A couple of good quotes caught my attention this morning. The first has to do with the recent financial meltdown that led to the global economic crisis … the second with Captain Sully’s spectacular landing of the US Airbus on the Hudson river. Very different scenarios with very different contexts. Yet both speaking to role of leadership when it comes to risk management.
“… You can’t control people through policies, procedures and policing. You can only do it through a strong risk management culture and absolute integrity in all leaders.”
We have to have situational awareness–we have to be able to create a mental model of our reality. We have to be good risk mangers, be mindful, we have to understand our process so we can sensitize ourselves to risk. Bad outcomes are rarely the a result of a single failure but are instead the end result of a chain of events, and when we sensitize ourselves to risk and are able to identify it proactively we can break the chain and have a good outcome.
The first example speaks to understanding the markets you serve, the impacts of the trends, and adjusting for them accordingly. The second example shows just how important good training is such that when things go wrong, instincts take over.
Anticipating the unexpected, preparing for the worst. As product management leaders, we should take heed because despite the many successes we experience in our roles/careers, there is bound to be a failure. In fact, the article from the Ivey Business Journal points to 3 simple things leaders do well to achieve effective risk management.
- First, they ask the right questions. Don’t be afraid to rock the boat … don’t be afraid to address the uncomfortable aspects of leadership … don’t be afraid to ask questions when something doesn’t make sense or seems to good to be true.
- Second, they seek out a diversity of opinions and perspectives. The best leaders consult with a mix of people, with different perspectives, backgrounds and knowledge to predict, assess and manage risk. Captain Sully addresses this in the podcast as well … about how we cannot be arrogant, autocratic, or not listen to others.
- Third, they have integrity, courage and compassion. I love that they included this one … I’ve lost count on how many times I’ve posted on these subjects. The most effective leaders during the global financial meltdown were people of good character.
I would add a couple of other elements leaders should do well with risk management.
- They have good contingency plans. I’ve heard the quote before taking active steps to reduce the possible effects of risk is not indicative of pessimism, but is a positive indication of good project management. This could go along with the asking the right questions item, but I think it takes it to the next level. It is what allows instinct to take over when things go wrong because you’ve already put yourself in the situation.
- Learning from mistakes. Failures happen. Good leaders use prior failures as input to good planning.