Saturday, March 11, 2006

More on Risk Management

"In many of the accidents, the consequences of being in the wrong place at the wrong time are worsened by poor practices, notably the presence of more than one person on the slope at the same time. Most of those who died knew better. They had either been explicitly warned of the hazards or had enough knowledge to recognize the clues," an op-ed piece in today's NY Times by Jill Fredston, co-director of the Alaska Mountain Safety Center noted.

Doesn't that observation ring true in so many corners of our world?

  • We want a new product launch to work out so badly that we ignore apparent flaws and/or market feedback (New Coke)
  • We minimize reports of imminent danger rather than take precautionary actions (the Katrina debacle)
  • We think we won't get caught or that the rules don't apply to us (Martha Stewart)
  • We ignore the emotional comfort level of people we need to persuade to support our cause (East coast port management)
  • We assume that other people are thinking the way we do (NASA engineers in CA using the English measurement system and NASA engnieers in TX using the metric measurement system on parts that should have lined up perfectly, but didn't)

In building a stronger business, we have to make sure our goals are clear, our strategy validated by market research, and we keep our eyes and ears open during execution to ensure we take into account appropriate course corrections.

It takes discipline focus to avoid the trap of only paying attention to data and feedback that tell us what we want to hear.

Ignoring these signposts in the business world often is not fatal (as it is for skiers and snowboarders testing their mettle), but can result in an avalance of criticism, ill will, and a precipitious drop in profit.

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