Working through far-fetched outcomes

What to read first: Why unrealistic pictures matter

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Take any outcome description that seems so unlikely as to be far-fetched. Then consider these questions. Ideally, you take the point of view of your least trusting stakeholder.

  • How far-fetched would it be if it were not a solid individual like yourself running the unit, but a reckless fool? A reckless fool who was not supervised and accountable? Someone who had a secret plan to cause trouble for the organisation?
  • Alternatively, how far-fetched would it be if it turned out one of your trusted team members was secretly working for your organisation’s opponents?
  • Lastly, consider whether it is far-fetched that somewhere in another organisation, not very different from yours, there is another unit, also not very different from yours, would have that kind of outcome in at least one year of this decade? One year of this century?

If the outcome remains far-fetched in each of the hypotheticals, there is some basis for getting rid of it. If some plausibility remains after one of the hypotheticals, the outcome is worth keeping. You will keep its likelihood acceptably low. You will do that as an active process with a cost and with recognisable value.

Compare the risk of death from a plane crash. We all know that passenger planes are very safe, thanks to procedures, rules, and design. And planes still kill people, just very rarely per passenger-kilometre. The likelihood of person dying on a given flight is tiny, as is the likelihood of any specific plane killing a person in the coming year. At the same time, we expect that the aviation industry will spend the bulk of its risk management effort on addressing the risk of deaths. We would be shocked and disappointed if they had taken safety for granted, assuming that existing safety procedures ‘prevent’ deaths. The pilots working inside the system do not consciously think about passenger deaths each time they get into the plane and work through checklists, and yet most of the steps exist to reduce the risk of passenger deaths.

In historical practice, ‘risk management’ has often been focused exclusively on unlikely but very bad outcomes. The risk management steps this guide recommends for your business plan are innovative to the extent that they look at those bad possibilities, and also at the much more likely possibility of a year-end outcome only slightly different from the planned outcome.


Parent articles

Why unrealistic pictures matter

Your customers care deeply about what won’t happen to them.

New to this Version 3.0 Beta

Index to the topic Risk in work unit business planning


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