Quality Revolution … Evolution
Increasing Risk Management
Prowess
As much art as science
Session B10
Paul Armstrong, PE, LSSBB, CMQ/OE
Paul.Armstrong@eNthusaProve.com
412-401-7057
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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Objectives
• See the brilliance of the expert’s perspective of
“management”
• Balance the science of risk analysis with the art of
risk intuition
• Adopt a fresh attitude when improving risk
management in project and operations
management
• Use risk management as a team learning
opportunity
In other words… increase our…
Prowess: skill or expertise in a particular activity or field;
bravery in battle.
Session B10
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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Quick Overview of
Risk Management
Basics
PROWESS
Agenda
Struggles with Risk
Management in Real Life
Struggles due to
“Managing Risk”
Ideas for improving
prediction intuition
Some collateral
benefits!!
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Struggles because of
Tool Addiction
The Expert’s Insight !
Risk Prediction
The tacit knowledge,
intuitive first step
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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The Basic Components
Probability
Likelihood
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Severity
Consequence
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ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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The Dynamic Aspect of Severity
Session B10
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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The Basic Process
Identify
Respond
Analyze
Risk Mgmt
Monitor
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Plan
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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Tool Intoxication
Why our inner geek relishes Risk Management
• Databases
• Matrices
• Risk Breakdown Structures
• Statistics
Notice that these focus on
everything EXCEPT identifying risk.
Session B10
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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Risk Misunderstood
• Real examples of “Risks” heard from industrial
project teams
o
o
o
o
o
Weather
Holidays
People not knowing their job
Not enough money
Not enough time
• The red herring of Drastic Consequences
o Monsters under the bed
Risks present a problem, BUT
Don’t Confuse Problems with Risks
Session B10
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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What Would the Expert Say?
Management is Prediction
Which of these is NOT a prediction:
Consequence
Likelihood
Detectability
Is Prediction an Art or a Science?
Session B10
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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Prediction
“…arts and sciences are branches of the same tree.
All these aspirations are directed toward ennobling
man's life, lifting it from the sphere of mere physical
existence and leading the individual towards
freedom.”
Session B10
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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Risk Prediction
The Science
The Art
Inferential
Statistics
Descriptive
Statistics
Likelihood
Consequence
Probability
Severity
Historical Data
Proven Periodicity
Future ≠Past
Experience
In God we Trust…all
others bring data
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most important figures
for management …are
unknown and
unknowable.
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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Risk Prediction
Explicit Knowledge
Tacit Knowledge
Tools
Creativity
Likelihood
Consequence
Probability
Severity
Analytical Methods
“What could be,
what might be”
“What is, What was”
Session B10
Intuition
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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Improving Tacit Knowledge
Session B10
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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Improving Intuition
How does our brain develop intuition?
Lot of repetitions
Lots of experimentation
Salami slice sampling
It’s naturally programmed into us…it’s called play.
Session B10
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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Ok…how do we “play”?
• Scenario testing
o Develop life like scenarios and let folks play them out.
o Have them observe their thinking and their conversation
• Scrimmaging
o Execute the situation first for practice…then do the the
game films. This requires a safe space.
• Use actual games
o Resource planning games develop our skills to see a
system, balance trade-offs and evaluate our risk prediction
prowess.
Session B10
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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Team Learning
Risk Prediction opens the door for
Team Learning…how?
• Suspends Assumptions
• Gets the conversation focused
on the future
• Allows for prioritizing topics
Provides a path for improving the
team’s TACIT
knowledge…scrimmaging and
simulating via deep dialogues.
Session B10
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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Summary
Keep in mind…
Management is Prediction,
Prediction is Art and Science
Put as much energy in improving your
prowess in the ART of Risk Management as
in the science.
Improve your tacit risk prediction prowess as you’re
naturally programmed to… via simulation and
scrimmaging…ok, play.
Use Risk Prediction and Management as a way to improve
true Team Prowess… it’s naturally forward focused and
tests what we believe vice what we know as an organization.
Session B10
10/11/13
ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ
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