Project Managers, Do You Have the Symptoms of Risk Myopia?
“Risk myopia” occurs when individuals or groups are short-sighted about risk, unable to take in the full risk picture, which leads them to focus exclusively on short-term risks or those within a limited perspective.
The risk landscape is broad, covering a wide range of uncertainties that could affect our ability to achieve our objectives. It stretches into the far distant future, over the horizon and beyond our sight. We need to understand and manage any and every uncertainty that matters, including those that originate far away.
Yet organizations and their project teams tend to focus largely on those risks that are closest to them, as a result of two subconscious influences: proximity (closeness in time or space) and propinquity (closeness to our personal interests). Where this natural close-up focus becomes limiting — excluding visibility of risks that are further off and preventing us from paying proper attention to them — we are likely to be suffering from risk myopia. A number of symptoms indicate short-sightedness in risk vision.
Concentration on risk detail at expense of big picture
Risk-myopic project teams and organizations tend to focus on the detail of individual risks and fail to see the bigger picture. This perspective is often reflected in the content of their risk registers, where specific risks are described in minute detail, covering every aspect, exploring a range of potential causes, considering many characteristics, and listing every possible impact on the project. While this detailed close-up focus may indeed prove useful to support the management of each particular risk, the danger is that so much time and effort are spent looking at the risks that have been identified that no attention is directed more widely to take in the bigger picture and recognize risks that are not included in the risk register.
Emphasis on short-term tactical risks rather than long-term strategic risks
Another characteristic of risk myopia is excessive concentration on risks that are likely to occur in the near future that would have an impact on tactical execution. Again, these risks are surely important, and it is perhaps right to emphasize them above other risks because their proximity in time might call for urgency in response planning; certainly, their ability to influence and inform short-term tactics needs to be taken seriously. But such risks must not be emphasized to the point where other important risks are excluded.
In addition to short-term risks, we need to look for and record risks that are further off in time. First, faraway risks are getting closer with every passing day, and some are accelerating toward us while we fail to take appropriate action; second, it may be more effective to act early, before such risks get too close, rather than wait for them to enter our short-term field of vision.
Focus on limited risk types
Another result of risk myopia that is similar to the short-term perspective is a focus on only a limited number of risk types. It is most common for us to consider risks in areas with which we are most familiar. For example, engineers tend to see lots of technical risks but are less aware of commercial or external risks. Procurement specialists see contractual risks clearly but might be blind to risks arising from internal sources within the organization. We tend to look for risks in familiar places and not to step outside our comfort zones to see what might be lurking there.
Concern for immediate impact
When multiple phases of a project or business enterprise are spread over a period of time, the risk-myopic will tend to be interested mainly in risks that might affect the current phase, ignoring the potential effect of risks on the overall goals or final outcome. This symptom is indicated by a tendency to operate the risk process in a staged or phased manner known as “rolling-wave risk management.”
Of course, the whole idea of risk management is to be proactive in addressing uncertainties that matter, seeking to identify and influence risks before they arise so that we have maximum thinking space to prepare and position ourselves to deal with each in a timely manner.
Seeing risks but not risk
The important difference between risks and risk is best illustrated by asking the question “How risky is your project?” The risk register lists all identified risks, prioritized for attention and action, with responses and owners allocated to each. But a list of risks cannot answer the “How risky?” question. A project’s overall risk exposure is very different from the individual risks that need to be managed.
Excerpted with permission from The Risk Doctor’s Cures for Common Risk Ailments by David Hillson. © 2014 by Management Concepts Inc. All rights reserved. www.managementconcepts.com