Reviewed by John Greenwood PMP®
Exploiting Future Uncertainty is the latest book from The Risk Doctor, a leading international risk management thinker and practitioner. In this book, he discusses the opportunities for creating commercial value out of a structured and realistic approach to the management of uncertainty, both through the minimisation of threats, and the exploitation of opportunities.
The book considers, it turn; risk management in a business context, the underlying principles of risk management, steps to operating an effective set of risk management processes, personality types and the human side of risk management, and finishes with some reflections on risks and their management in the wider world. The book is delivered in Dr Hillson’s engaging and informative style, familiar to anyone who has heard him speak. It avoids being dry, or prescriptive, or using jargon and technical terms; and delivers a series of ideas and themes to consider when introducing and operating processes to identify and manage uncertainty in a business.
In considering risk management in a business context, several points are raised that will have been encountered by anyone trying to raise the maturity of risk management in their organisation; that there is a cost of entry, that it can be difficult to prove the value of investing in a programme to increase maturity, and that risk management can energise innovation. The difficulties in managing people’s perceptions and attitudes to risk and its management are developed in a later chapter, which includes a discussion of the non-rational factors that influence peoples’ perceptions of risks, such as perceiving risks from man-made activities as inherently more hazardous than natural risks, or concentrating on risks that have received recent publicity in the news.
The core of the book deals with the principles of risk and management, and the actions needed to drive risk management in the business. Dr Hillson develops his definition of risk as ‘an uncertainty that matters’, and introduces the idea of a risk ‘meta-language’ that drives the statement of risks in a clear, concise manner, which focuses on the precise nature of the uncertainty and its potential impact on the objectives. It is through this rigour in capturing the uncertainty that targeted plans for responding can be developed and managed.
The chapter entitled ‘Making it Happen’ has a clear and concise description of the elements necessary in an effective risk management process. Where many organisations’ risk management comprises merely identifying some nebulous areas of uncertainty, an abstract approach to quantifying the threats in terms of money, and the reserving of some budget to cover those threats; Dr Hillson’s approach drives responses that reduce the erosion of value due to threats, and that identify and seek to maximise the value that accrues from exploiting opportunities. He explicitly states in his requirements for a process that management of risk requires action during the project and, possibly the most important aspect in an organisation that plans to deliver more than one project, identifies the need to capture the experiences of managing the risks so that similar projects in the future are executed even more effectively.
Whist the book does not prescribe a detailed approach to management of risk, and doesn’t contain a set of processes and procedures that can be implemented in an organisation as a ‘one size fits all’, there is sufficient material in the book that producing a framework to manage risks, and developing the detail and capability of the processes as the organisation matures, will be well informed by one of the world’s best renowned experts in risk management.
ABOUT THE REVIEWER: John Greenwood has around fifteen years of project management experience gained in the engineering and IT industries, and has been an active member of the PMI UK Chapter. He holds a degree in Physics from the University of Birmingham, and has worked for a number of years as a Systems Engineer, where he has used Monte Carlo techniques to analyse and predict the performance of radar systems.