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In the Defence industry, Risk Management is paramount. Most Defence companies have a whole department dedicated to it. No bid or project can start without a Risk Management Review and no bid will be accepted by a potential customer without the inclusion of a Risk Management Plan.

Risk Management is an ongoing process - it’s “cradle to grave”, starting on receipt of an invitation to tender, covering the bid period, the life of the project up to delivery then on through subsequent support phases.

The process, following distribution of an invitation to tender, will be that the allocated Risk Manager calls a meeting of all the department heads or their representatives. Thus, the attendance in respect of a sizeable bid will be something like: Risk Manager (Chairman), Project Manager, Bid Manager, Marketing Manager, Technical Lead, Quality Assurance, Configuration Management, Integrated Logistics Support and Verification and Acceptance Representatives, Procurement Manager, Contract Manager and Finance Manager.

A full day will be allocated to the review and a number of systems may be used but one favourite is brain storming. Each member of the team writes as many risks as they can think of on sticky notes. These risks may be anything from “insufficient resources in contracts department put delivery of bid on time at risk” to “lateness of supplier deliveries delay programme”. As with most brain storming, anything goes, no matter how stupid an idea may appear.

At the end of the designated brain storming period, everyone sticks their risks on the wall under pre-agreed headings, for example Bid Management, Technical, Procurement and so on and duplicates removed.

The risks are then graded within their headings from the worst impact on the project and the highest likelihood of occurring down to the least effect and least likelihood of impacting. The top 20 (this could be 50 or more for a very large and complex project) worst risks are then discussed in detail in order to formulate mitigation and contingency plans and to assess the possible cost in terms of both time and money should the risk impact.

Each risk is given an owner within the team, even if the risk is seen to be one over which only the Customer has control and following this initial meeting, each risk owner is interviewed by the Risk Manager. The purpose of the interview is to obtain the agreement of the individual that the mitigation and contingency plans are possible and workable and that they will accept responsibility for that particular risk.

The Risk Manager compiles all the risks and their associated data and produces a chart showing the risk, its possible impact, the percentage likelihood of its impacting together with associated plans and ownership. The chart, or Risk Management Plan, is circulated amongst the project team for approval and when that process is complete, is formally baselined and issued as part of the bid or project plan.

The next article will detail the management of the risks as they threaten the project.

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Michael Russell
Your Independent guide to Risk Management
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Innovation is different and distinct from creativity in that it is idea selection, development and commercialisation as opposed to creativity, which is problem identification and idea generation. The core issue with innovation management is, therefore, how to select those ideas that are most likely to succeed?

Ideas have to pass though an idea funnel as most organizations lack the resources to try out all their good ideas. The Economist (2003) states that 3000 bright ideas result in 100 worthwhile projects, which are winnowed down to four development programmes. And four such development programmes are required to stand any chance of getting one winner.

Within the idea funnel, ideas must regularly pass GO and KILL points. Here it is decided whether an idea should remain in order to ascertain its potential or be killed off and make way for a new idea. The selection process can be difficult - drop an idea and you may have lost that one gem; keep it in and you disallow another potentially good idea reaching fruition.

Certain ideas have more probability of success than others.

a) Some ideas will naturally have cultural, technical or other impediments. Condom use in Africa to prevent AIDS is subject to cultural taboos. Non-carbon fuel cars must beat back resistance from the oil industry. E-commerce suffers from fear of Internet fraud. Impediments can be plotted against the S-curve in order to generate a risk profile for each idea under consideration.

b) Some ideas have an inherent greater chance of success than others, depending on their origin. Franklin (2003) argues that ideas that have resulted from solution spotting - when individuals have sought solutions for particular problems - have a significantly greater chance of success than most other ideas. The nearest competitors are ideas that originate from random events.

This topic is covered in depth in the MBA dissertation on Managing Creativity & Innovation, which can be purchased (along with a Creativity and Innovation DIY Audit, Good Idea Generator Software and Power Point Presentation) from http://www.managing-creativity.com.

You can also receive a regular, free newsletter by entering your email address at http://www.managing-creativity.com.

Kal Bishop, MBA

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You are free to reproduce this article as long as no changes are made and the author’s name and site URL are retained.

Kal Bishop is a management consultant based in London, UK. He has consulted in the visual media and software industries and for clients such as Toshiba and Transport for London. He has led Improv, creativity and innovation workshops, exhibited artwork in San Francisco, Los Angeles and London and written a number of screenplays. He is a passionate traveller. He can be reached on http://www.managing-creativity.com.

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Unhappy as Jenny undoubtedly was, she held on very tightly to her job. After all, she had worked her way up over the years to the supervisory role she was in - and she wasn’t going to let go. Yet it was clear that she was unhappy, under pressure and unsure of what she could do to make things better. For her business and more so, for herself. For me, she was letting me down in a number of ways and my inability to resolve her performance had, for a while, been my Achilles heel in the view of my boss too.

To start the process of resolving this, we had spoken formally, several times, over previous months until she finally came to see me, as we reviewed her unsatisfactory performance yet again. It was just after Christmas and she hadn’t been able to deliver what our retail business desperately needed, at that vital time.

During the discussion, we reached a point where I had to tell her that she hadn’t been performing adequately and I had several pieces of evidence to share with her. I asked her how best we could find a way to resolve this, which would suit her and give her a dignified way to step down. Otherwise, we would have to go through a period of maintained pressure and ongoing stress for her. Jenny confided in me that she had decided the time had come to step down herself, as her brother had recently had a heart attack through the challenges he had experienced in his workplace.

Jenny took the brave decision to step down and I encouraged her to write the notice-board announcement. We agreed a reducing salary package over a period of time which would soften the blow and she took on a lesser role, which she loved and brought great value to.

Jenny told me later that the way we had been able to resolve the matter had ’saved her life’. I thanked her for her attitude throughout the period and knew, inside, that dealing with the Jenny ‘issue’, had been a big learning for me and my own career.

Sometimes assumptions lead us to think that what we need to do, which may seem really painful, are inherently ‘bad’ for all. Yet in truth, a difficult situation is not just about ourselves - sometimes, embracing the issue can truly help others as well.

Martin Haworth is a Business and Management Coach. He works worldwide, mainly by phone, with small business owners, managers and corporate leaders. He has hundreds of hints, tips and ideas at his website, http://www.coaching-businesses-to-success.com
(Note to editors. This article may be edited for use in your publication or newsletter as long as a live link to the website is included)

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