At least acknowledge the “school solution”

“School solution” is a military-phrase for the standard way in which one would approach a problem or scenario.  While the phrase often is applied pejoratively, it doesn’t have to be so.  In fact, sometimes I wish I heard more folks at least make a gesture towards such standards.

This concept came to mind when I reviewed a proposed risk management process for our transformation program.  While the basics were OK, there were a few indications that the author didn’t know the school solution.  For example, every response was assumed to be “mitigation”.  The proposal also assumed that the risk evaluation would be a “one and done” process… he seemed surprised that we wanted reviews more frequently than quarterly.

There are valid reasons to structure a risk process in a way that doesn’t go strictly by the book.  For example, I can see using a different review cycle for risks where mitigation is the response than those risks one is accepting.  But please show me that you’ve read the book before you propose that we re-write it!

Psychology and Risk

Continuing the risk theme from yesterday’s post

I saw a nice little post (here), that uses an example from the world of NCAA basketball office pools to great effect.  Many of us are willing to brush off easy opportunities to lock in gains — insuring winnings via a hedge in this case — while at the same time spending precious time to pinch a penny or two. 

Jeff summarizes how our thinking betrays us here:

Our experience, observing scores of friends and pool participants in these situations, is that they stick with their original entry. They may think that it is “unlucky” to hedge — a silly notion since they are locking in a set amount. They may think that it does not matter, since they are in for a nice prize either way.

True enough. The $300 difference may not seem like much when viewed in terms of the overall prize. In a few days, however, when the contest has been forgotten, the result of the game will have a net effect of $300 in actual spendable money. A week later, the winner will be making decisions about saving a few bucks in amounts much smaller than $300.

Why we resist risk mitigation

As my wife and I looked at our relocation, one of our biggest fears was that we would not find satisfactory housing quickly.  It had taken six months of sustained househunting to find our current home, which we ended up building (it was part of an established development).  Our experience led us to worry that our 60 days of temporary housing coverage would leave us stuck renting in Evansville — while also potentially paying for a Rhode Island mortgage — until we found a place.

Therefore, we put some mitigation steps in place.  For example, I used frequent “stayer” points from Marriott and Hilton for our first fews weeks of housing.  We also waited to book temporary housing until after we found a house and our offer was accepted.  We will close next week, so therefore it appears that we have not only mitigated the risk, but avoided it altogether.  However glad I am that this risk went away — or has become very small — I’m not very satisfied by the result.   I felt like I had unnecessarily burned points that I could have used for vacation. 

This experience has given a much better feeling for why some types of risk response get short shrift.  In particular, there isn’t much glory in risk mitigation that lowers the probability of an event.  Sure, one can feel happy about stacking sandbags to stop a flood from damaging one’s basement.  There’s a sense of accomplishment in sticking a finger in the dam, shoring up the wall, etc.

But what about preventing the flood in the first place?  Does anyone appreciate that approach as much?

Explaining “Speed vs. Thoroughness” trade-offs

I was asked recently about how to balance quick delivery vs. complete (or enough) scope.  Unfortunately, my initial answer sounded lame even as I was explaining it… I later remembered a better example of how to aim for “quick-but-real” wins while planning and executing broader and deeper solutions to the issues at hand.

Such trade-offs are, of course, the life-blood of managing initiatives.  And, of course, one may will have to spend a bit more in resources to get speed and thoroughness (that pesky triple constraint… here and here).  But there’s also the risk management angle to consider.

In particular, the ability to deliver on both “fast” and “thorough” tracks is essential in organizational or business change projects.  Properly targeted and communicate “quick-but-real” deliverables are excellent responses to the risk of poor or no acceptance by stakeholders.  This approach is a way of buying cheap insurance (I know, I know…insurance is a different response type technically) against much bigger risk impacts down the road.

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