top of page
Writer's pictureKerrie Smit

Risk in Change: Mitigation through Intelligent Failure

Updated: Jan 16

Scene from 1944 film Gaslight
Charles Boyer and Ingrid Bergman in the 1944 MGM thriller ‘Gaslight’

Gaslighting is now a term in common use, it's even in the dictionary. But if you need a quick refresher - it's a form of abuse where perpetrators establish an environment designed to pull their victim into emotional downfall, and manipulate them into questioning their own sanity when they respond according to their environment.


Established as it is in general culture, it's now growing in use in reference to organisations.


An organisation might be considered to be gaslighting when it sets a policy agenda that is ambiguous, or impossible to control, and holds its staff accountable to it. An example being the statement: We encourage our staff to take acceptable risks.


Advocacy for Risk Management


Many organisations are not great at formalised risk management yet it can hold the gold that allows processes to forge ahead. In both business-as-usual and change environments, when leaders are comfortable with risk management, and good at applying it, they are able to implement unhindered.


Implementation can continue full steam ahead, while the worry of everything-that-could-go-wrong is properly parked in the risk register.


Once in the risk register, what's keeping you up at night becomes a team effort. Teams that are great at risk regularly discuss it, workshop it and mitigate it.


What's keeping you up at night?


It's tempting to run at our worries, stir up the horses, put seven different people on to the same problem. This might feel like we're doing something about our big business challenges, but what are we actually achieving?


If you were given a complex maths problem to solve, chances are you'd write it down, reduce the problem into its known components (numbers) and apply known strategies to solving it (formulas). Unless you were a maths genius, you probably wouldn't attempt to solve the problem in your head; and you probably wouldn't start with a bunch of phone calls, meetings or emails.


Our brains have evolved to handle a variety of cognitive tasks, including rapid problem-solving and adapting to new situations. However, as we know the complexity of certain problems, and the desire to communicate our thoughts effectively can make writing things down a far better strategy. Writing allows us to externalise our thoughts, reduce cognitive load, and leverage the visual and spatial aspects of viewing the information on a page.


Magic happens when we get the problem out of our head and start applying physical action to the mental task. Similarly to a complex maths problem, documenting risk, sorting it into its known components (threat, impact, severity) and apply the strategies we already know about (controls, mitigations, monitoring, continuous improvement) enhances clarity. Documenting risk provides the benefit of time-stamping and creating data points that will allow businesses to improve prediction and problem solving longer term.


"You’re slowly and systematically being driven out of your mind." – Quote from the 1944 film, Gaslight.

The compounding effect


In the problem review of many a catastrophic failure we may find not one single point of failure, but many points at which one problem compounded another. We only need to think back to Covid 19 for reminders about how some regions faced compounding challenges, including delays in recognising the severity of the virus, inadequate testing and contact tracing, misinformation, lack of governance and issues with vaccine distribution.


The problem with not understanding our small risks is that they can compound. Multiple factors, when combined, can lead to significant failures and result in serious events and crises. Behind the cluster-fail will be a chain of compounding problems underscoring the importance of addressing not only the various immediate issues but also the underlying systemic and organisational issues.


But then the problem becomes that underlying systemic and organisation issues are "underlying"; we generally only get to them by digging them up.


In the Toyota Production System, front line employees are able to pull the Andon Chord whenever they see a problem. They're empowered to do it. The supervisor will get together with the employee and discuss the problem. Most times, the production line doesn't need to stop. But one time in 12, it does. The cost of the 11 times might be thousands of dollars per event, but the benefit of avoiding the problem on the 12th time clearly outweighs the cost for Toyota.


Toyota would not get to the 12th Andon Chord pull without the preceding 11, and without the encouragement for front line staff to pull the chord being a genuine one.


"Acceptable Risks" is Unacceptable


Studies in risk management show that teams who feel confident reporting problems and who engage in active reconstruction and post-event analysis, report higher levels of problems, risks and failures. But these are higher performing teams than those who superficially report fewer failures. It's not the amount of errors that are fewer, its that the propensity to report error is higher in the absence of overly negative consequences.


In other words error rates aren't necessarily different in higher-performing teams. Errors are reported more accurately in the confidence that information about problems, failures and risks is a good thing to have, and self-reporting does not lead to punishment.


Taking risk seriously means empowering staff with the policy and process knowledge of how you want it done in your organisation. Making vague statements like "acceptable risks" is increasingly seen as gaslighting and has the potential to set up a staff member for an uncertain reaction when a problem is reported.


Seeing risk management as an enhancement to agility is the first step. Recording the risk and managing it through formal processes can allow the risky action to still be undertaken concurrent with the risk assessment team taking action to mitigate it.


Vague risk tolerance definitions are no longer acceptable to a growing cohort of staff and professionals. Clearly defined problem identification, analysis and resolution policies make the workplace safer, smarter, more sincere and more successful.


Intelligent Failure and Mitigation


Risk mitigation is all about finding a way to diminish or exclude the impact of a risk should it eventuate. In other words, don't experiment in the live environment, mitigate through intelligent failure instead!


Don't take your brand new product to market to test it there: take it to market research first. Why fail publicly in a way that may damage your brand or make you appear to be unsuccessful in the market?


Don't load up system changes to your live production system, test them first in a cloned environment. Why risk breaking integrations, creating data problems, other unthinkable nightmares and subsequent outages? I mean, why???


If your new product, system, plan, idea doesn't work in a test environment, chances are it won't work in the live environment. Failing intelligently means anticipating failure and doing it in a controlled setting where the results can be recorded and inputs can be iteratively altered until the idea works.


Back to the Drawing Board?


Even though some might view it as an anchor around the neck of agility, experiment to see whether risk management is the opportunity you've been looking for. Testing and prototyping, though expensive, could be the perfect mitigation to your risk: perfect because once its been tested you know it will work. Instead of a vague approach to problem and failure management, a documented risk tolerance and risk management practice based on research protects everyone and encourages higher performance. Failing intelligently means succeeding publicly.


Agencia Change is an online change and communications agency with experience in foreseeing and navigating likely change risks, development of contingency plans and resistance management. For help with your business and change governance issues, click the link below.



Recent Posts

See All

Comentarios


bottom of page