Updated: Jun 10
Those who have been following me might be aware of my presentations on demystifying risk entitled, Lord of The Risks – Defeating the Dragon of Uncertainty. In these presentations we follow the adventures of a team of individuals that go on an adventure to complete a mission of strategic importance. They have never worked together before and some have never been on an adventure.
Their mission will require that they leave the world of the Shire, a place where they know everyone, how things work, and where life is predictable – it is a world of certainty. However, they must now take a step out into the a world that they don't fully understand, they don't know how things work, and both threats and opportunity are unpredictable – it is a world of uncertainty. And it is this uncertainty that creates the opportunity for risk.
It’s a dangerous business, walking out one’s front door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.”
While not fully understanding the risks ahead our team agree to go on the adventure because the stakes are too high not too. The Ring of Value that was forged in the Valley of Capabilities has been lost and if not recovered may end up at Mount Doom where value is destroyed. Their mission objective is to find the Ring of Value and take it to the Mountain of Better Outcomes along the value stream.
Fortunately, with the help of a wizard (aka risk manager) our team was successful in fighting the Dragon of Uncertainty and reclaimed the Ring of Value.
We catch up with our team as their journey continues...
Lord of the Risks - The Two Towers: Productivity and Compliance
The Fellowship of the Ring of Value have just decided to pass through the gate of pro-activity and are making progress towards the Mountain of Better Outcomes along the value stream when they come across someone they recognize but have not seen for a while. The Wizard who had previously helped them now greets them:
"I come back to you now, at the turn of your intention. One stage of your journey is over, another begins. To make progress towards your destination you must be mindful of the ever watchful eyes of The Two Towers: Productivity and Compliance. Keep both in your gaze at all times and don't by any means look at only one and avoid the other."
The leader of the fellowship puzzled by what the wizard had just said, replied:
"you have not changed, my friend, you still speak in riddles."
The wizard apologized for speaking in Riskish and explained, this time in English, more about The Two Towers and how the towers will help them achieve their mission.
"Because even the very wise cannot see all things"
The Two Towers: Productivity and Compliance
The two towers were constructed in recent years to guide you through the valley of capabilities (otherwise known as the Value Chain) along the value stream. Here is a map so that you can find your way:
Each tower has its own purpose to help ensure that the Ring of Value reaches the Mountain of Better Outcomes. They also have different strategies and tools to help you contend with the dragons of uncertainty: Aleatory and Epistemic.
What you must always remember is to keep both towers in sight and never look at only one at the expense of the other.
The Tower of Productivity - Use only what you need
You must only use the resources you need to ensure you have enough to reach your destination. This tower will help you eliminate waste, and improve your productivity so that you reach your destination with room to spare which is called margin, which is the best way to contend with the Aleatory Dragon.
The strategy most often used by the Tower of Productivity is something that is known as LEAN. Here the Ring of Value will be pulled through the value stream which will surface hidden artifacts that are slowing you down. The people of this tower call these artifacts waste and you will be wise to eliminate as many of these as you can manage. Learn from these folk for their practices and tools will help you with what lies ahead that you cannot predict.
However, you must remember that the two towers work together and so you must be ever mindful to use your gains wisely. Some of your gains must be allocated to the Tower of Compliance to strengthen your defenses to defeat the Epistemic Dragon.
The Tower of Compliance - Your defenses must hold
Your standards, systems, processes, and controls must not fail to protect the the Ring of Value as you move through the value stream. The Tower of Compliance will help you buy down risk by creating lines of defense against the Epistemic Dragon.
The folk in the Tower of Compliance are known to use what is known as RISK MANAGEMENT and they are fond of the BowTie Analysis. They will look to your goals and objectives to identify prevention and recovery controls (your defenses) to increase the certainty of completing your mission. Make sure that you know what your objectives are otherwise their strategies will be less effective.
You must ensure your defenses are sufficient and strong enough to hold. To strengthen them and broaden your coverage you will need to make alliances with Safety, Quality, Security, Environmental, and Regulatory folk. Some of them have not worked together for many years if at all. However, you will find that they will unite and fight together under the banner of "risk reduction" which is a goal they all have in common.
One last thing, there is more at risk than you realize. Your defenses must not only protect the Ring of Value, they must also protect the fellowship, the people of the value stream, and the Valley of Capabilities otherwise you will not make it to the Mountain of Better Outcomes.
The Wizard Rides North
Some of the fellowship did not understand and were not sure of what the Wizard had just told them. There were some who wished that this mission had not been given to them and that the wizard had not come.
The Wizard hearing their murmurs picked up his staff, stood up and said,
"So do all who work in highly-regulated, high-risk industries, but that is not for them to decide. All we have to decide is what to do with the time that is given us. There are other forces at work in this world, besides cost reduction and loss prevention.
Remember, the people of the value stream will need you, use only what is absolutely necessary and make sure your defenses hold and promise me that you will keep both towers in your gaze at all times and don't by any means look at only one and avoid the other."
The wizard then called his horse as he spoke once more to the fellowship:
I have heard news about a different kind of dragon, one that has not been seen in these parts for some time, the Dragon of Opportunity. I ride north to learn more about this dragon. Look to my coming, at first light, on the fifth day. At Dawn, Look to the East."
And with that the Wizard rode off leaving the fellowship in the Valley of Capabilities between the Two Towers: Productivity and Compliance planning their next part of their journey keeping in mind what the Wizard had just told them about LEAN and RISK MANAGEMENT.
Note: Any reference to The Lord of The Rings by J.R.R Tolkien or related works is used under Fair Use License for the purpose of education and learning.