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Developing a mature risk mindset, 1 July 2021

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Association for Project Management
Association for Project Management

1. The document discusses developing a mature risk mindset and introduces the concept of a "Risk Mindset" consisting of six principles: risk is natural, risk is manageable, risk matters, not all risk is bad, my risk is my responsibility, and proactivity is essential. 2. It argues that focusing solely on risk management techniques, tools, and training is not enough and that how one thinks about risk determines how effectively it is managed. 3. Adopting a Risk Mindset requires building new thinking habits, developing emotional intelligence, getting help from others, and progressing from conscious incompetence to unconscious competence regarding risk.

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Page 1 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 1 DEVELOPING A MATURE RISK MINDSET Presented on 1 July 2021 by Dr David Hillson HonFAPM, PMI Fellow, CFIRM The Risk Doctor The Risk Doctor Partnership david@risk-doctor.com www.risk-doctor.com © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 2 Risk management today Risk management is Widely accepted Consensus on main aspects Commonly practised All industries All project types and sizes Most countries So all sorted then? Everything always goes to plan
Page 2 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 3 0% 10% 20% 30% 40% 50% 60% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Succeeded Failed Challenged Standish Group CHAOS data (1994-2015) 20% Failed 50% Challenged 30% Succeeded © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 4 What about risk management? Risk management is supposed to help! … THE key driver for project and business success Because: Projects and business are risky – must be managed Emphasis on objectives Proactive not reactive Creates space to manage Ensures consensus and focus BUT projects and businesses fail REPEATEDLY
Page 3 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 5 What’s the problem? Focus on the Three Ts: 1. Techniques Yes, we need to know what to do 2. Tools Yes, techniques need supporting 3. Training Yes, we need to know how to do it Are these enough? No – necessary but not sufficient What’s missing? © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 6 The Three Ts are not enough The Fourth T = THINKING What’s the problem?
Page 4 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 7 What’s the problem? ATTITUDE AFFECTS ACTION BELIEF SHAPES BEHAVIOUR CULTURE INFLUENCES CONDUCT © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 8 Risk management manages risk, but… …how we think about risk determines how we try to manage it Limited concept of risk Ineffective management of risk   What’s the problem?
Page 5 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 9 What does “risk” make you think? Common view: “Risk” means – Trouble, problems Headaches, waste of time Unnecessary worry Business prevention Additional cost Best-practice view: “Risk” means – What we need to know that we don’t know now Early-warning giving enough time to respond Business enabler through managed risk-taking Spend-to-save investment © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 10 Introducing the Risk Mindset
Page 6 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 11 Introducing the Risk Mindset RISK IS NATURAL RISK IS MANAGEABLE NOT ALL RISK IS BAD PROACTIVITY IS ESSENTIAL MY RISK IS MY RESPONSIBILITY RISK MATTERS © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 12 1. Risk is natural
Page 7 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 13 2. Risk is manageable © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 14 3. Risk matters Risk = Uncertainty True or False ? Risk = Uncertainty that matters (i.e. can affect objectives) ≠
Page 8 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 15 4. Not all risk is bad Risk includes both threats & opportunities Managing risk means… …not only preventing potential problems …but also capturing potential benefits What kind of impact “matters”? © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 16 5. My risk is my responsibility Who’s going to manage risk?
Page 9 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 17 6. Proactivity is essential Risk management offers: Early-warning system Forward-looking radar © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 18 The Risk Mindset RISK IS NATURAL RISK IS MANAGEABLE NOT ALL RISK IS BAD PROACTIVITY IS ESSENTIAL MY RISK IS MY RESPONSIBILITY RISK MATTERS
Page 10 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 19 FINAL THOUGHTS © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 20 ATTITUDE AFFECTS ACTION BELIEF SHAPES BEHAVIOUR CULTURE INFLUENCES CONDUCT Why does this matter?
Page 11 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 21 Why does this matter? Limited concept of risk Ineffective management of risk   How we think about risk determines how we manage it Accurate Effective © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 22 Adopting the Risk Mindset 1. Risk is natural. Accept this reality 2. Risk is manageable. Always seek to influence risk 3. Risk matters. Focus relentlessly on objectives 4. Not all risk is bad. Remain alert to both opportunities & threats 5. My risk is my responsibility. Own relevant risks 6. Proactivity is essential. Act now!
Page 12 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 23 Adopting the Risk Mindset Four first steps: 1. Build new thinking habits  Train your mind, work on one aspect until it becomes natural 2. Develop emotional intelligence  Be aware of your thinking, check regularly, adjust where necessary 3. Get help  Find a coach, mentor or trusted friend 4. Be intentional  From conscious incompetence through conscious competence to unconscious competence © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 24
Page 13 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 25 Thank you Any questions? © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 26 For further information Dr David Hillson The Risk Doctor +44(0)7717.665222 david@risk-doctor.com www.risk-doctor.com YouTube.com/RiskDoctorVideo

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Developing a mature risk mindset, 1 July 2021

  • 1. Page 1 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 1 DEVELOPING A MATURE RISK MINDSET Presented on 1 July 2021 by Dr David Hillson HonFAPM, PMI Fellow, CFIRM The Risk Doctor The Risk Doctor Partnership david@risk-doctor.com www.risk-doctor.com © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 2 Risk management today Risk management is Widely accepted Consensus on main aspects Commonly practised All industries All project types and sizes Most countries So all sorted then? Everything always goes to plan
  • 2. Page 2 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 3 0% 10% 20% 30% 40% 50% 60% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Succeeded Failed Challenged Standish Group CHAOS data (1994-2015) 20% Failed 50% Challenged 30% Succeeded © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 4 What about risk management? Risk management is supposed to help! … THE key driver for project and business success Because: Projects and business are risky – must be managed Emphasis on objectives Proactive not reactive Creates space to manage Ensures consensus and focus BUT projects and businesses fail REPEATEDLY
  • 3. Page 3 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 5 What’s the problem? Focus on the Three Ts: 1. Techniques Yes, we need to know what to do 2. Tools Yes, techniques need supporting 3. Training Yes, we need to know how to do it Are these enough? No – necessary but not sufficient What’s missing? © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 6 The Three Ts are not enough The Fourth T = THINKING What’s the problem?
  • 4. Page 4 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 7 What’s the problem? ATTITUDE AFFECTS ACTION BELIEF SHAPES BEHAVIOUR CULTURE INFLUENCES CONDUCT © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 8 Risk management manages risk, but… …how we think about risk determines how we try to manage it Limited concept of risk Ineffective management of risk   What’s the problem?
  • 5. Page 5 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 9 What does “risk” make you think? Common view: “Risk” means – Trouble, problems Headaches, waste of time Unnecessary worry Business prevention Additional cost Best-practice view: “Risk” means – What we need to know that we don’t know now Early-warning giving enough time to respond Business enabler through managed risk-taking Spend-to-save investment © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 10 Introducing the Risk Mindset
  • 6. Page 6 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 11 Introducing the Risk Mindset RISK IS NATURAL RISK IS MANAGEABLE NOT ALL RISK IS BAD PROACTIVITY IS ESSENTIAL MY RISK IS MY RESPONSIBILITY RISK MATTERS © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 12 1. Risk is natural
  • 7. Page 7 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 13 2. Risk is manageable © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 14 3. Risk matters Risk = Uncertainty True or False ? Risk = Uncertainty that matters (i.e. can affect objectives) ≠
  • 8. Page 8 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 15 4. Not all risk is bad Risk includes both threats & opportunities Managing risk means… …not only preventing potential problems …but also capturing potential benefits What kind of impact “matters”? © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 16 5. My risk is my responsibility Who’s going to manage risk?
  • 9. Page 9 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 17 6. Proactivity is essential Risk management offers: Early-warning system Forward-looking radar © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 18 The Risk Mindset RISK IS NATURAL RISK IS MANAGEABLE NOT ALL RISK IS BAD PROACTIVITY IS ESSENTIAL MY RISK IS MY RESPONSIBILITY RISK MATTERS
  • 10. Page 10 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 19 FINAL THOUGHTS © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 20 ATTITUDE AFFECTS ACTION BELIEF SHAPES BEHAVIOUR CULTURE INFLUENCES CONDUCT Why does this matter?
  • 11. Page 11 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 21 Why does this matter? Limited concept of risk Ineffective management of risk   How we think about risk determines how we manage it Accurate Effective © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 22 Adopting the Risk Mindset 1. Risk is natural. Accept this reality 2. Risk is manageable. Always seek to influence risk 3. Risk matters. Focus relentlessly on objectives 4. Not all risk is bad. Remain alert to both opportunities & threats 5. My risk is my responsibility. Own relevant risks 6. Proactivity is essential. Act now!
  • 12. Page 12 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 23 Adopting the Risk Mindset Four first steps: 1. Build new thinking habits  Train your mind, work on one aspect until it becomes natural 2. Develop emotional intelligence  Be aware of your thinking, check regularly, adjust where necessary 3. Get help  Find a coach, mentor or trusted friend 4. Be intentional  From conscious incompetence through conscious competence to unconscious competence © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 24
  • 13. Page 13 Copyright © 2018-21 David Hillson/The Risk Doctor Partnership DEVELOPING A MATURE RISK MINDSET Dr David Hillson – The Risk Doctor © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 25 Thank you Any questions? © 2018-21 David Hillson/The Risk Doctor Partnership, Slide 26 For further information Dr David Hillson The Risk Doctor +44(0)7717.665222 david@risk-doctor.com www.risk-doctor.com YouTube.com/RiskDoctorVideo