Ten Reasons Crises Happen – and what you can do about them.

Risks don’t always materialise one at a time. Sometimes a whole flood of them takes over your project or business and creates a crisis. We usually think that crises emerge from nowhere, but this is rarely true. More often, we can see the crisis emerging with the benefit of hindsight and, with that in mind; we can draw conclusions as to what caused it. These conclusions offer valuable lessons that can allow us to prevent them… if we are wise enough.

Crises most often happen due to overconfidence, which can lead to an inability to perceive the available evidence:

1. Overconfidence in your predictions

The more work we put into our predictions and the more detail we give them, the more we are seduced into believing they are true. Remember that a prediction is just one scenario and any serious manager or project leader will identify a range of scenarios and make their plans flexible enough to deal with all of them.

2. Overconfidence in your plans

Plans are a special type of prediction – but the problem is compounded by each plan being based on its own set of predictions and assumptions. Make sure that each major element of your plan has its own contingency and risk mitigation strategy.

3. Overconfidence in your systems and processes

Systems and processes create a controlled environment, but they can go wrong or, more likely, we discover that they were not quite the right process for the situation. When we misread the context and implement a poorly chosen process, it is bound to fail under pressure. Constantly monitor your systems for the start of failure modes.

4. Overconfidence in your people

People are a common source of error, so constantly review performance and give feedback. Prioritise training and support, and use people and systems to provide back-up to one-another.

5. Overconfidence in random or unpredictable events,
like the weather

The clue is in the words “random” and “unpredictable”. Yet we often let nothing stronger than faith dictate our planning assumptions. Use evidence and statistics to draw up your scenarios and if sudden bad weather can be catastrophic, either change your plan or have a robust crisis plan in reserve.

6. Overconfidence leading to blindness to small but significant changes

The “confirming evidence trap” leads us to notice things that happen as we expect them to and be blind to small deviations that should alert us to forthcoming problems. Evaluate the detailed data and use “fresh eyes” from an outsider if you are in any doubt.

7. Overconfidence leading to blindness to outside influences

We think we are in control, but constantly survey the horizon for external changes that can affect your project or your business.

8. Overconfidence leading to blindness to the possibility of human error

We think we have the best people with perfect training, but many factors can lead to human error, like sensory overload, stress, multi-tasking, or distractions. Build in fail-safe modes if failure can lead to disaster.

9. Overconfidence leading to blindness to human weaknesses

People succumb to temptation – to take a day off unannounced, or to come to work tired, or ill, or under the influence of drugs or alcohol. We can be seduced by charismatic or attractive colleagues and are susceptible to greed, fraud and bribery. If you think your people are different, ask “what makes them so?” You’ll need a pretty special answer.

10. Overconfidence leading to deafness to warnings

Cassandra warned the Trojans but, believing their walls impregnable, they were deaf to her warnings. Which of your walls have weaknesses. The Greeks came in through the main gate. Listen to Cassandra and evaluate her warnings objectively.

 


Risk Happens! by Mike ClaytonLearn more about managing risk and
avoiding failure in business projects in
Dr Mike Clayton’s new book,
Risk Happens!

See www.riskhappens.co.uk for details.

Buy it in paperback from Amazon here,
or in Kindle format, here.

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