(This post contains affiliate hyperlinks. Please read my full disclosure.
There are always things that go wrong. No matter how much we try to control everything, something will always happen that takes our hard work out of order. After reading David Hancock’s book Tame, Messy, and Wicked Risk Leadership, it made me wonder if I should be blaming anyone else for my mistakes.
Hancock argues that the world is more complex than traditional risk management models can handle. Hancock argues that we should look to the worlds sociology, philosophy, and politics to find new ways to interact with risk.
This is necessary because the equation risk = probability x consequence does not work when there is a knowledge gap. You can reduce risk by getting more information and analysing it.
What to do if knowledge is not the problem
Sometimes, all the knowledge in this world won’t be enough to reduce risk. He said:
Yesterday’s response is just a hint of tomorrow’s. Tomorrow’s responses to the same set of circumstances may be different. In any case, today’s conditions will never return to exactly the same state as today. We don’t know what the future holds. The only thing that is risk in this world is uncertainty about the decisions made by other humans and how we can best respond.
Hancock’s description is best suited for large complex projects with multiple stakeholders, such as public sector initiatives. To give an idea of the scale, Hancock uses examples from space exploration and transport (he was responsible to the Heathrow Terminal 5 Project’s risk management system) He says that it is not sensible to divide risk management among different functions or initiatives when dealing with large projects.
Before we can take responsibility, we must address all the uncertainties facing an organisation at any moment and how they relate to each other.
He then explains this in action, explaining the recent financial crisis with clarity rivaling Robert Peston’s headline-grabbing approach.
Tame, Messy, and Wicked
The majority of the book is devoted to explaining how to deal with messy, wicked and tame problems. Here’s a summary.
These are called “tame problems” because they have “simple linear causal relationships with clear beginning and ending points.” Traditional risk management is applicable to these. You collect data, analyze the situation, create a mitigation plan, and then implement it.
These are called “messy problems” and they can’t be solved in isolation. These problems can be solved using systems thinking. He gives traffic congestion as an example. It is not possible to solve it by increasing road tax or widening motorways. Even though we all agree that traffic jams are bad, there are many issues at stake.
What are your risks? As long as we share a common social theory or ethic, we can solve messy problems eventually. If we don’t have that, we will end up with wicked problems. These are the areas where the proposed solution will likely depend less upon a probability model and more about your view of the world. There is no one right answer, and five different approaches will be taken to managing risk.
Leadership in managing risk
The book’s title mentions risk leadership, but the book’s end is where the discussion about it begins. There are only two pages of explanations about risk leadership. I felt like I was being shortchanged.
Risk leadership is about helping others to live with uncertainty and facilitation.