increasing risk management prowess as much art as science
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Quality Revolution … Evolution. Increasing Risk Management Prowess As much art as science. Session B10 Paul Armstrong, PE, LSSBB, CMQ/OE [email protected] 412-401-7057. Objectives. See the brilliance of the expert’s perspective of “management” - PowerPoint PPT PresentationTRANSCRIPT
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
1
Quality Revolution … Evolution
Increasing Risk ManagementProwess
As much art as science
Session B10Paul Armstrong, PE, LSSBB, CMQ/OE
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
Session B102
Objectives• See the brilliance of the expert’s perspective of
“management”• Balance the science of risk analysis with the art of
risk intuition• Adopt a fresh attitude when improving risk
management in project and operations management
• Use risk management as a team learning opportunity
In other words… increase our…Prowess: skill or expertise in a particular activity or field; bravery in battle.
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
Session B103
Agenda
10/11/13
Quick Overview of Risk Management
Basics Struggles with Risk Management in Real Life
Struggles because of Tool Addiction
Struggles due to “Managing Risk”
The Expert’s Insight !
Risk PredictionThe tacit knowledge,
intuitive first step
Ideas for improving prediction intuition
Some collateral benefits!!
PROWESS
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
Session B104
The Basic Components
10/11/13
Probability Likelihood
Severity Consequence
RISK
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
Session B105
The Dynamic Aspect of Severity
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
Session B106
The Basic Process
10/11/13
Risk Mgmt
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
Session B107
Tool Intoxication
Why our inner geek relishes Risk Management• Databases• Matrices• Risk Breakdown Structures• Statistics
Notice that these focus on everything EXCEPT identifying risk.
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
Session B108
Risk Misunderstood• Real examples of “Risks” heard from industrial
project teamso Weathero Holidays o People not knowing their jobo Not enough moneyo Not enough time
• The red herring of Drastic Consequences o Monsters under the bed
Risks present a problem, BUTDon’t Confuse Problems with Risks
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
Session B109
What Would the Expert Say?
Management is Prediction
10/11/13
Which of these is NOT a prediction:
Consequence
Likelihood
Detectability
Is Prediction an Art or a Science?
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
Session B1010
Prediction
“…arts and sciences are branches of the same tree. All these aspirations are directed toward ennobling man's life, lifting it from the sphere of mere physical existence and leading the individual towards freedom.”
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
Session B1011
Risk PredictionThe Science The Art
10/11/13
ProbabilitySeverity
Experience
Proven PeriodicityHistorical Data
Descriptive Statistics
LikelihoodConsequence
Inferential Statistics
Future ≠Past
In God we Trust…all others bring data
most important figures for management …are
unknown and unknowable.
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
Session B1012
Risk PredictionExplicit Knowledge Tacit Knowledge
10/11/13
ProbabilitySeverity
“What is, What was”
Analytical Methods
Tools
LikelihoodConsequence
Intuition
“What could be, what might be”
Creativity
How do you improve
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
Session B1013
Improving Tacit Knowledge
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
Session B1014
Improving Intuition
How does our brain develop intuition?
Lot of repetitionsLots of experimentation
Salami slice sampling
It’s naturally programmed into us…it’s called play.
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
Session B1015
Ok…how do we “play”?• Scenario testing
o Develop life like scenarios and let folks play them out.o Have them observe their thinking and their conversation
• Scrimmaging o Execute the situation first for practice…then do the the
game films. This requires a safe space.
• Use actual gameso Resource planning games develop our skills to see a
system, balance trade-offs and evaluate our risk prediction prowess.
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
Session B1016
Team LearningRisk Prediction opens the door for Team Learning…how?• Suspends Assumptions• Gets the conversation focused
on the future• Allows for prioritizing topics
Provides a path for improving the team’s TACIT knowledge…scrimmaging and simulating via deep dialogues.
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
Session B1017
Summary
10/11/13
Keep in mind… Management is Prediction,
Prediction is Art and Science
Put as much energy in improving your prowess in the ART of Risk Management as in the science.Improve your tacit risk prediction prowess as you’re naturally programmed to… via simulation and scrimmaging…ok, play.
Use Risk Prediction and Management as a way to improve true Team Prowess… it’s naturally forward focused and tests what we believe vice what we know as an organization.