The document discusses different types of problems including 'tame', 'messy', and 'wicked' problems and how their complexity relates to approaches for risk management. It also examines the differences between management and leadership strategies for addressing uncertainty and ambiguity depending on the problem type. Effective risk management requires qualitative approaches for 'wicked' problems with high behavioral complexity and ambiguity.

1. “Risk Leadership” in a world of
uncertainty and ambiguity
APM Risk SIG Conference
26th March 2019
Dr David Hancock MBA
Construction Director, IPA, Cabinet Office

2. The general perception amongst most project and risk managers
that we can somehow control the future is one of the most ill-
conceived in risk management. The biggest problem is how to
measure risks in terms of their potential likelihood, their possible
consequences, their correlation and the public's perception of
them.
However we have made at least two advances in the right
direction. Firstly we now have a better understanding about the
likelihood of unpleasant surprises and more importantly we are
learning to recognise their potential occurrence early on and
subsequently to manage the consequences when they do occur.
Tame, Messy & Wicked Risk Leadership 2010

3. Complicated v Complex
from Latin complicat- ‘folded together’,
from the verb complicare,
from com- ‘together’ + plicare ‘to fold
from Latin complexus,
associated with ‘plaited or woven’
“Practically speaking, the main difference between complicated and
complex systems is that with the former, one can usually predict
outcomes by knowing the starting conditions. In a complex system,
the same starting conditions can produce different outcomes,
depending on the interactions of the elements in the system.”
Predictable upfront
Deterministic Outcome
Predictions Inaccurate
Non - deterministic Outcome

4. SURFACE RISK
DEEP RISK

5. Surface Risk
Risk Definitions
Heat Maps
Likelihood x Consequence

6. Risk Definitions
Effect of Uncertainty on Objectives. - Both
positive and negative
ISO 31000:2009 and BS 31100:2008
The uncertainty of outcome, whether positive
or negative threat, of actions and events. It
is the combination of likelihood and impact,
including perceived importance.
(UK HM Treasury 2004)

7. L
I
K
5
E
L
I
4
H
O
O
3
D
2
1
1 2 3 4 5
SEVERITY
Legal Impact
1 Improvement notice
2 Prohibition notice.
3 Prosecution with fine.
4 Directors charged with Corporate
killing, fraud etc..
5 Directors charged with Corporate
killing, fraud etc..
Reputation Impact
1 No press coverage
2 Minor, local reputation damage.
3 Major, local reputation damage.
4 National adverse media coverage.
5 International adverse media coverage
Financial
1 £ thousands
2 £ tens of
3 £ hundreds of
4 £ Millions
5 £ tens of millions
thousands
thousands
Descriptor
1 Improbable
2 Unlikely
3 Less likely than not
4 Likely
5 Probable
Likelihood
Descriptor
1 Minor
2 Moderate
3 Significant
4 Substantial
5 Catastrophic
Impact
Output Targets
1 Exactly meets targets
2 Significantly meets targets
3 Meets 50% of targets
4 partially meets
targets
5 Does not meet
targets
Health & Safety
1 Negligible injuries
2 Minor injuries
3 Major injuries
4 Single fatality
5 Multiple fatalities
Schedule
1 Day
2 Week
3 Month
4 Year
5 Years
Scoring and Traffic Light Notation

8. Deep Risk
Quantitative v Qualitative
Deductive, Statistical Prob & Estimates
Roulette or Poker?

10. Problem Areas for Risk practices
Wicked
Messy
Tame

11. Problem Solving
Problem
Solution
Time since beginning
Gather Data
Analyse Data
Formulate Solution
Implement Solution
“TAME” Problems can be solved
by linear or “waterfall” process

12. Systems Complexity
n Clusters of interrelated or interdependent
problems
n Messes (Ackoff 1970)

13. “MESSES” meet the following criteria:
Organisational Complexity - clusters of interrelated
or interdependent problems, or systems of problems.
Messes are puzzles; rather than solving them we
resolve their complexities.
Cannot be solved in relative isolation from one
another.

14. Behavioural Complexity
n Conflicting social ethics and beliefs
n ‘Wickedness’ (Rittel & Webber 1973)

15. “WICKED PROBLEMS” are
characterised by:
An evolving set of interlocking issues and constraints - no definitive statement
of the problem (no understanding of the problem until the solution has been
developed).
Many stakeholders - the problem solving process is fundamentally social (getting
the right answer is not as important as having stakeholders accept the solution).
The constraints (resources, politics) change with time - stakeholders come and
go, change their minds or change the rules.
Since there is no definitive Problem there is no
definitive Solution.

16. Problem
Solution
Time since beginning
“WICKED” Problems cannot
be solved by linear or
“waterfall” process

17. Wicked Problem Solving
Resolving “WICKED MESSES” is
“SATISFICING” (H. Simon 1956)
• Because of the number of stakeholders, changing constraints and dynamics
of the problem, there is no ideal solution-it is “as good as it gets” or “good
enough”
• The Problem solving process ends when resource (time, money energy etc.)
runs out!
• Therefore we need a different approach when handling risk with respect to
problems which are not Tame

18. Boston Matrix
Behavioural
Complexity
Low
High
Tame Mess
Wicked
Wicked
Mess
(Complex
Adaptive
Systems
Dark Risk
Resolution is social/
political/ ethical/
moral/ behavioural
Surface & Deep
Risk
Solution is
Scientific
Dynamic Systems Complexity
HighLow

19. n Projects are stand alone, unique, transient
undertakings and are measured against the project
management plan in terms of the time, cost quality/
performance triangle.
n Programmes are interrelated or interdependent
projects contributing to a common strategic
objective defined in the business plan.
n Portfolio is the total of all projects and programmes
and includes business as usual activities.
Projects, Programmes &
Portfolios

20. Projects (Tame) and
Programmes (Messes)
Project Manager
n On Time
n On Budget
n On Quality
Programme Manager
n Balancing the projects in the programme
n Managing resources across boundaries
n Bring collectively to completion
n Trading between projects for optimisation

21. Portfolios (Wickedness)
Portfolio Manager
n Align and monitor projects to company
strategy
n De-scope or stop projects no longer
aligned
n Manage permanent and temporary
resources
n Liaise with and satisfy stakeholder’s
requirements
n Pre-empt future requirements
n Horizon scanning and scenario planning

22. Boston Matrix
Ambiguity
High
Low
Wicked Wicked
Mess
Tame Mess
Resolution is social/
political/ ethical/ moral/
behavioural
Solution is Scientific
Uncertainty
HighLow
Projects Programmes
Portfolios ?
Politics
Philosophy
Psychology ?
n Effect of uncertainty on Objectives. - Both positive and negative
ISO 31000:2009 and BS 31100:2008
n The uncertainty of outcome, whether positive or negative threat, of actions and events. It
is the combination of likelihood and impact, including perceived importance.
UK HM Treasury, The Orange Book, 2004
RISK

23. Dark Risk
Randomness
Epistemic & Aleatoric Uncertainty
Resilience

24. Redundancy & Resilience

25. Bump, bump, bump
“Here is Edward Bear,
coming downstairs now,
bump, bump, bump, on
the back of his head,
behind Christopher Robin.
It is, as far as he knows,
the only way of coming
downstairs, but sometimes
he feels that there really is
another way, if only he
could stop bumping for a
moment and think of it.”

26. Leadership v Management
(J. Kotter 1990)
Management
n Planning and Budgeting
n Organising and Staffing
n Controlling and Problem
Solving
Leadership
n Establishing a direction and
developing a vision of the
future
n Aligning people (Stakeholders)
n Motivating and inspiring
“Leadership and management are two distinctive and complementary systems of
action…… Both are necessary for success in an increasingly complex and volatile
business environment.”
Produces a degree of predictability
and order and manages uncertainty Produces radical change and
manages ambiguity

27. Resolving Wicked Problems
Diversity (of thought)
Use of Non Executive Directors
Scenario planning & Horizon Scanning
Leadership v Management
High Performing Teams

28. Management Response
Tame
n Collect sufficient data to
identify trends and
indicators
n Pick the best response &
Implement
n Command & Control
Messy
n Collect sufficient data to
identify trends and indicators
n Deliberate on information
collected use expertise to
chose appropriate response
n Motivating and inspiring
Produces a degree of predictability and order
able to manage uncertainty by application of
process and command & control in a
corporate centralised function

29. Management Response
Wicked
n Design small scale actions to
see how they respond in reality
n Identify patterns and select
what feels the right thing to do
n Carry out actions that enhance
good outcomes and reduce
poor outcomes
n Failure is an option for learning
Wicked Messes
n Design small scale actions to
see how they respond in reality
n Identify patterns but understand
they may not be scalable
n Carry out actions that enhance
good outcomes and reduce
poor outcomes monitor closely
for unintended consequences
Manages chaos and ambiguity based on experience lessons learnt from similar
situations both good and bad. Failure is an option for positive learning
Control must be decentralised and senior leaders given autonomy over outcomes

30. Risk Management
Behavioural
Complexity
High
Low
Wicked Wicked
Mess
Tame Mess
Resolution is social/
political/ ethical/
moral/ behavioural
Solution is
Scientific
Dynamic Systems Complexity
HighLow
Increasing reliance
on Qualitative Risk
Increasing reliance
on Quantitative Risk

31. SURFACE RISK
DEEP RISK
The part of risk that includes random events and behavioural complexity
Probability x Consequence Deductive Probability
Tame Problems Directly Perceived Risk
ISO 31000Orange Book
David Hancock 2017

32. Arcadia by Tom Stoppard (1993)