We do not always think in terms of risk but there is risk in every decision we make. The risk is always balanced against the opportunity to some degree or another. Risk assessment, risk management and risk strategies are processes we can add to our decision-making process. We need some way to consider and manage risk. This is because our decisions and planning are continually influenced by our attitude to risk.

“Great deeds are usually wrought at great risks.”  Herodotus

High anxiety

One summer I was mountaineering in the French Alps with a group of friends.  We had just spent a few days bagging some routes when someone had the idea of tackling a nearby climb. It was not one we originally planned to do as it was a higher grade than we were generally comfortable with.

That season there had been very little snow and the ridges were more exposed and icy than usual. So, as this route was following a ridge, I argued that it would be in bad condition. It was likely to be even harder than the guidebook suggested.  The weather was also set to change for the worse, so as far as I could see, the risks outweighed the opportunity.

I thought my logic was sound but the person who had proposed the climb was very persuasive. He managed to get the other two members of the group to agree with him. They wanted to give the climb a go.  It was three against one, and I knew they needed four people to attempt the route. Therefore the pressure was on for me to accept the majority decision. But I genuinely believed it was not a safe option. It was a tough conversation. I then made myself very unpopular when I refused to do the climb. It was a stand-off. They needed a fourth climber and therefore all we could do as a group was head back down the valley.

A good call

Fortunately for them, the other three found another willing climber. I meanwhile, by now feeling somewhat sheepish, decided to go trekking for a couple of days. As I was on my own I decided to stay below the snow line and try and avoid the bad weather.

I spent most of the next few days feeling guilty about being stubborn but when I returned I found that my decision had been justified.  The weather had deteriorated and the route proved to be in poor condition, as I had predicted.  After a few hours of struggling in dangerous conditions, my old climbing partners were forced to make an emergency descent. The deteriorating weather meant they also had to make a hasty retreat back down the valley.

It turned out that they were the lucky ones; that weekend ten people lost their lives in the Mont Blanc area as high winds whipped people off icy ridges.

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Risk affects our decision making

Life is full of decisions and intuitively we are assessing risks all the time, even if they are not as obvious as the ones in the previous example.  As we pursue our dreams we will be frequently faced with various options of ways to achieve our aims.  In order to navigate our course, we have to assess the factors, consider the risks, and make decisions as to the best way to go.  Sometimes to help answer the question ‘which way should I go?’ it is prudent to consider ‘which way shouldn’t I go?’ and this particular question is all about risk.

If a venture is suddenly deemed too risky, it is the surest thing that will stop us from acting; no matter how attractive the option first seemed. Therefore, risks need to be identified, assessed, mitigated and managed, so that we are in the best possible place to make our decisions.

Capacity for risk varies between people and situations so it is important to remember that this is an ongoing process of identification and management.  At the same time, we don’t want to become defensive, timid or risk-averse. Achieving bold visions means taking risks; we just need to make sure we have counted the cost before we commit ourselves.

When to consider risk

In The Right Questions Framework, we consider risk when we look at options. This comes under the Which question.

You don’t want to start a venture by looking at risk. If you do, the problems could easily become paralysed before you even start.  But, if you plan without considering the risk, you could quickly become disillusioned or make a serious mistake that could be hard to recover from.  Therefore it is at the point when one has a clear idea of what we need to achieve, and are considering different options to achieve that goal, that we look at risks.

“Take calculated risks.  That is quite different from being rash.”  General George S Patton

How to manage risk

Unnecessary risks can be avoided by careful planning and this process is part of your risk management process.  Your approach to risk – which risks you tolerate and those you treat – becomes your risk management strategy.

This exercise is a helpful aid to decision-making, but remember, that one should never make a decision out of fear.  Some risks will be big – you just need to know whether that danger is acceptable to achieve your aim.  Effective risk management helps us to achieve our mission, but with the risks considered and reduced as much as possible, not at the exclusion of risk entirely.  Remember, it is more important to do the right thing than the safe thing.

As you go into the process of identifying and evaluating the risks I recommend, that if you are part of a larger team, that you go through the following exercise first as an individual and then as a collective. This avoids group-think and other related biases.

Once you all have some ideas you are likely to find that as a team you will have a healthy (frequently robust) discussion about how to categorise risks. This is due to people’s different viewpoints; do not worry, this is a productive process. Diversity of thought will help you all evaluate risks more effectively and help you learn more about how the team thinks and operates. This inclusive process will also allow people to express any fears, find solutions and commit to the final plan.

Risk Management Process

Here is a simple risk process. If you follow this exercise you will be able to identify the key risks you face and create a basic risk management strategy:

• Play devil’s advocate for a moment: give yourself 5 minutes to try and think of as many things as you can that could put a stop to your venture and list all these threats.
• On a scale of 1 to 5 give each risk a score of how probable it is to occur (5 being the most likely).
• Now do something similar, scoring 1 to 5 for the severity of the impact of each of the risks.  In this case, a ‘1’ might be a minor inconvenience whereas a ‘5’ would be a show-stopper.
• For each risk multiply the probability score and the impact score so you get a score of 1-25 for each risk.  You can now rank all the risks in a table.
• Start at the top with the biggest risks and think about how you can avoid, prevent, limit the damage or otherwise manage the risk.  This is called mitigation.  Write down the plan for each risk and after the mitigation measures have been applied score the risk again for likelihood and impact to see how it has improved and whether it is acceptable to you (and/or your team).
• Now consider whether the opportunities outweigh the risks for the course of action you have chosen. If you are unsure, you can go back and look at the risks in more detail for another course of action that you generated previously.
• Once you have identified the most important risks make someone responsible for the management of each risk. They do not carry all the risk (or blame if it goes wrong) but they do have responsibility for tracking the risk on behalf of the team.

Record and review your risks

There are lots of ways you can record the information you get from this process. Most businesses have spreadsheets to capture the key operational or project risks. Find what works for you but my advice is to keep it simple. If the document is too big and complicated people won’t read it.

The other thing is to keep it up to date. Make sure you review the risks on a regular basis. The situation changes; new risks emerge, other risks fade. Make sure you are tracking them.

But don’t get obsessed or paralysed by risk. After all, who dares wins!

Like many, I was shocked and saddened to read that HRH Prince Philip had died. I had the pleasure of meeting him just once. It was just one of his estimated 22,219 solo engagements, so I am just one of the many thousands of people that the Duke of Edinburgh met in his many years of public service.

I was immediately reminded of our encounter. It was amazing to meet the Prince but unfortunately the experience was marred by the fear that I felt at the time. Fear of failure, that ironically, led to failure.

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A Royal encounter

My fleeting encounter with the Duke of Edinburgh was at the passing-out parade at Welbeck College. I was a student there and must have been 17 or 18 years old at the time.

Welbeck College was a military school and we had pretty regular parades, but a royal guest was a big deal. What’s more, Prince Philip was a respected military man in his own right, having had a distinguished career in the Navy, including combat experience in the Second World War. Therefore, we had been preparing extra hard and received a considerable number of extra instructions on our conduct and behaviour. Inspections also became all the more stringent.

I still remember the RSM (Regimental Sergeant Major) giving a stern brief about what we were and were not allowed to do when the Prince was there. He finished off by saying, “And whatever you do, don’t contradict him!” or words to that effect.

The RSM was a fearful Scottish character. He was short in stature, but his voice made up for it. I can still recollect his voice commanding, “there will be no smoking on the college rooves!” He gave many other motivational speeches, generally after whichever latest student misdemeanour. Woe to the one who might fall under his wrath!

Choking under pressure

So, as the Prince inspected the parade, passing down the line, with the RSM in-tow, I could not help but playing over in my mind all the RSM’s colourful threats. Then, to my shock, the Prince stopped in front of me and asked a question.

“So, you are off on exercise next week?”

The Prince was referring to our annual military training camp that happened in the holidays. Prince Philip smiled; he was obviously doing his best to put me at ease. But, as far as I was concerned, the pressure was on. I had to reply.

So, without thinking I said: “No, actually it’s the week after next.”

At that moment I realised what I had done. I had contradicted the Duke. I could see the RSM out of the corner of my eye. He was attempting to smile, but there was no laughter in his eyes. His face wore a grimace that said, “Ash, I am going to hunt you down and kill you.”

I was so scared I can’t remember what the Prince said in reply. Ever the consummate professional, I don’t think he was phased at all by the idiocy of this young man.

The Prince continued his way down the line of cadets. His smile was unbroken, his manner as relaxed as ever. I, however, sweated it out until the parade was over. Then, I spent the rest of the school term avoiding the RSM.

Fear is a poor motivator

Isn’t it funny that so many of our mistakes are born out of fear and worry? Thinking about the RSM still sends a shiver down my back. It just goes to show: fear is not a good motivator.

Prince Philip was deeply committed to public service and had high expectations of himself and others. Despite this, and his position, he always tried to put people at ease. This was in contrast to the fear that the RSM inspired.

Reflecting on these contrasting approaches has certainly changed the way I work with people. As the Google study confirmed, leaders should be creating an environment of psychological safety where people can make mistakes. The funny thing is, if people aren’t afraid, they make fewer mistakes anyway. Ironic.

We all have something to learn from the Duke of Edinburgh. No matter what our position, we should always maintain our humour and humility. And as leaders, we should seek to put people at ease to get the best out of them.

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HRH Prince Philip you will be missed. I can just echo the words of President Obama:

“As the world mourns his loss, we send our warmest wishes and deepest sympathies to the Queen, their children, grandchildren, and great-grandchildren; and everyone who knew and loved this remarkable man.”

Barak Obama