Page 103 - IRMSA Risk Report 2020

Sense-making typically involves three inter-related processes: see (do we see what we need to see?); attend (do we know
to pay attention to it?); act (can we act or get others to act?). In complicated systems we look at problems and causes. In
complexity we need to learn to see patterns and relationships. In complicated systems we pay attention to known risks
and probabilities. In complexity we need to pay attention not only to dominant patterns, but also to the outliers or weak
signals. This is of particular importance due to the non-linear nature of complex systems: you never know when something
that seems insignificant becomes a really big threat or opportunity. As risk managers we sometimes struggle with the
importance of managing both opportunities and threats. In a complex world, the inability to rapidly identify and exploit
opportunity is a threat in itself. For this we need tools that can rapidly identify not only the negative, but also positive
“signals” in the patterns and outliers that complex systems present.
In complicated systems actions are based on expert analysis and standards. Centralised authority structures and clear role
boundaries define who is able to act. In complexity our actions are in response to emergent patterns; often we need to
experiment and try different things in order to progress; and we cannot afford for central authority structures to slow us
down. In complexity we need devolved authority.

SEE AT TEND AC T

Look for patterns, not individual Be curious, don’t assume you know Establish feedback mechanisms
causes, problems, and/or solutions what matters that allow responses that match
real-time needs
Increase diversity and “see through Be open to perspectives other than
many eyes” – don’t assume you your own. Establish safe environments where
know best; attentional blindness is even those on the front-line feel
a problem. Enlist your entire work Look for emerging weak signals – empowered to act
force, especially those nearest to something that wasn’t important
the front-line or coal face and on yesterday may be very important Cultivate experimental mindsets
the edges of the organisation. today

Pay attention to outliers Learn to identify emerging patterns

Learn to pay attention and cultivate
diverse feedback & data sources

In a complex world, we cannot afford to limit the detection and management of risk to those in formal risk related roles
and the C-suite or board. While the role of formal risk management is crucial, in a complex world we need every person
in our organisations, regardless of level or status to be vigilant and aware as well as curious and able to think critically. In
addition, we need cultures where it is safe to not only speak up, but to “break rules” in order to take the necessary action
when it is required. What we cannot afford is a workforce that are asleep at the wheel, or who are too scared to bring
something to the attention of management. We also cannot afford a culture where people are fearful of raising concerns
and making mistakes.

1 0 2