We often respond to blunders such as the explosion on BP's Deepwater Horizon, the collapse of Lehman Brothers, and the Volkswagen emissions scandal by asking: What were they thinking? But before we find ourselves involved in some disaster of our own making, we might well ask ourselves: What are we thinking? How are we thinking about risk? Where are we failing to think about it?
Researchers investigating those three notoriously preventable man-made disasters find a common feature: a long incubation period in which risks and anomalies went unaddressed by managers and senior leadership. Recurrent anomalies were reclassified as 'normal'. Management imperatives (that is, profits) overrode the acknowledgment of high risk.
These common failings may be growing even more common. In The Stupidity Paradox (2016), researchers Mats Alvesson and Andre Spicer warn of a rising tide of unbridled and dangerous stupidity as overambitious managers try to impose wishful, grandiose narratives on reality. By pressuring employees to buy into particular ways of seeing and doing things, managers might increase focus and efficiency, but only in the short run. In the long run, the result is vulnerability to disaster when the small problems that can be dismissed finally accumulate into something too big to dismiss. Even if disaster is avoided, employees and other stakeholders lose faith in the organisation once its persistent denial becomes undeniable.
Only when employees start thinking again—only when they remember (or are reminded) to reflect and ask questions about the organisation’s goals and its means of achieving them—can they fend off organisational stupidity. This means all employees. Top management can't do it alone and neither can the designated "risk managers".
In a recent book, Riskwork (2016), colleagues and I documented the everyday life of risk management. We demonstrated that the excessive and uncritical use of certain kinds of risk-management vocabulary and technology could invite risk rather than preventing or managing it. In my contribution, "The Triumph of the Humble Chief Risk Officer", I show the importance and influence of 'risk talk', an organisational discourse about risk issues which can be so practical and so inconspicuous that participants do not even realise they are engaged in risk management.
Bringing about risk talk is not easy. People need to see the sense in it. Technology can help – but requires careful design. A common problem plagues formal reporting systems: risk managers can get inundated by a tsunami of un-prioritized issues – or else, when employees are asked to carry out 'risk assessments’, reporting proclivity plummets, given that most people find risk assessments too abstract and difficult to do.
With the surge of organisational stupidity and this insight about the importance of risk talk in mind, colleagues and I at the University of Lausanne developed an application called RiskTalk. It allows—and, by its very existence, reminds—members of an organisation to think "out loud" about the risks they see and to suggest remedies before the risk overtakes the organization using their mobile devices, truly anonymously. RiskTalk prioritizes issues by linking them to the organization’s pre-defined values and objectives (e.g. "safety first"). So in the back office, the risk controllers would see issues flagged and sorted by organizational priorities – which then directs attention and follow-up action.
As described in the case study that follows (RiskTalk at Swissgrid), we piloted RiskTalk at Swissgrid, the national extra-high-voltage grid. We chose Swissgrid so as to test RiskTalk’s value in a particularly high-reliability organisation. It not only proved popular but brought some serious risks to light and under control.
Risk managers are invited to participate in the research by piloting RiskTalk for three months. At the end of the pilots, we ask for feedback, which will inform our research on managing risks. This invitation has limited availability (closing date 30 September) and is on a first-come, first-served basis.
Companies wishing to continue using RiskTalk after the trial period may do so by contacting the university.
To set up a pilot at your organization, apply at risktalk.ch/linkedin
Anette Mikes is a professor at the University of Lausanne and lead researcher on the RiskTalk project, which aims to improve employee empowerment and dialogue within organisations.
Risk Talk at SwissGrid
As the owner of Switzerland’s extra-high-voltage grid, Swissgrid (www.swissgrid.ch) manages an infrastructure critical to Switzerland’s economy and society. As a member of the European Network of Transmission System Operators for Electricity, it is also responsible for coordination and grid usage in Europe’s cross-border electricity exchange.
Aware that risks can be allowed—by human weakness—to incubate in plain sight, Swissgrid decided to take a proactive approach by partnering with researchers at the University of Lausanne to test RiskTalk. This intuitive app was designed to encourage employees to think—that is, to reflect on everyday work and to flag anomalies and issues that might cause problems—and to make suggestions.
Swissgrid employees adopted RiskTalk enthusiastically. During a six-month testing period, about a quarter of the firm’s 450 employees reported 200 issues, made more than 100 suggestions, and saw almost 100 issues resolved. By identifying a number of 'near misses', RiskTalk promoted organisational learning and helped prevent what we had already been lucky enough to escape.
RiskTalk turned out to be much more than talk. It triggered numerous actions in response to highlighted risks such as defective safety procedures, unreliable equipment, damaged infrastructure, and gaps in training as well as less-obvious issues such as unsafe doors and stairs in one of our office buildings. Beyond the specific warnings, RiskTalk has started to create a common language to discuss risks and has germinated a culture of proactive and 'non-punitive' reporting.
As employees began to see this tool as a means not simply to "talk", but to "get things done", they put it to more and better use. Employees who haven't got RiskTalk yet are curious about it, with many volunteering to participate. I am convinced there is much to be gained by extending RiskTalk not only to the rest of Swissgrid, but also to our whole value chain.
Author:
Kurt Meyer is Chief Risk Officer at Swissgrid and leads the RiskTalk pilot at Swissgrid and its key partners along the extended value chain.
