08 July 2015

Guest blog by Tony Pooley: Risk Professionals: Are we the new Politicians and Union Leaders?

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Research in 2014 surveyed over 600 Australian men and women on how 30 professions rated for ‘ethics and honesty’.  Nurses were top and car salesmen were bottom - no surprises there.  Federal MPs and union leaders came in 26 & 27 respectively - and sadly, few people are surprised by that either. 
Most of us have given up expecting more from social leaders but just occasionally, I still wonder if politicians and union bosses enter these professions for the power, or do they really want to make a difference when they first enter the power maze and simply lose their way?
I wonder the same thing about risk professionals. If they earned a living by getting a percentage of the money saved (and the equivalent financial reward for saved lives and environment) I think the great majority would be living on the breadline. But surely they didn’t all intend to do the minimum of thinking for the maximum pay, assisted by the fact that it’s a profession where no-one demands evidence that resources expended were actually beneficial.  
Nevertheless, in 2015 thousands of risk troops around the world will head out to lead risk assessment workshops armed only by a risk matrix –– and many of them won’t even realise that they are firing blanks.  Seriously?  Can complex issues that keep executives awake at night be solved using methodology akin to a game of pin the tail on the donkey? 

 The matrix - party game or risk solution*

I’d like two pose 2 key questions concerning the standard of our profession…

If the risk register truly shows management their most concerning risks, why is it such a rare document to find in an executive’s office?’

I was in a major resources organisation looking at risk registers about 8 years ago and noticed that for one site in Asia the largest risk to the company was a commercial plane crash involving company officers travelling to or from the site.  I called the site general manager and asked him why it was rated so much higher than the obvious safety, security and sovereign risks typical of the area.  He said something like ‘Of course that isn’t our biggest risk’, went on to define his three biggest risks and then said ‘Why the **** would you think it was a plane crash?’  When I quoted the register, he responded ‘Oh, that explains it… no-one takes the register seriously’.  For a few years, I occasionally tested the utilisation of the register in client organisations but I rarely do it any more – the heart-warming exceptions to the rule are simply too few to mention.

‘How far has risk management travelled since the introduction of AS4360, some 20 years ago?’

AS/NZS 4360 was breaking new ground in 1995. It did many things right and was the best guide we had, both here and in the rest of the world, on how to get better at risk management.  But In 1995 mobile phones were just phones and not hand-held computers; France was still testing nuclear bombs in the South Pacific, Prince Charles and Diana were still married and Port Arthur drew tourists for settler history, not the place where 35 innocent people were slaughtered.  In two decades the Standard had multiple revisions and transformed into ISO31000, but the revolution of 1995 has all but spluttered to a halt, with the great majority of organisations are still plodding along with matrix assessments of everything. 
Political correctness and regulation is all that keeps RM alive today, but it doesn’t need to be that way, and this blog will try to engage and support those that believe risk management can be a genuine vehicle for organisational success. 

Tony Pooley is the Associate Professor Risk Management at the University of South Australia. He will be speaking at our upcoming 3rd Annual Australian Risk Management Summit in Melbourne this coming August.

Tony is an author, academic and consultant in risk management.  He holds an adjunct role as associate professor in risk management at the University of South Australia, is co-author of the soon to be released 'Risk Bandits' book on the shortcomings of corporate risk management and is the CEO of the Principle Seven consulting firm

* Cartoon from ‘Risk Bandits’ by Hogarth, R., & Pooley, T., and based on a risk matrix quotation from Professor Patrick Hudson of Leiden University comparing the matrix to the pin-the-tail-on-the-donkey game.


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