great benefit in remaining silent:
Equipped / The one thing that creates and eliminates risk / 19 Your Free Magazine from Fortress Learning
the person gets a more comfortable work
life and avoids the pitfalls of rocking the
boat.
But, this is a problem. Organisations need
their people to “rock the boat” to identify
inefficiencies. In a world where 9 out of
10 small businesses fail to see their 10th
birthday, and where small business is the
single largest employer of people, it is
actually in the employee’s own interests to
do so: improving efficiency improves the
bottom line which improves the outlook for
the organisation.
The challenge then is to find a way to
use self-interest to benefit the whole
organisation. In other words, how do we get
the individual to choose to do things that
might not immediately benefit them, but
will ultimately benefit everyone?
What do people actually want?
To know how to resolve this conundrum
requires us to know what people actually
want.
Luckily, the folks at Wharton Business School
did an interesting series of experiments a
while ago, and their results are very helpful
here. They found three things that help us:
1. If the employee feels obliged to do
something out of self-interest, and is
rewarded for doing so, then they will
feel good about it. The same thing does
not happen if they are obliged to do
something out of interest for others.
2. If the employee is faced with a decision between benefitting themselves or others, then they will struggle more with the
decision than if it were just deciding something about different benefits for themselves.
3. If the employee believes that self-
interest is a requirement of their job,
then they will feel better about it.
Within a workplace, this means that people
will not generally choose to act in ways to
benefit the greater good, just because they
feel some moral obligation to do so. They are
more likely to choose to act in ways to benefit
the greater good if this is imposed on them in
a way that serves their own self-interest.
This is because while people like to enjoy
self-interested outcomes, they do not like to
feel selfish.
By imposing a way for them to act in
a self-interested way, the person then
becomes free to enjoy self-interest without
selfishness.
One way to make this happen is to include it
as an item in people’s Position Descriptions
and actively manage it as part of their
performance.
Equipped / The one thing that creates and eliminates risk / 20 Your Free Magazine from Fortress Learning
Equipped / The one thing that creates and eliminates risk / 21 Your Free Magazine from Fortress Learning
Ask the Boss
Making sure that what we think is in line with what the boss thinks is a good place to start understanding the risks we face.
Two professional colleagues agreed to share
their experience of where they see their
employees come up short when it comes
to risk-awareness, and offer some ways for
their workers to improve in this area.
Rachel Weeks is the Director of Brisbane’s
McLean Legal. Chris Gribble is the Managing
Director of Fortress Learning.
When it comes to the people you supervise, what are the sorts of risks that they most commonly seem to overlook?
1
Rachel Weeks:
Emails. The way they are used by people
creates a real risk to any organisation.
People write stupid things in emails.
Sometimes these things are meant to be
jokes, and sometimes it is just because they
did not take care with the words they chose.
Either way, it is very dangerous.
If things ever go to court, you have to
assume that every email you have ever
written will end up in front of a judge who
does not have a sense of humour.
It seems that people mistake the
convenience of an email with permission to
be less formal. But, the reality is that email
is a formal means of communication. It is
just like a written letter, and needs to be
treated that way.
Are you able to think of a few examples of how email is used in such a risky way?
The most common is just using informal
language. By forgetting to include details
Equipped / Ask the Boss / 22 Your Free Magazine from Fortress Learning
such as Dear Rachel and Yours sincerely, you
are changing the way in which your business
is being portrayed, and that can have serious
effects on client confidence in you. It can
affect your reputation quite seriously.
Another example that is becoming more
common is where people have multiple
email accounts, but send/receive from a
single account. This creates the risk that you
use an inappropriate email address when
writing an email to someone, and while that
seems innocent enough, it can be enough to
create issues over conflict of interest, as well
as confusion among your clients (and loss
of emails that get caught up in spam filters
instead of getting to their destination).
If an employee leaves in less than favourable
circumstances, and then another employee
sends them emails detailing what is
happening in the company, then the
disgruntled former employee can create all
sorts of trouble using that information.
Another example is harassment. When
someone sends a company email that says
something bad about someone else, or
makes fun of what they wear or any other
part of their life, then it becomes an issue of
harassment and workplace bullying.
In all of these situations, as the employer,
I am the one who is held responsible for
the actions of my employees. If one of my
employees does something stupid, then I am
the one responsible.
Chris Gribble:
Compliance - A student that is mismanaged
could result in a complaint that leads to an
audit. This could have a negative impact on
our business.
Information management - Ensuring that
our information is secure and backed up.
With many of our staff working remotely
ensuring that all information is able to be
accessed and is secure.
Processes - Once these become part of a
routine they can be overlooked.
Why do you think these are the risks they overlook?
2
RW: They think that email is like a phone
call; just a form of communication that
nobody will ever look at. But that is not true.
I have seen emails and text messages
used in legal trials. In one way, electronic
communication needs to be even more
carefully considered than writing a letter
on paper. At east you can shred or burn
a piece of paper ..... once an email or text
message has been composed, it is there
forever and ever. You might think you have
deleted something, but forensic examination
techniques will find it.
It’s all there.
CG: They are often seen as little things
but combined with other errors they can
compound to become bigger issues.
People will tend to focus on their roles and
forget the bigger picture and the implications
of what can go wrong if all the moving parts
in our organisation are not understood and
are working together well.
RW: If they want to keep their job, then
they need to be very aware of the risks of
emails. It is the sort of thing that can cause
an organisation to go down, and if the
organisation goes down, then people will
lose their job.
But it is also about just doing the right thing.
A simple personal rule to use with email is:
if it’s something that you don’t want to see
plastered on a noticeboard, then don’t send
it.
CG: I think that understanding the impact
of the risk on the entire organisation and the
implications of the company not managing
the risk well are very important for our
Why is it so important that these risks be at the forefront of employee’s minds?
3
Equipped / Ask the Boss / 23 Your Free Magazine from Fortress Learning
organisation. Ultimately the better everyone
understands the risks for our organisation the
more they will be committed to ensuring that
there are processes and strategies in place to
ensure we are able to provide our service at
the level of excellence we expect.
RW: It really comes down to employees
treating the organisation as though they
owned it. Once people start to think of the
business as if it were their own, they usually
act more wisely in every way. Thinking about
their responsibilities before their entitlements
will go a long way to reduce the risks.
CG: There are two things that we try to
embed in our workplace.
1. Regular accountability in meetings to
ensure that key areas are reported on.
These meetings ensure that all staff are
kept up to date with processes and
required performance benchmarks.
Through these meetings staff are able to
see the bigger picture and all staff are able
to own any areas of risk that may emerge.
2. Regular review of processes for all tasks
to ensure consistency - If something does
go wrong the processes can assist in
clearly identifying what is the issue and
then either fix the process so that it does
How can employees better identify the risks that their work is involved in?
4
ensure the correct result is attained or
ensure that if it is a human error then it is
not done again.
Thank you to both Rachel and Chris. What
stands out to me is that for both Rachel and
Chris, it is almost a case of the little things
are the big things. Just as the convenience
of email can lead to risky communications,
so too does the comfort that can come from
being very familiar with your own job. It is
easy to fall prey to the false confidence that
comes from being employed to do a job for
a while.
But, if every now and then we shortcut the
process, even just making a little change
here and there, we can actually be having
a broader impact on others and on the
organisation as a whole.
Equipped / Ask the Boss / 24 Your Free Magazine from Fortress Learning
Risk Analysis & HiringIn this guest contribution, Brittney McDowell explains how getting the hiring process right
will greatly reduce your risks.
Everything you do, hiring included, involves
some form of risk. To effectively and
efficiently deal with the risks associated with
hiring, your job, when hiring, should entail
identifying, preparing for and managing
risk. Adequate risk analysis, when hiring, will
ensure that you limit potential disruption to
current operations and keep things as cost-
effective as humanly possible.
So how do you identify, prepare for and
manage risk effectively when hiring?
Let’s Start With The Basics.
Just what is risk analysis?
In its simplest form, risk analysis is an analysis
that helps you properly identify, prepare for
and manage problems. Specifically, what you
are analyzing is the probability of something
going wrong and the negative effects of
occurrence.
The Steps.
When hiring, in the event that you decide
(wisely) to perform a risk analysis, these are
the suggested steps:
Equipped / Risk Analysis & Hiring / 25 Your Free Magazine from Fortress Learning
1. Identify The Risk.
Identify existing and possible risks
associated with the on-boarding of a new
staff member. Risks you should seek to
identify are:
- Human Risks: Risks associated with the
illness, death, injury or loss of the new hire
or those that would directly impact them
and/or their work.
- Operational Risks: Risks associated with
business operations.
- Reputational Risks: Risks associated
with a reduction in external and internal
consumer confidence.- Procedural Risks: Risks associated with
internal systems, fraud and accountability.- Functional Specific Risks: Risks
associated with position specific duties and tasks.
- Financial Risks: Risks associated with business profitability, market share, market fluctuations and available capital.
- Technological Risks: Risks associated with technology.
The list above is a great place to start when
completing a risk analysis when hiring. Try
as best you can, without bias or too much
optimism, to look for vulnerabilities in the
potential hire. If you work with others in the
hiring process, ask them to do the same.
2. Prepare For The Risk.
Once you’re aware of the possible risks
associated with a new hire, you need to be
aware of what the likelihood of those risks
being an issue is and the possible effects.
The best way to prepare for a possible risk,
is to assign a value to it, a literal value. How
do you accomplish this?
A simple formula.
Probability X Cost = Value
Example:
WorkReply is considering hiring Sue. When a risk analysis was performed, one of the risks identified was a functional specific risk. The initial phase of the analysis suggested that given her previous occupational experience and the lack of direct relation to the
position we are considering her for, there is a functional specific risk. Sue has never performed some of the specific duties and tasks related to the position.
To determine the probability, we need to ask ourselves ‘how likely is the effect of risk to be a problem’? We decide that the likelihood of the effect of the risk being a problem is moderate, because although she has not had any direct experience, all her pre-employment testing indicates that she is more than capable of learning, in a timely manner, the position specific tasks and duties. Probability is on a scale of 1% to 99%. Probability, when preparing for a possible risk, can never be 0% or 100%. If the probability is 0%, that means the risk will certainly never be an issue. Therefore, it is not even a probable risk. If the probability is 100%, that means the risk will certainly be an issue because it will occur, guaranteed. No ifs, ands or buts. It is guaranteed to happen. In this instance, you would be analyzing results, not risks. The lower the number assigned to the risk, the less likely it is to happen. The higher the number assigned to the risk, the more likely it is to happen.
We decide to assign the moderate
probably of 40% to Sue.
To determine the cost of the functional
specific risk, we need to figure out the
cost of the risk. Training for the position
specific tasks and duties in question
would require 10 hours of training.
You could determine the cost 1 of 2
ways. If the position is a direct revenue
generating position, generating say
$300 per day and she works 8 hours
per day, she generates $37.50/hour
in revenue (with her salary already in
consideration), multiply that by the 10
hours of required training and you arrive
at a cost of $375. If the position is not a
direct revenue generating position and
Sue would make $15/hour, multiply that
by the 10 hours of required training and
you arrive at a cost of $150.
For the sake of the example, Sue’s
position is not a direct revenue
generating position and we figure the
cost to be $150.
Equipped / Risk Analysis & Hiring / 26 Your Free Magazine from Fortress Learning
To determine the value of the identified
functional specific risk, we multiply the
probability by the cost.
0.40 (Probability) X $150 (Cost) = $60 (Value)You prepare for the risk by asking yourself the REAL question.
What is the REAL question?
Let’s go back to the example, Sue.
In Sue’s case, the REAL question we need to ask, when preparing for the risk associated with hiring Sue is NOT if she qualified for the job based on her direct previous experience.
The REAL question we need to ask, when preparing for the risk associated with hiring Sue IS....
Can we afford the risk of $60 to hire Sue and make operations more effective and efficient?
3. Manage The Risk.
Once you have identified and adequately prepared for the risks associated with hiring someone, you need to make sure
you are prepared to manage the risks. It is important to consider the costs of managing risks, in whatever way you manage them, because if it is not cost-effective, it is not justified. When it comes to managing the risks of hiring, you have 3 options:
- Use your existing resources.- Accept (and seek to minimize) the risk.- Invest in and acquire new resources.
Conducting a proper risk analysis when hiring may require a little more work on your part, but it will be cost-effective in the long and short term. Also, a proper analysis should aid in the accuracy of your employee reviews, clearly showing you what progress is, or is not, being made.
Many thanks to Brittney for sharing her thoughts.
Learn more:
To learn more about Brittney and her services, click here. To visit Brittney’s blog click here.
Equipped / Risk Analysis & Hiring / 27 Your Free Magazine from Fortress Learning
About the Unit
BSBRSK501B - Manage Risk
This unit really focuses on being able to
work out the possible risks that could exist
in a given situation, then moves to ways to
identify those risks, work out some possible
strategies to prevent them and techniques
to then go ahead and implement risk
management plans. It stresses the
importance of viewing risks as not just
physical threats, but as things within and
outside an organisation that can interfere
with achieving the desired goals.
BSB40207 Certificate IV in Business Possible elective
BSB40407 Certificate IV in Small Business Management Possible elective
BSB40507 Certificate IV in Business Administration Possible elective
BSB40807 Certificate IV in Frontline Management Possible elective
BSB50207 Diploma in Business Possible elective
BSB50407 Diploma in Business Administration Possible elective
BSB51107 Diploma in Management Possible elective
One way to show your boss – or prospective
boss – that you are ready for the extra
responsibility of managing others is to
complete this Unit of Competency as part of
a Nationally Recognised Qualification.
Because of the flexibility within the system,
this particular unit can be used as part of
a number of Qualifications. While it is not
a core unit for any of the Major business
courses, it can be counted as an elective
units toward three Diploma courses and
four Certificate IV courses.
Take a look:
It won’t surprise you that the importance of
managing risk has been recognised by the
entire Business Services industry. After extensive
consultation, the Industry Business Skills Council
discovered what employers want from their workers,
and embedded it into a Unit of Competency:
Equipped / About the Unit / 28 Your Free Magazine from Fortress Learning
What that means is that when
you have completed this unit,
you can apply it to more than one
qualification. Looking at the list
above, it is more like being able to
kill up to 7 birds with one stone.
Equipped / About the Unit / 29 Your Free Magazine from Fortress Learning
Being at Level 5 of the Australian
Qualifications Framework, this unit of
competency requires that you:
• have specialised knowledge and skills
for skilled/paraprofessional work and/or
further learning
• have technical and theoretical
knowledge in a specific area or a broad
field of work and learning
• have a broad range of cognitive,
technical and communication skills
to select and apply methods and
technologies to:
o analyse information to complete a
range of activities
o provide and transmit solutions to
sometimes complex problems
o transmit information and skills to
others
AQF Level 5 – What does that mean?
• will apply knowledge and skills to
demonstrate autonomy, judgement
and defined responsibility in known or
changing contexts and within broad but
established parameters
Recognising your skillsFor this particular Unit of Competency, you
could gain Recognition of Prior Learning
if you were able to answer the following
questions:
1. What are the essential features of a risk
management plan?
2. Who have you worked with when
developing and monitoring a risk
management plan?
3. What legislation, codes of practice
and national standards affect the
management of risk in your industry?
Your answers would be supported with
evidence that you have done these things.
Examples could be:
• risk management plan which includes a
detailed stakeholder analysis, explanation
of the risk context, critical success
factors, identified and analysed risks, and
treatments for prioritised risks
• details of monitoring arrangements for
risk management plan and an evaluation
of the risk management plan’s efficacy in
treating risks
• knowledge of relevant legislation, codes
of practice and national standards.
Detailed information about how you
can complete this Unit of Competency,
and the Qualifications of which they are
part, is available from Fortress Learning’s
Qualification Guide.
Learn more:
Click here for more about The Australian
Qualifications Framework
Click here for more about this Unit of
Competency
Click here for the full Fortress Learning
Qualification Guide
Ask a Question
If you are still unsure about whether
completing this unit would be a good fit for
you, you’re more than welcome to email my
friend Chris at Fortress Learning with any
questions you may have. You can get him on
Equipped / About the Unit / 30 Your Free Magazine from Fortress Learning
Not all risks are created equalDeciding on whether to respond to a risk comes down to a not-so-simple tradeoff.
After identifying a risk and working out
just how hazardous it might be, we still
have to work out whether it is worth
doing anything to reduce its likelihood
of occurring or its severity of damage if it
does occur.
Lots of Very Clever People have spent a lot
of time on this question. And, of course,
that means that not everyone tends to
agree on how to decide.
But one thing that is agreed upon is that
there is always some sort of trade-off.
You see, before we decide to do anything
about a risk, we have to work out if it is
worth the effort and the cost. If the cost
of reducing the risk is greater than the
cost of the damage that the risk might
cause, then it might be worth doing
nothing.
Regardless of the scenario, what
is essential is that the decision is a
conscious one.
A useful guide comes from a bloke
called Hough who divided risks into
5 categories, based on the balance
between the cost and the risk.
Take a look:
Equipped / Not all risks are created equal / 31 Your Free Magazine from Fortress Learning
We can use a graph like this to guide us in our decision making. Once we have worked out
just how damaging a risk could be, then we can work out a tolerable cost of reducing that
risk. When the cost of reducing a risk exceeds the damage that the risk might cause, like at
the far right end of the curve, then we have to ask ourselves some serious questions.
Is reducing the risk worth the cost?
Have I underestimated the cost of the risk? If so, then my decision will be flawed.
Have I under- or overestimated the cost of reducing the risk? If so, then ditto.
Question
Question
Question
Equipped / Not all risks are created equal / 32 Your Free Magazine from Fortress Learning
Tools for the JobA British government department has taken lots of the mystery out of risk management
with a whole host of online resources.
From charity shops to mechanics, the UK
Health & Safety Executive has developed
a whole bunch of stuff that we can use for
our own work. Their online portal provides
information related to the Five Steps of Risk
Assessment:
Step One: Identify the hazards
Step Two: Decide who might be harmed and how
Step Three: Evaluate the risks and decide on precaution
Step Four: Record your findings and implement them
Step Five: Review your assessment and update if
necessary
They provide guidance and tools to help
businesses understand what they need
to do to assess and control risks in the
workplace and go some way to comply
with health and safety law. Although
written with small businesses in mind,
the site is relevant to all businesses. And
although written from a British context,
the processes are relevant to Australian
workplaces.
Interactive Tools
Risk assessment should identify practical
actions that protect people from harm and
injury.
HSE has developed these interactive tools
to help those working in low risk offices and
shops understand what they need to do to
assess and control risks in the workplace.
The tools prompt you to think about the
significant risks in your business and decide
whether you need to be doing more to control
the risks. For most risk assessments, you don’t
need to write a lot - short bullet points can work
well and the interactive tools help you record
your risk assessment quickly and easily.
A really useful part of the site is the printable
templates, many of which have been
completed for a range of workplaces. This
makes it fairly straight forward to adapt it to
your own organisation without needing to
reinvent the wheel.
Learn more:
To visit the site, click here.
To download the printable Risk Assessment
and Policy Template, click here.
Equipped / Tools for the Job / 33 Your Free Magazine from Fortress Learning
Positive Chaos and the Management of People
Guest contributor Wally Hauck introduces a way to not just tolerate but embrace chaos
as a way to reduce risk.
Chaos is often thought to be negative. Chaos
is confusing which makes it stressful. People
like clarity and avoid forced change because
they feel out of control. To achieve employee
engagement leaders in our knowledge based
economy must embrace chaos and make
sure that the chaos is positive not negative.
Positive chaos is an outcome of a clear set
of principles which are embraced and acted
upon. The use of clear principles that are
aligned with natural law will determine that
the chaos will be positive. The lack of clear
principles (or the misunderstanding of them)
creates negative chaos.
Negative chaos scares people. They don’t
like to be changed and they don’t like to be
told to change. This type of environment
creates fear, less desire to take risk
and therefore less innovation. The
responsibility for change lies with the
management or with the organisational
development consultant who brings his
or her process and set of rules. Senior
leaders decide everyone must change
and so a change initiative is born and
often added on top of all the other work
responsibilities people must juggle.
This is one reason why about 70% of
planned change efforts fail to achieve
the intended outcomes. Planned
change efforts are often doomed
from the beginning because the
responsibility for creating change lies at
Equipped / Positive Chaos and the Management of People / 34 Your Free Magazine from Fortress Learning
the top and is forced on those who “must
be changed.” The principles of this type
of change communicate management
knows best, people don’t know what they
need (management does), people don’t
like change and so they must be changed
through bribes or threats. I believe these
principles are contrary to natural law. These
principles are flawed and so people resist,
feel confused, and feel stressed.
Positive chaos operates under a different
set of principles. It embraces a high level
of trust and clarity. Positive chaos means
people are willing to adapt to change as it
happens based on their own perceptions
and decisions (experiments based on the
learning cycle) to serve a higher purpose.
They don’t have to be changed via threats,
bribes or other controlling means. They
willingly change their actions and procedures
as needed because they understand why
the change is needed and they have the
ability to make those decisions. They have
autonomy. They are trusted. They have the
skills to match the challenges they face. They
are given the choice about how to change to
serve their internal and external customers.
There is stress in positive chaos but the
stress is positive because it stems from the
desire to meet a challenge. The challenge is
to accomplish what is best for the customer
and the organisation and employees are able
to fully deploy their skills and their cognitive
energy to meet these challenges.
In an organisation that embraces Deming’s
Theory of Profound Knowledge, employees
have a greater probability of experiencing
positive chaos. The employees are entrusted
to follow specified processes. They
understand the unambiguous connections
to their customers and what their customers
need. They continuously look for ways to
make the pathway to their customer simple,
direct and improved. Their actions for change
are made in accordance with the learning
cycle of plan, do, study, act.
Knowing and utilizing this method fosters
trust throughout the organisation. Employees
and management don’t always understand
what changes are coming from their fellow
employees but they can be certain the
changes are consistent with principles which
will deliver the best for the organisation and
the best for the customer. This is positive
chaos in action.
Negative chaos means people are being
asked, told, threatened, or bribed to change.
Positive chaos means they are trusted
to adapt as they see fit to serve a higher
purpose (satisfy customer needs). They
maintain control of their own decisions
and they answer to their customer not to
their manager (or to the management).
Management supports their decisions
because those decisions are made for the
right reasons and with sound theory and
practice.
In our world of accelerated change the only
change that will endure is the one ruled
by positive chaos. Only those principles of
providing autonomy, trust, and expecting
people to respond positively by applying
their skills to the challenges they face will
keep us competitive.
Many thanks to Wally for sharing his insight
into application of Deming’s work to modern
work.
Equipped / Positive Chaos and the Management of People / 35 Your Free Magazine from Fortress Learning
Wally Hauck, PhD has a cure for the “deadly
disease” known as the typical performance
appraisal. Wally holds a doctorate in
organisational leadership from Warren
National University, a Master of Business
Administration in finance from Iona College,
and a bachelor’s degree in philosophy from
the University of Pennsylvania. Wally is
a Certified Speaking Professional or CSP.
The Certified Speaking Professional (CSP)
designation, established in 1980, is the
speaking industry’s international measure of
professional platform skill. CSP is conferred
throughout the International Federation for
Professional Speakers only on those who
have earned it by meeting strict criteria.
For 16 years his consulting firm, Optimum
Leadership, has consulted with dozens of
organisations and coached hundreds of
individuals in improving leadership skills,
employee engagement, and performance.
Wally’s clients include BIC Corporation’s
Shaeffer Pen Division, Blockbuster Video,
State of Delaware., Goodwill Industries, IBM,
Pitney Bowes, Sheraton Hotels, Boys and
Girls Village, Independent Living, Balfour, and
the State of Connecticut to name just a few.
Wally’s book explains a new leadership
paradigm that can help organisations
to make the shift they need to make to
improve employee engagement. Kirkus
reviews described “The Art ofLeading: 3
Principles for Predicable Performance
Improvement” as an “engaging, accessible
book that challenges the standard
paradigm of employee evaluation by
performance review by suggesting
the system in which the employee
works, rather than the employee, must
change…. A holistic, well-organized and
groundbreaking guide for managers in the
information age.”
Wally uses Dr. W. Edwards Deming’s Theory
of Profound Knowledge to assist leaders
to develop remove obstacles in the system
that block effective performance. Wally
is a professor of Organisational Change
and Development at the University of New
Haven in Connecticut.
Wally’s new book The Art of Leading: 3
Principles for Predictable Performance
Improvement is now available:
Wally’s Book Unleash Employee
Engagement: 7 Initial Conditions for
Outstanding Results is now available
Learn More:
Click here to visit Wally’s website.
Click here to learn about The Art of
Leading, Wally’s book.
Equipped / Positive Chaos and the Management of People / 36 Your Free Magazine from Fortress Learning
A Visual Approach to identifying Critical Steps
Everything we do is meant to be valuable. But, how do we identify those things that
are most valuable?
Your whole job is a series of tasks. Each task
involves a series of steps that get done in a
certain order and using certain resources.
The more tasks or steps, and the more
complicated things become.
And the greater the risk.
This is because for every step that needs
to be done, there is a chance of some sort
of error being made. Now, we all make
mistakes, and it is not usually a problem.
But, not all mistakes have the same level of
impact. If we know which steps, if not done
correctly, will have the greatest negative
impact, then we can put in place some extra
strategies to make sure that they do get
done the way it is intended.
Let’s look at an example.
Let’s say that processing a claim involves 5
steps and that 4 people are involved. Some
steps just involve one person. Other steps
involve more than one person.
It could look something like this:
Equipped / A Visual Approach to Identifying Critical Steps / 37 Your Free Magazine from Fortress Learning
Person 1
Step 1
Step 4
Step 2
Step 5 Step 5
Step 3 Step 3
Person 3Person 2 Person 4
TASK
2
So, which steps are most critical?
Well, that depends on what each step is. But,
if all steps are equal in value, then we can
see that if Step 1 is messed up, then not only
are Steps 2-5 going to be messed up, so too
are three other people. The risk then is loss
of productivity for the people involved in the
rest of the steps.
But, in the real world, not all steps are equal.
Some are really quick and simple, but others
are quite complex and costly.
This is where we can use a scoring system
to work out which steps are most critical.
Obviously, they all are, but which ones do we
really need to take care of?
One way to do this is to think of it in terms of
the contribution of each step to the overall
Benefit of the Task. After all, there is a reason
the Task gets done. So, I just allocate 100
points to be shared across all steps.
Step Benefits
1 15
2 10
3 65
4 2
5 8
If all Steps were equal in terms of Benefits,
then we would just give them each 20 points
for each Costs and Benefits. But, that is not
likely to happen.
Using this approach, it is clear that Step 3 is
the most critical because it alone makes up
for more than half the value of the Task.
If we flip our thinking around, we then also
see that the greatest Risk exists as Step 3,
because some sort of loss at this point will
have a substantial negative effect.
So, for me, this exercise shows me where
I need to place emphasis on training to
make sure that the people involved in
Step 3 understand how critical it is to the
whole Task and how to perform the Step
consistently.
I would also be focusing my supervision
efforts on this Step, and would make sure
that monitoring its consistent execution
became a part of my routine.
To extend this method, I could also allocate
scores based on the total input costs of each
Step so I can work out where our money
is being spent, and from that decide if
perhaps it could be better spent. Using the
above numbers as a guide, I would be very
concerned if Step 4 scored very high at all,
since it accounts for only 2% of the total
Benefit.
We can also tie all the Steps of all Tasks
together to better visualise the connections
between one Task and all others. This is
really worthwhile to be able to predict the
effects of changes, where you can follow
the arrows through all other Tasks to see
just what (and who) will be affected. It is
only when we understand fully these effects
of our actions can we make decisions with
confidence that will benefit the whole
organisation.
Equipped / A Visual Approach to Identifying Critical Steps / 38 Your Free Magazine from Fortress Learning
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Dr Bryan West
Editor and Publisher, Equipped
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Equipped / Share & Follow / 39 Your Free Magazine from Fortress Learning
Thank you to the people who contributed
in some way to this edition of Equipped,
including our guest contributors and the
very clever people whose images are used
throughout the magazine. They are listed
here by Flickr username:
1. eschipul
3. kevin dooley
5. Shoes on Wires
6. Lucy Nieto
7. ...-Wink-...
8. Werner Kunz
9. Pink Sherbet Photography
10. decar66
11. ...-Wink-...
12. seiho
13 marfis75
14. Pink Sherbet Photography
16. Wonderlane
17. mikebaird
18. Håkan Dahlström
19. monkeyc.net
20. Werner Kunz
21. seier+seier
22. - Dave Morrow -
24. Kay Gaensler
25. kevin dooley
27. mikebaird
28. Garry
29. Nicholas_T
31. Todd Baker
33. mikebaird
34. Nomadic Lass
35. marfis751
37. gnuckx
39. faith goble
40. laszlo-photo
41. seier+seier
Attributions
Equipped / Attributions / 40 Your Free Magazine from Fortress Learning
