Tag Archives: risk management

Is ‘common sense’ more useful than ‘process and the rule book’ for taking well managed risks?

Darllenwch y flogbost yn Gymraeg

The Good Practice Exchange held a pilot seminar on how you manage risks around organisation change, service transformation and innovation. In this post, Chris Bolton looks at what people use to help them make decisions about risk.

This is the second in a series of posts following a pilot session we ran on well managed risk taking. An explanation of our approach to the session is in the first post, ‘Context is Everything’.

What is helpful when we make decisions?

There are many factors that influence how we make decisions. Some are highly logical, rational, and based upon extensive evidence and information; whilst others might be driven by ‘gut feeling’ and emotion.

We wanted to see if there was anything in particular that influenced how people thought about decision making in relation to the two risk management frameworks and the three scenarios we presented to them. The thinking that shaped the questions we posed people is explained below.

In each case people were asked to move the white ball on the triangle to a position that bests reflected their thinking – the closer it is to one statement, the more important it was to them (in the context of the risk management framework and scenario they were thinking about).  An example of one of the triangles we used is below

A triangle where people moved a point to show whether clear process and rules, common sense or freedom to act are most helpful in the decision making process

  • The question ‘what would be helpful to decisions?’ is quite straightforward.
  • The choices for each apex on the triangle are all things which should be positive and helpful when making decisions.
    – Clear process and rules,
    – Common sense, and
    – Freedom to act.
  • There was no right or wrong in where people moved the white ball to on the triangle.
  • Their choice was literally to identify a place where they felt most comfortable (in the context of the Framework and Scenario we were discussing).

What does the data tell us?

Graphic 1 shows the distribution of the 218 dots in the triangle. Each one of these dots was placed in response to the question; ‘what would help you make decisions, and within the context of the two frameworks and three scenarios.

In Graphic 2, we have highlighted what look like 4 distinct clusters of dots.

2 triangles where people indicated whether clear process and rules, common sense or freedom to act are most helpful in the decision making process

In Graphic 2, the 4 areas highlighted appear to indicate:

  • Top centre – a preference for clear process and rules (in favour of other options, including common sense)
  • Bottom centre – a preference for using common sense in combination with having the freedom to act (rather than clear process and rules)
  • Middle centre – using all three options (in balance)
  • Right bottom – a preference to have freedom to act, with limited rules, process or common sense (superficially this could be interpreted as reckless approach to risk management – which highlights that the data does require some further examination and understanding)

Examination of the data, using a number of different perspectives follows:

2 triangles where people indicated whether clear process and rules, common sense or freedom to act are most helpful in the decision making process

Observations & Questions: What would help making decisions?

  • Graphic 3. For the Safe to Fail Framework, common sense and freedom to act are preferred (quite strongly) to rules and process
  • Graphic 4. For the Failure Not an Option Framework, there is a more dispersed pattern. There is a grouping towards process and rules, but many dots are scattered elsewhere.
  • Question 1. Do some people prefer to not use process and rules, even when failure is not an option?
  • Question 2. Does a preference for process and rules (compliance) reduce the need for common sense?
  • Question 3. Does a pressurised environment (failure is not an option) lead to greater indecision and variability in  how people approach decision making (a more scattered pattern of dots)?

2 triangles where people indicated whether clear process and rules, common sense or freedom to act are most helpful in the decision making process

Observations & Questions: What would help making decisions?

  • Graphic 5. For the scenario about a Complaints Handing process the dots are scattered around the triangle approximately matching the overall distribution for all frameworks and all scenarios.
  • Clusters are seen with a preference towards clear rules and process, and another towards a preference towards common sense and freedom to act.
  • Graphic 6. For a scenario linked to tackling obesity, the overall pattern has formed with a preference towards common sense and freedom to act, with few dots close to the process and rules apex.

For clarification, the Complains Handling scenario was about an organisation improving its internal complaints handing process. It was a big challenge, focused in internal processes. Tackling obesity was about a society wide challenge involving multiple partners, citizens and stakeholders.

  • Question 1. Does distribution of dots for the obesity scenario reflect the context? It is a complex situation with many unknowns. There are not clear rules on how to achieve success so, would people prefer to make decisions based upon common sense and the freedom to act (rather than what might appear to be arbitrary rules)?
  • Question 2. Do the dots close to the Freedom to Act apex, distant from both Clear rules and process and Common sense raise any concerns? Is making decision without rules or common sense something that should be avoided?

Common sense the rule book and decision making

Similar to what we described in the first post, the context in which people approach risk management has an influence upon how they make decisions about managing that risk.

The broad conclusions from this test indicate that in a ‘safe to fail’ context, people would find it more helpful to use a combination of common sense and freedom to act to make their decisions, in preference to clear rules and a process. If the challenge they were facing was a situation where failure was not an option, there was a shift towards using clear rules and process, but not a wholesale move. Many people still edged towards wanting freedom to act and using common sense.

The scenario about tackling obesity might help to explain this as it described a complex situation with many unknowns. The desire to have freedom to act and use common sense appears to be more helpful than following clear rules and guidance (which may be arbitrary given the unknown nature of the challenges).

These findings raise a number of questions. Many organisational project and risk management approaches are built upon a clear process and rules. If the organisation places a high value on compliance with the process and rules, there is likely to be a conflict with the desire of many people to use a combination of common sense and freedom to act to make their decisions about risk management (rather than rules and process).

So is common sense more useful that the rule book? Based on this limited analysis, of a small set of data which focused upon people using a safe to fail approach, the answer seems to be yes.  But it does deserve some further examination and wider discussion.

Finally. As mentioned earlier, this is an experiment for us and an example of us ‘working out loud, doing things in the open’. There is still a lot more we would like to do with this data. We are certain that we haven’t got things right and would appreciate any comments and feedback on what we have tried here. If anyone would like to have a look at the dataset and help expand our understanding, please get in touch, we would very much like to talk.

This post is linked to others that look at:

  • Post 1. Context is everything. This is a brief description of what we did in the session and some observations on how people think they would respond to failure in the context of different risk management approaches.
  • Post 3. Does service user involvement in decision making lead to better decisions? This tested the technology we used and pushed our understanding to the limits.

Google Atmosphere: think creatively and innovate boldly

Atmosphere

Dyfrig Williams took part in Google’s Atmosphere, a webinar that examined cultures of innovation. In this blogpost he reflects on the key learning points.

This Welsh Public Services 2025 paper clearly outlines that we’re in a challenging time for public services, as there are fewer resources to deliver services in a time of rising demand. If we can’t continue to deliver the services in the same way, how can we start changing the way we work? It was with this in mind that I watched Google’s Atmosphere, which shared lessons from organisations in the private sector.

Where do innovative ideas come from?

In this session Tim Brown from IDEO looked at how we need to think about our options in a completely different way if we’re looking for radically different solutions. He examined how we consider our issues, in the sense that if we frame questions in a really specific way, we have little scope to come up with solutions that look genuinely different. The example given was around asking the question “How do we make this chair more comfortable?” If we instead ask “How might we sit in different ways?” there is much more scope to think and work differently.

This chimes with Google’s 10x thinking, where issues are radically approached by trying to improve something by 10 times rather than by 10%. The only way to make those kind of improvements is to think in a different way.

Cultivating team innovation: A look inside the work rules of Google

Listening to Laszlo Bock from Google was heartening, as it echoed aspects of our Staff Ideas webinar from a few weeks ago. Laszlo emphasised the importance of staff engagement. It’s easy for managers to stick with what they know, because they’ve become managers by making good decisions. But as Laszlo pointed out, the sum of employee intelligence is huge, and we must make the most of it.

It’s fascinating that decisions at Google aren’t based on gut instincts, but that they rely on data. Their Project Oxygen was designed to identify the traits of successful Google managers. The team working on the project spent a year examining data from appraisals, employee surveys, awards and other sources, which resulted in more than 10,000 observations of manager behaviours.

Accomplishing business innovation: How Airbnb transformed an industry

We’ve been doing some work on risk management lately (including running a webinar on the topic), so Jonathan Mildenhall of Airbnb’s points on risk were very timely. Jonathan encouraged us to take risks and to celebrate both failure and success. Their monthly ritual of celebrating fabulous failures encourages this culture, as it focuses on ideas that didn’t progress as planned. Jonathan said that “The more a company celebrates failure, the more confident a company gets in taking risks. The more confident a company gets in taking risks, the more successful those risks are.”

In case you’re wondering how this learning might be applied in the public sector, Chris Bolton has written a series of blogposts that look at how we might approach failure, including this great summary post on loving and learning from failure.

Well managed risk taking in the public sector

The Auditor General for Wales has repeatedly advocated well managed risk taking, and you can see him doing so in the above video. As he says, if those risks are well managed, instead of casting blame on any failure, we’ll be looking to share the lessons that have been learnt.