You are a Risk Manager and a CEO of your life.
Keep a Diary of Risks for Personal, Small business, Big business is necessary to clear your mind from lots of things to do.
Learning from 'Fire-Fighting' problem, what is not written, is as good as forgotten.
Risk Management Planning can be simple or complicated.
If you focus the Why we need manage risk and the question of What and How to do it, will become easier.
This presentation slide is prepared for a 45 minutes talk to a group of fellow professional trainers in the process of learning. At the end of the session however, the group leader make a remark that she does not understand what I am selling or what is the next action do I want the audience to take. So, version 2.0 of this presentation is coming along soon.
8. Safety
Defence Risk is the potential
that a chosen action or
Medical activity (including the
Engineering choice of inaction) will
lead to a loss (an
Operation undesirable outcome)
Project
9. Risk May Be Future
Issue Certain Future
Problem Now
21. 1. The disproportionate
role of high-impact,
hard-to-predict, rare
events
2. The non-
computability of the
probability of the
consequential rare
events
3. The psychological
biases that make people
blind to uncertainty
22. Pop Quiz
2007196911121972
20 07 1969 11 12 1972
What did Eugene "Geno" Cernan did
on 11 December 1972
Last man on the Moon on Apollo 17
32. 3 Parts 5 Steps
Risk Assessment
Review Context
Report
Risk Register Evaluate Identify
Risk Management
Plan Analyze
33. Risk Assessment
1. To CRO, Senior Management or Board
2. Status of operation or project
3. Assumptions that remains right or otherwise.
4. List of High Risks.
5. List of Critical Risks or risks which have turn
into Problem.
6. Status of Control and Responses to risks.
34. Risk Register
1. How much are the financial exposure?
2. What are the High and Critical Risks?
3. How much control do we have?
4. How should we respond to the risks?
5. What can we do to improve control?
6. What are most urgent and important action
that we need to take right now?
35. Risk Management Plan
1. What is the project about and objectives?
2. What are the assumptions ?
3. Who are the project team members?
4. What macro uncertainties do we have?
5. When and how are we going to identify
micro uncertainties?
6. What do we do when Risks turn into
Problem?
36. 1. Risk Management Plan
What do we have? Whatever.
What to do? Just do it.
When to review? Why review?
37. 2. Risk Register Concept
1. Context When, Where
2. Identify List, Cause, Source
3. Analyze Likelihood x Impact
4. Evaluate Weak / Maybe / Good
5. Review …
38. Risk Register Template
Risk Description Likelihood Impact Contol Effect Priority
Late for office due Likely Moderate Set alarm Loss of NU / NI
to bad traffic clock at income
causing discipline 5.30am
problem at work
Store caught fire Unlikely High Install fire RM10k U / NI
due to inadequate alarm, smoke
fire safety sensor and
measaure causing fire
loss of stock. extinguisher
Factory flooded Rare Extreme Business RM10m NU / I
causing lack of raw Interuption
materials and Insurance
completed
products not able
to be exported.
You are a Risk Manager and a CEO.Share - Keep a Diary of Risks for Personal, Small business, Big business.Fire-Fighting' problem = What not written, forgotten.Overview of Risk Management Planning Can be simple or complicatedDepends on needs.
What from time to time happen.Business Example: Stadium Terengganu, Jaya Supermarket collapse, Sime Darby loss in middle east, Bakun Dam.Nokia, BlackberryPersonal ExampleCredit card backrupcies, career promotion, health.
Choice we should make:Fighting Fire, like a fireman; NotFire Fighting, like many politician and managers
Al Gore ask us to be prepared for some future inconvenient truth.But, who knows? We are often wrong and often right. Is the future an act of randomness.Would things remain as they are today?
Blind to Risk and Fire Fighting,started as a baby.What do we know about the future?A baby born today, would retire in 2072.Would the past 50 years repeat. How do we educate our kids.Would the next 50 years requires new way of looking at things and doing thing
Baby born today, in 30,40 or 50 years, would be a CEO or a Professional Trainer.Work for money and power?Work to help people make money, and himself make money?Motivation to improve must start with clarity and daily awareness of risk management planning.
Definition of risk differs among different field and to different people.
Differences of Risk, Issue and Problem
About objectives
Apple business vision starts with question of why they do what they doing, while most businesses focuses on what they have to sell and how to do better.Company which manage risk with a clear and strong belief of why they are in business, does not have to work too hard at how to deliver and delivering what they have to the customers.
We too often focus on What and How to do, but neglect Why. (Simon Sinek)To have control over risks.To expect the unexpected.
Why keep a Diary of Risk?Small brain capacity. Work best one at a time, first thing first (Steven Covey)Overconfidence and Hindsight Bias = We could not explain the past very well. On hindsight, we should have known better.Clear the mind of cluttered and have clarity
Learning froms history, we creates goals, objective, life purpose, passion for a better life. Give us hopeBetter tomorrow
Being confidence and optimisticWe set great Project and business objectives
Being confidence and optimisticWe set great Project and business objectives
With lack of clarity > Murphy Law.Not lacking with very smart peopleEnron, AIG, Blackberry, cow farming, cleanliness …Despite our preparation and reasonable care, whatever can go wrong will …
Manage RisksRisk will turn into issue and into problemNo choiceShare troubles with others.
We have small brain to consider and forget about 3,000 years history.Reducing conflict.Sharing of problemPenalty for being unfair to other people.
Prefrontal cortexWe can think big, but best one at a time.Decision and imagination.Like a small meeting room to a stadium.
Managing risks is not always easy, Some risks are very rare that we don’t what to think about it, Impact of some risk can very severe to bankrupt companies and countries.ThinkWorld War 1 and 2.September 11Financial collapse US, Greece, Slbpain, IcelandNassim N Taleb, mathematically demonstrated that many of our success are sheer act of randomness.The disproportionate role of high-impact, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance and technologyThe non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities)The psychological biases that make people individually and collectively blind to uncertainty and unaware of the massive role of the rare event in historical affairs
Optimism Bias = The belief that the future will be much better than the past and present.Something will happen to somebody else.We are careful, they are not.Optimism Bias it good and bad.Causes us to ignore, procrastinate. Give us hope.
Brain rules Our brain not wired the same way. We have to customize for individual. We think differently when we are tired, lack of sleep, Men and women don’t think alike. We don’t like boring things.Your Brain at Work Our brains can easily get overwhelm.Work best one at a time.
The questions is designed to show:We can see better, when things are organizedWe remember the 1st but not 2nd.The first Moon landing mission was Apollo 11, during which—on July 20, 1969—Neil Armstrong and Buzz Aldrin became the first people to set foot on the Moon. Six missions landed in total, numbered Apollo 11–17, excludingApollo 13. Altogether twelve men walked on the Moon, the only humans to have been on an extraterrestrial body.
Balancing needs for simplicity so that our brain can understand with complexity of the business that we are doing and the risk we are facing.Managing risks means, prioritizing what are urgent and important with what are not. With that we can better allocate our limited time, energy and money.
The amount of control that we have over likelihood and impact Our other choice would beleaving it other people and leaving it to fate
The amount of control that we have over likelihood and impact Our other choice would beleaving it other people and leaving it to fate
ControlEasiest to accept.Depends on likelihood and impact.What do need to do to reduce uncertainty, surprises and pains.Accept risks which have small consequences.Share with other people, opportunities in case it turn into problem or opportunityInsurance, out source.Avoid getting close to risks which may be too big for us to handle.Don’t borrow to much expecting increasing income.Don’t lie, cheat, or be selfish people, alas you make unnecessary enemy.Don’t set too high expectation from yourself, alas your be stressful all the time.Reduce small problems which keep coming up. Forgeting where we put our keys.Getting up late in the morning.Being unprepared for meetings.
What:Standard: ISO 31000 or PMI PMBOK Guide3 Key documents are produce?
In business, managing risks involved 2 partsDocumentation of risk for communication with other people and your bosses.Process of risk identification according to accepted standardRisk cannot be managed by one person.When we fail to make other people understand, we fail to manage.
Fireman spend 90% of their time, preparing, training and doing drills.When working together during time of stress, everybody know what are their roles, what each of them need to do and know what tools to use to deal with problem facing them.
Just like the discipline of successful people, in keeping journals and diary, you would like to put your risks in writing.Document call Risk Register is used to understand context for risk, source of risk, to analyze consequence, evaluate response options, and to review events as time goes by.
We cannot manage Risk by ourself. We need help from other people, before we can help others.High risk = Often and Expensive or DamagingCritical risk = Difficult or complex to overcome.Problem = What is important is to know how much control do we have over problem and be prepared for it.
@30 minutesSuccess Learning from Apple, risk management is for everybody, individual, small and big organization.Challenge what can and cannot be done.Goal of helping people have better things.
Ask yourself how you can use risk management, becauseYou want be clear why are doing what you do.Apple want to challenge and change the status quo of what can be done. You want to be clear how to do what you want to do.Apple want to produce beautiful, creative, simple, easy to use products.You want be in the right direction, doing whatever you are doing so that people will want to buy your idea or service.Apple only have 5 product lines. Mac, iPhone, Ipad, Ipod and Itunes.
What is Diary of Risk for Business:Risk Management Plan or PolicyRisk RegisterRisk Assessment ReportHowEstablish Context and List uncertainties and it effect.Analyze likelihood and impact.Evaluate control and prioritize & reviewWhyWe have small mind > cluttered.We want clarity and peace of mind.We want to help ourself and a better world.
Obviously, I am not a master of risks, yet.We must do our best, try to improve and work together with othe people.If we learn anything from the story of the Titanic or the Babylonian, risk management is age old planning idea, which we tend to relearn from time to time.