Simplifying Risk Management

Simplifying Risk Management
In my last article, I talked about managing risks using an example from climbing. A sport where managing risks can be the difference between life or death. In today’s article, I am going to take you behind the scenes of the climbing world and show you how they are simplifying risk management. The more difficult it is to manage risk, the more accidents will happen.

Simplifying risk management in climbing

Climbers use simple acronyms to remember the things they need to consider. Think of them as a checklist, each letter representing an important factor. While these are fairly simple, some of them grow to become complicated as the number of factors to consider increases. It is easy to identify more and more things you need to pay attention to. In theory this will keep you safer but again, as things get more complicated, mistakes will happen.
In response to this risk management is being simplified to focus on a few key principles. As an example, one acronym for building anchors to connect ropes has shrunk from six letters (SERENE) down to three core principles (SSS). These principles are strong, secure and simple. I won’t bore you by going into what each means. As a climber, if you apply these three principles well you will manage the risk effectively.

How does this relate to leadership?

The climbing community took the time to identify the underlying core principles that apply to managing risks associated with building anchors. The same is true for managing risk in the business world. I have seen a lot of very long checklists containing all the actions required to manage risk. They get done, but without a deep understanding of the underlying principles, I wonder how many are done well. People don’t understand why they are doing them and the checklist becomes a chore.
I’m not saying checklists are bad. If they can be simplified to focus on a few well understood principles, I am confident we will make better business risks decisions. And better still, the people involved will feel more responsible and trusted.
What are you doing to simplify risk management in your business?