Risk Assessing in Difficult Circumstances
What businesses can learn about risk management from ‘Blue Water Operations’ around an aircraft carrier.
Following the article I wrote recently (Aviate – Navigate - Communicate) I received numerous messages from people asking me to speak more about my lessons learned from operating a fighter jet in a carrier environment and how they relate to the world today. So here goes.
If there is one thing you need to be incredibly good at to a) stay alive and b) thrive in highly stressful, high speed carrier operations, it is the ability to assess risk. It is pretty much all you are doing, as everything that’s happening is extremely dangerous and the landscape (aka risk inputs) are changing by the second.
As the number of safe options decreases, your risk tolerance naturally goes down.
To illustrate this point, let’s talk about what naval aviators call the dreaded ‘Blue Water Ops’.
Let's say there are 3 scenarios with # 3 being by far the highest level of stress.
Scenario 1: Take off from a runway, recognise a problem, land back on same runway.
Scenario 2: Take off from a carrier, recognise a problem, but as you are still close enough to land you can divert to a runway and land there.
Scenario 3 (Blue Water Ops): Take off from a carrier, recognise a problem, but you are too far out to sea to make to any land-based runway. Once you are off the flight deck your only landing spot is the aircraft carrier doing an emergency carrier landing.
Now if we back-up slightly to the part before you take off during blue water operations, you find what you might expect, a higher level of tension. Pilots are much more critical of any issues or ‘gripes’ with the plane that may affect the flight, the pre-flight checks seem to take longer and most importantly your tolerance to take a plane with any issues is much lower!
In business risk terms, your ‘risk tolerance’ has decreased.
Relating this to where we are at today, the commonality I am seeing is COMPLEXITY & SPEED. Companies know how to manage risk in normal times. The major issue now is that the number of input variables and potential outcomes are increasing AND the time when firms have to make major strategic decisions is shrinking.
So, what can companies learn from an old fighter pilot about managing the extra risk?
1. Up your game: As you are facing the business equivalent of Blue Water Ops scenario, everyone needs to up their game. This is the time when the true leaders of the companies will emerge, just like in wartime, and may come from other areas than traditional leadership roles. Everyone needs to bring their best to work.
2. Know the RIGHT metrics: Continuously focus on the key KPIs that will keep you alive in the crisis. Know the key numbers, measure them continuously and look for new threats and opportunities.
3. Speed up: Decision governance processes need to speed up (maybe they always did) but now it is critical. The great news is that companies are quickly discovering the latest project management, collaboration and remote working tools. These just need to be married with reengineered governance processes and a new culture to allow people to make better AND faster decisions.
The world out there is starting to feel more and more like my old days flying off a ship. Welcome to risk management at super-sonic speeds!