Episode 484: Project Risk Management (Free)

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We welcome Dr. David Hillson to look at project risk management for business leaders and project leaders through the metaphor of a risk hurricane, which David introduced in his book Taming the Risk Hurricane.

Risk management has become a standard part of the strategic tool kit, providing senior leaders with a forward-looking radar to scan the future and give early warnings of approaching threats and opportunities. However, even best-in-class organizations can falter in the face of extreme risk exposure. Special circumstances demand special responses, and extreme risk exposure needs very careful handling. Routine risk management approaches will fall short, but businesses that demonstrate a high degree of flexibility and resilience will have the competitive advantage and the ability to thrive where others fail.

The causes and consequences of meteorological hurricanes have parallels in the way uncontrolled risk exposure can develop in organizations. Both are caused largely by predictable factors, but both are characterized by sustained uncertainty and severe impact once they develop. If we can learn to predict a risk hurricane, prepare for it effectively, and survive its effects, then our organizations will be well placed to address the challenge of extreme risk exposure, if and when we are unfortunate enough to face it. 

This episode was recorded as a live stream on Facebook and YouTube.

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Episode Transcript

Below are the first few pages of the transcript. The complete transcript is available to Premium subscribers only.

Video Introduction

Cornelius Fichtner: In this episode, we look at risk management for project leaders with Dr. David Hillson, author of “Taming the Risk Hurricane.”

Hello, and welcome back to The Project Management Podcast™ at www.pm-podcast.com. This is the live stream for Episode 484 and I’m Cornelius Fichtner. Thank you so much for joining us.

For those of you who are accessing this episode recorded and not live, please do remember that this is a video episode. So, if you are only getting audio then please look for the Play Video episode link in your Podcast app or simply visit www.pm-podcast.com/484.

Video Presentation

Cornelius Fichtner: Yeah, so, what is this episode going to be about? Risk management has become a standard part of the strategic toolkit. It provides serious leaders with forward-looking radar to scan the future and give an early warning of approaching threats and opportunities. However, even best in class organizations, they can falter in the face of extreme risk exposure. Special circumstances demand special responses and extreme risk exposure needs very careful handling.

Routine risk management approaches, they will fall short but business is that demonstrate a higher degree of flexibility and resilience, well, they will have a competitive advantage and the ability to thrive where others fail. The causes and consequences of meteorologic hurricanes, they do have a parallel in the way that uncontrolled risk exposure can develop in organizations. Both are caused largely by predictable factors but both are characterized by sustained uncertainty and severe impact once they develop. If we can learn to predict a risk hurricane, well and prepare for it effectively and survive its effects, then our organization will be well placed to address the challenges of these extreme risk exposures if and when usually we are unfortunate enough to face it.

And that is the moment when we’re going to bring in our guest, David Hillson. Hello, David! Welcome back to the Project Management Podcast. It’s been awhile.

David Hillson: Cornelius, it has. Yes, it’s great to be back with you. And I think, I was 444 last time. So, nice and easy to remember. But it’s great to be on 484. I appreciate that.

Cornelius Fichtner: Yes, alright! Yeah, before we jump into your book here, which is “Taming the Risk Hurricane.” We saw that just on previous slide there. What can our audience expect to hear us talk about? What will the takeaways be for them here at the end?

David Hillson: Well, the key think here is that we’re going to be using an extended analogy. So, we’re talking about something, which people will have some level of familiarity with and using that as a vehicle to create insights into the world of risk management. So, we will talk a little bit about meteorological storms and hurricanes. But what we really want to talk about is how to manage effectively extreme risk exposure that leads to major business disruption. And that’s clearly something, which in our world today is increasingly relevant. So, it’s an analogy. With the analogy, you have to present the kind of the start point. But the purpose is not to learn about the start point. We’re not here to learn about the weather. We’re going to use the weather storm in order to learn about risk storms and how to prepare for and survive them.

Cornelius Fichtner: Thank you for that. Okay! So, Taming the Risk Hurricane there, the logo overlapping it, obviously. If you have a question for David during this conversation, then please do use the chat, live chat in Facebook and on YouTube and if the question is on topic, I’ll bring it up and then David and I can answer your question, hopefully.

Let me start with the obvious question, David. Why did you choose the word “hurricane” here as the metaphor and in order to get this point across?

David Hillson: Well, as I said, we’re using the analogy as I weigh in to creating insight. And I love a good analogy. There are two things I think are important when I’m talking about risk management. The first is that I know what I’m talking about, that I have the content right. And the other is that I can communicate it clearly. And very often, you’ll find experts in particular areas have their own special language, their own jargon, their own terms, and they will talk about their special subject using their specialist language. And I have always given a lot of attention and time to thinking about how best to communicate the message that I want to get across. And I found analogy comparison with something that people are already familiar with is a good starting point.

So, risk hurricane actually is not my term. There was a book called “Cultural Calamity” by someone called Jo Mayo, Joseph Mayo. I think it was 2017, which is about cultural challenges within organizations. And he introduces this term “risk hurricane,” which he claimed around the sorts of different types of challenges in the internal culture within an organization. And I was asked to review Jo’s book and I liked it a lot. And then I said to him, you know this idea of the risk hurricane, I think we can take it a lot further. Have you thought of developing it? And he said: “Well, you know, we’ve gone to other things. It’s quite interesting but I don’t want to develop it myself.” I said: “Oh, oh, can I? Please, can I take the risk hurricane idea and develop it?” And he said: “Sure, go! You run with it.” So, I’m very grateful to Joseph Mayo for giving me commission to use the term that he coined. But, I think, and he agrees. He is reviewing my book and kindly endorsed it. And so, I think you’ll see that we’ve taken the idea a lot further than just the idea of culture. So, that’s where the idea came from. It came from Jo originally.

But also, there’s a concept of hurricane as being something big, uncontrollable. It kind of swirls around you. It throws everything up in the air. And a lot of people, when you get to extreme risk exposure, it feels like that. It feels like you’re in the middle of something, which is completely out of control. All of this uncertainty and your impacts and consequences, and all sorts of things are happening. It’s really frightening. If you had seen it coming and prepared for it appropriately, you would have a much better chance of understanding what was about to hit you before it happened, preparing for it before it came. And then, surviving afterwards and maybe even thriving afterwards. So, I think it’s a very powerful metaphor because we know a lot about natural hurricanes. And so, we can use that as the starting point for our analogy in lots of different ways.

Cornelius Fichtner: Excellent! And before we get really into the book, let's also talk about the audience of the book. Because even though this is the Project Management Podcast, the audience is not specifically project managers, right?

Above are the first few pages of the transcript. The complete transcript is available to Premium subscribers only. Please subscribe to our Premium Podcast to receive a PDF transcript.