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A Short Guide to Facilitating Risk Management

Pullan P. and Murray-Webster R. (2011)

Despite the high degree of organisational expenditure on setting up risk processes and supporting tools and frameworks, they often ultimately fail to deliver the expected value. The inherent problem is that processes of rationality are unworkable when attempting to encourage groups to actually agree upon that which is risky, why it is risky, and importantly what to do about it. This book provides practical guidance on facilitating risk workshops, and making risk management happen outside of the workshop setting as well. The cartoons throughout work well as the emphasis is on practical guidance for getting things done without suffocating those who have to attend risk reviews.

This book sets out a practical approach to how the risk management process can deliver value through effective facilitation. It brings together Ruth Murray-Webster's expertise in the human aspects of risk and risk attitude and Penny Pullan's wide experience of the facilitation of project workshops.

Dr Penny Pullan is Director of Making Projects Work. Penny is a highly-qualified project manager, facilitator and trainer, with a broad experience both inside multinational companies and as an external consultant. Penny is experienced in facilitating risk workshops and equipping others to do so. See www.makingprojectswork.co.uk

Ruth Murray-Webster is Director of Lucidus Consulting Limited. Ruth is a highly-qualified and respected business consultant, with broad experience in managing organisational change in a cross-cultural context and across a wide range of sectors, and a particular interest in the human aspects of effective change management. She is co-author of two earlier Gower books, Understanding and Managing Risk Attitude and Managing Group Risk Attitude See www.lucidusconsulting.com

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Contemporary Case Studies
- Culture Change at Birmingham Airport
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- What is it that makes a Facebook Profile a Successful Marketing Tool for Worcester City Museum & Art Gallery?
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- Entrepreneur’s General Personality Traits and their Influence on Company Culture
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- Application of Michael Porter’s Generic Strategy to a local Oleochemicals Manufacturer: A Case Study in Malaysia
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Conferences
- The Sixth Art of Management and Organization
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- Faculty of Management Science
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- Sustainable Leadership and Management Education
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Management Tips
- This is a new section that will grow over time. If you have a management tip of 50 words or so that you would like to share, please send it to the editor at carolinebagshaw@ipma.co.uk
- Communication Tip – Have a TOOT
  (work by Barry Oshry)
  - People take Time Out Of Time, pause in their normal work, and instead gather together for a TOOT. They tell each other what it’s like in their part of the organisation, and how decisions have affected them. It helps people see outside their little bit and understand the bigger picture.
- Recruitment Tip – Employ optimists
  (work by Martin Seligman)
  - You need people with the skills for the job, but beyond that, you need optimists – not starry-eyed dreamers, but people who confidently expect success. And people who see setbacks as a blip, not a disaster. These people don’t give up; they keep trying; and they perform significantly better than cautious people who expect the worst.
- Creativity Tips
  (work by David Kayrouz)
  http://www.creativepathways.co.nz/index.htm
  - Allow time to make connections
    Allocate a clear space for thinking and acting creatively. We do this in small ways all the time but the big challenges need specific time and attention. Brain waves function differently when you are imagining, so it’s difficult to jump instantly from analysing the budget to brainstorming a new idea. Dedicate specific time for creativity and recognise the significant shift you make from analytical to imaginative work.
    
    Understand the role
    When working creatively you are trying to generate and match as many possibilities as you can. This means letting the ideas flow without censorship. Do the evaluation later. Understanding this is fundamental to piling up the possibilities. Whether you are brainstorming by yourself or in a group, there are three prerequisites: no rules, suspend judgement, play and experiment.
    
    Encourage free and open communication
    Building trust in ourselves and others will increase possibilities. Freedom to express ideas doesn’t mean we have to adopt them – that comes later. But out in the open the ideas can rub shoulders with each other. Censorship of any kind has little to offer. When listening, don’t judge, encourage – until the possibilities stop flowing. Engaging with others in this way will help build the trust needed to collaborate and co-create.
    
    Accept diversity and ambiguity
    Much of business is driven by consistency and uniformity, yet the differences found in diversity and the possibilities of ambiguity help to stimulate change. By encouraging and understanding different people’s viewpoints you will discover new perspectives. Let some challenges sit awhile before making decisions and you may well find better solutions. Mostly we have a desire to find answers and finalise things. But once you reach this point the creative opportunities stop.
    
    Engage in serious play
    Play is often seen as the opposite of work, but it is a hallmark of serious creative work. We are not talking about passing on jokes but about the spontaneous fun created during work-related activities. Good humour lowers stress, allows the mind to function better and helps to encourage a more open atmosphere.
    
    Encourage curiosity
    Asking questions drives creativity. Good questions can uncover potential for further exploration and are the result of an inquiring mind. Often questioning is discouraged – it can be connected with not understanding, doubting, criticising, or just being plain nosey. But questions allow us to test for new possibilities and outcomes. Be open to encouraging your own and others’ curiosity.
    
    Capture ideas
    Creativity is a complex process and ideas can strike at any time. As most people’s short-term memory is about 10 seconds, always have a notepad or some means of capturing ideas when they appear. If you are brainstorming in a group take turns at the whiteboard to record ideas while the others focus on creative thinking. Consider capturing with a drawing or diagram, not just a written list. Try placing a permanent white board somewhere where ideas can be constantly captured, shared and developed.
    
    Reward effort
    Creativity is not efficient – mistakes are an inevitable part of the process. It relies heavily on experimentation and going down some blind alleys. Don’t let this stop you trying new things; just keep the risks within comfort. Allowing mistakes and encouraging the desire to try is essential, so recognise the effort and celebrate the successes – the rest is part of the process.
    
    Special place
    Creative processes are fundamentally affected by place and time. Get tuned into the places and times where you get ideas. Possibly you recognise and develop the morning coffee routine as an important time, or the evening jog. Within the workplace, provide a special place by treating an area such as a corner of the lunchroom or spare office as a studio. Decorate it with pictures and articles of interest. Have a whiteboard to doodle on and a comfortable chair and CD player. The space should stimulate employees to “be outside of the box” by encouraging new possibilities and connections.
    
    Engage in artistic pursuits
    Artistic processes activate many areas of the brain simultaneously. Encourage employees to try artistic pursuits that interest them. They may not directly bring the work results you are looking for but they will establish and strengthen the systems and processes that produce them. Some activities done as a group, such as painting and theatre, can be powerful ways of developing communication and collaboration with workmates.
- Reducing Lead Times
  (work by Mike Keen)
  - Reducing replenishment lead-times
    The most effective way for businesses to reduce stock is by reducing the supply lead time. Lead time can be defined as the time it takes from when you first determine a need for a product until it arrives on your doorstep. If lead time was zero, inventory could be zero.
    
    In a perfect world, imagine how simple business would be with a lead time of zero and orders being filled instantly. A customer could walk through the door of your business, place their order, and walk out happy with no delay. If business was this easy, you would require no warehouse space, no order follow-up, no inventory counting, no forecasting, no product damage, no obsolete inventory, fewer employees, less risk of theft, and less cost overall.
    
    Of course the real world does not work like this, but the shorter the lead times, the less complex our inventory management will be. In general, you can expect the reductions in inventory as lead times are reduced:
    
    Lead time reduction
    Drive a Cycle-Time reduction programme across your organisation. It will force waste to be raised to the surface. Compress leadtimes externally with vendors and internally within manufacturing by mapping the processes and highlighting where the waste exists.
    
    Waste reduction and elimination
    Carry out a ‘Waste Audit’ in administrative process, such as Purchase Order processing, Production Planning, Warehouse processes, Processing invoices, dealing with customer queries. Use the newly created time for more value added, customer-focussed dialogue.
    
    Inventory management
    As an immediate response to the need to manage cash tightly, many organisations have chosen to cut their inventory levels and generate cash by selling from stock and not replenishing.
    
    Align lead-time “mismatch” between supply and demand
    In terms of managing lead-times, typically, demand lead times can be measured in days, while replenishment (i.e. supply) lead times can be measured in weeks of even months. Match these and inventory will reduce.
    
    End to end supply chain collaboration
    A traditional approach has been to drive inventory (both risk and cost) blindly back up the supply chain by holding suppliers accountable for inventory costs and replenishment processes. However, with response times reduced, this may meet resistance. The more likely way forward is to collaborate at a more detailed and thoughtful level, to establish a new depth to the stocking agreement, that optimises risk to both parties. Relationships between the relevant organisations would then be structured around managing this risk.
    
    Optimise your strategic sourcing
    Lead-time reduction trends in some industries will drive additional considerations, to a deeper level than just purchase price and batch size; sourcing decisions need to factor in speed of response, sustainable replenishment lead-time, and full cumulative lead-time, to deal with demand volatility. Sourcing decisions need to be holistic in nature, to balance cost, with product availability and order fulfilment risk.
    
    Forecasting, product portfolio analysis and range rationalisation
    Range and SKU proliferation, allied to reduced demand visibility, makes forecasting difficult, and inventories may fluctuate, and sometimes seen out of control. This in turncan cripple order fulfilment. A fully-aligned approach to range evaluation, including Product Launch and Exit is crucial. Look for elements of a product range where the additional revenue, or profitability derived from a range extension may be overshadowed by a higher inventory burden.
    
    Need for lead time reduction
    Organisations have to create more than a product. They have to create value for customers; in order to win repeat business and create a partnership that ensures continues revenue streams. Typical sources of value-added propositions are:
    - •The shorter the lead time, more is value there is, in the eyes of the customer.
    - •Customer satisfaction or delight is the result of increased value and reduced lead time.
    - •More customer satisfaction means more new customers, more retained customers, more orders and more profit.
    Competitive advantage will be derived from short lead times
    Putting aside the prerequisites of quality and price, lead-time can be an extremely important competitive advantage. Many organisations are make-to-order businesses, where one cannot hold the product in inventory; as a result, lead time is crucial. An organisation has to be able to repeatedly make and deliver the product to the customer within the time-frame that the customer is willing to wait. Make-to-order businesses directly benefit from lead time reduction due to the removal of excess work-in-process, smaller transfer batches, and/or smaller process batches. Many of these lead-time reductions are identified through value stream mapping, and other Lean tools.
    
    Implementing lead time reduction programmes
    Where does an organisation start? This simple 5 point check-list drives the required focus:
    - •Measure current lead times and set improvement targets. Work on the premise that “things that are not measured cannot be improved”.
    - •Adapt organisational structure from being functionally driven, to being product and customer driven. These product and customer driven groups are value stream organisations or work cells, and do not commit the cardinal sin of omitting back office functions (order taking, finance processes, production planning).
    - •Cross-train employees to deliver greater flexibility. Maintain multi-skilled teams on each shift to create “rapid response” operations...
    - •Allow teams to take ownership for the performance of the value stream, from a quality, cost and delivery (I.e. lead-time) perspective.
    - •Encourage the continual reduction in batch sizes and lead-times from external suppliers and look to localise supply where possible.

articles of interest
- These are external links to managerial articles which may be relevant and of interest.
  
  Prodding a CEO with a Deep Pay Cut
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  Train Your Brain to Focus
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  A Collaborative Approach to Marketing
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  What every CEO needs to know in the first 90 days
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  Don't you just wish your boss could read this?
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  Do you have what it takes to become a leader?
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  Closing the generation gap
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  A New Way to Gain Customer Insights
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  Transforming Healthcare Delivery
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  A Strategist’s Guide to Digital Fabrication
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  Manufacturing's Wake-up Call
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  Be a Better Global Collaborator
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  The Stagecraft of Steve Jobs
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  Building a Shared Mental Model to Rekindle Collaboration
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  What the West Doesn’t Get About China
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  The Decision-Driven Organization
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  CEO Succession 2010: The Four Types of CEOs
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Websites of Interest
- These items come from external sources and are included for your interest. While they do concern professional management, IPMA has no part in choosing the content, and the views expressed are not necessarily those of IPMA.
  
  Motive Consulting
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  Green Technology Applications for Enterprise and Academic Innovation
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  http://www.maverickminds.biz
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  http://www.moveleadership.com
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  http://www.aimac2013.org
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  Transformational leadership
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  Communicating Change as Business as Usual
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  On the Pitfalls of Superstitious Learning
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  http://www.strategy-business.com
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  http://profmsr.blogspot.com
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Book Reviews
- The Mentor's Guide: Facilitating Effective Learning Relationships
  
  Lois J Zachary
  ISBN :ISBN-10: 047090772X
  ISBN-13: 978-0470907726
  Publications:John Wiley & Sons; 2nd edition
  Reviewer: Professor M S Rao
  
  Zachary presents a learning-centred mentoring paradigm with seven critical elements: reciprocity, learning, relationship, partnership, collaboration, mutually defined goals, and development. She unveils that for any mentor it is important to create a learning partnership; help mentees identify goals for learning; negotiate a learning contract; help learners discover what objectives they should set; use multiple modalities and resources to achieve the objectives; manage the learning experience; manage the learning experience; help mentees stay focused on the goals, objectives, and learning strategies; and periodically revisit goals to stay on track.
  [READ MORE]

Editor's Message
- The International Professional Managers Review has been created to provide academics and practitioners a platform and a Journal for their exploration of new ideas, concepts, techniques and practice.
  
  Our Journal aims to provide steady information about the latest theories and practices, right across the world. Recent issues have ranged from individual employability to global operations strategy, and having contributors from four continents.
  
  Our aim is to achieve a high quality of contribution in the areas of management and business. However, we cannot be complacent. The world is changing, and there is always a need to assess and reassess, to try out new ideas, to discuss the results, and then assess again. For this we need to hear from people who are active in professional management, and in research. Theory and practice are interconnected, and we want to join up the gaps.
  
  We are aiming for a mix of approach, including, interviews, case studies, research with conclusions, exploratory ideas, and student papers. Sometimes we will have a special edition, where different authors explore the same topic from different angles, testing different theories, views from different countries, and so on. This should lead to in-depth discussion, more thought, more research, more articles, and further advance in theory and practice.
  [READ MORE]