Quote from sachinm on 28 September 2023, 5:51 pmShare your ideas on:
- Breaking out of the norm (risk in a complex world)
- Elements of Risk Topology
- Exploring Complex System Thinking 4 Foundation Principles
.....other means that you have employed to identify, and explore areas of complexity.
Background MaterialElements of the Risk TopologyUsually this is considered as Physical/Material/Operational/Product/service risk or otherwise Commodity/Commercial risk and so on. So, we will have to define what we mean by Risk Topology.
- Connectors
- Containers
- Liminality
- Sense-making
- Constraints (Robust/Resilient)
- Constructors
So, for example in the last "Constructors" these are organisational mechanisms which create a replicable outcome (a process, a trial etc).
Exploration of the Four Foundation Principles of Complex System Thinking
Warren Black, in his PHD at Queensland University of Technology (QUT), identified four primary characteristics of natural systems resilience:
- The first two of these describe how organisations need to be prepared for change:
- Recognising danger signals in the environment
- Making plans to minimise their impact and maximise the opportunities they offer by focusing more on the connected whole of the system rather than its individual components
- The second two describe the potential response: putting into action readiness plans and, crucially,adapting to any large changes in the environment by altering behaviours permanently.
- Reactivity: recognises that because complex system behaviours are influenced by signals and feedback, they react to changes in the environment and to the behaviour of the other elements in the system.
- Adaptation: recognise that all genuinely complex systems will shift through differing states and orders as they naturally evolve and transition. With each new state or order, new phenomena and behaviours specific to that order will emerge.
Warren Black has formulated the four foundational principles of complex systems thinking as below:
- First Principle: management needs to accept that the system in question is advanced and complex, and that conventional approaches to project and risk management will not work as well, so new approaches need to be thought through and developed.
- Second Principle: focus more on the connected whole of the system rather than its individual components. We see this focus on the individual
components, rather than the system as a whole, as individual risks are often put on a heat map and assigned separate controls that are prioritised in
relation to impact and likelihood. Whereas macro risks are delegated upwards to be managed at the portfolio or organisational level through Business Continuity Planning (BCP).- Third Principle: recognise that because complex system behaviours are influenced by signals and feedback, they react to changes in the environment and to the behaviour of the other elements in the system.
- Fourth Principle: recognise that all genuinely complex systems will shift through differing states and orders as they naturally evolve
and transition. With each new state or order, new phenomena and behaviours specific to that order will emerge. For this reason, standardised, “one size fits all” approaches to management control are extremely limited when engaging complex problems.Citation: ARTHUR PIPER, "Complexity and risk" in Enterprise Risk Magazine Autumn 2022
Share your ideas on:
.....other means that you have employed to identify, and explore areas of complexity.
Usually this is considered as Physical/Material/Operational/Product/service risk or otherwise Commodity/Commercial risk and so on. So, we will have to define what we mean by Risk Topology.
So, for example in the last "Constructors" these are organisational mechanisms which create a replicable outcome (a process, a trial etc).
Exploration of the Four Foundation Principles of Complex System Thinking
Warren Black, in his PHD at Queensland University of Technology (QUT), identified four primary characteristics of natural systems resilience:
Warren Black has formulated the four foundational principles of complex systems thinking as below:
Citation: ARTHUR PIPER, "Complexity and risk" in Enterprise Risk Magazine Autumn 2022
Quote from sachinm on 4 October 2023, 7:59 pmHere we show how one can map constraints as an example to demonstrate their utility...
The theory of constraints argues that most systems outcomes are limited by certain bottlenecks (constraints) and improvements away from these constraints tend to be counterproductive because they just place more strain on a constraint.
Constraint mapping is useful for 3 reasons:
- Once you map constraints, distribution and delegation of decision making and action is easier and safer.
- Mapping and managing constraints help avoid a direct connection between a situational assessment and a decision about an action to take.
- Mapping “Containers” at the innovation phase of a process can create a shared understanding for the group who are involved.
Now we can identify which of the constraint clusters are acting as constructors. So, not acting as a barrier but instead creating a replicable outcome (a process, a trial etc).
Here we show how one can map constraints as an example to demonstrate their utility...
The theory of constraints argues that most systems outcomes are limited by certain bottlenecks (constraints) and improvements away from these constraints tend to be counterproductive because they just place more strain on a constraint.
Constraint mapping is useful for 3 reasons:
Now we can identify which of the constraint clusters are acting as constructors. So, not acting as a barrier but instead creating a replicable outcome (a process, a trial etc).
Quote from sachinm on 5 December 2023, 4:36 pmHere, we show how PRUB-Logic ( Projects, Results, Uses and Benefits) created by Phil Driver, can clarify risk management interactions between Projects and Benefits.
Citation: "PRUB-Logic: Risk Management – Where Strategies Fail" © Copyright Phil Driver 2023
**Note: The below is extract taken from the original paper "PRUB-Logic: Risk Management – Where Strategies Fail" which can be downloaded by logged in Users**
In the physical world: Projects create Results that enable Uses to create Benefits
A set of multiple Projects, Results, Uses and Benefits is a Sub-Strategy. A set of Sub-Strategies is an Open-Strategy. Frequently many Projects are required to produce the set of necessary and sufficient Results to enable multiple Uses and Benefits, with the crucial risk-management interactions, as in Figure 1.
Figure 1: The generalised PRUB-Logic Sub-Strategy with dashed arrows indicating the risk-management interactions
Four key facts that greatly impact on the risk management of Sub-Strategies:
- Only "Uses" create Benefits! Projects create assets, not Benefits. ‘Benefits realisation’ is achieved by "Uses", not by Project managers. Similarly, Benefits do not get ‘delivered’ by Project managers, they get ‘created’ by Uses.
- Most "Uses" are voluntary. People don’t have to Use the Results of Projects.
- While "Uses" are enabled by sufficient and necessary Results, "Uses" must also be inspired by Benefits, or they won’t happen (occasionally some Uses can be compelled by legislative Results).
- The worth and level of inspiration from the Benefits must be determined by the users, not determined by Project managers/sponsors.
From a risk management perspective, PRUB-Logic, Sub-Strategies and Open-Strategies only work if they are simultaneously:
- Logic: Is the set of proposed Results, theoretically, both necessary and sufficient to enable the hoped-for "Uses"?
- Evidence: Is there compelling Evidence that the Results really will be (voluntarily) "Used"?
- Worth: Will the Worth of the Benefits created by the Uses sufficiently inspire the users to undertake the "Uses"?
In answering the 3 questions above, we complement the traditional risk-management focus on Project Management and Cost-Benefit analysis.
To reduce the risk of Uses not happening as forecast, it is essential to identify all the right Results that are needed to fully enable the Uses. Failing to create a robust PRUB-Logic Sub-Strategy is a source of many non-productive Projects with a high risk of failure to meet the Project-sponsor’s expectations.
Do we have robust and compelling Evidence that the Results really will not only be Used but will be used at a sufficient level to justify the Projects?
For a PRUB-Logic Sub-Strategy to work, every single Link between Projects, Results, Uses and Benefits must be valid. This will support Uses to create worthwhile Benefits.
A PRUB-Logic Sub-Strategy will not happen unless Uses generate sufficient global worth and users individually receive sufficient motivational worth to inspire them to undertake the Uses.
Risk-management of a PRUB-Logic Sub-Strategy therefore requires an in-depth, quantitative understanding of the type, magnitude and worth of Benefits generated by Uses as defined by those who gain the Benefits.
In summary, risk-management of Uses and Benefits using the construct of a PRUB-Logic Sub-Strategy requires:
- Logic: A theoretically logical PRUB-Logic Sub-Strategy that identifies all the Projects, Results, Uses and Benefits (social, economic, environmental, and cultural) that will start with the Projects generating a necessary and sufficient set of Results that will enable Uses to create sufficiently inspiring Benefits for the PRUB-Logic Sub-Strategy to be self-sufficient
- Evidence: Compelling Evidence that users know about and genuinely will undertake the anticipated Uses
- Worth: Complete confidence that the net global and motivational worth of the Benefits exceeds the costs of the Projects plus the costs of the Uses
Here, we show how PRUB-Logic ( Projects, Results, Uses and Benefits) created by Phil Driver, can clarify risk management interactions between Projects and Benefits.
Citation: "PRUB-Logic: Risk Management – Where Strategies Fail" © Copyright Phil Driver 2023
**Note: The below is extract taken from the original paper "PRUB-Logic: Risk Management – Where Strategies Fail" which can be downloaded by logged in Users**
In the physical world: Projects create Results that enable Uses to create Benefits
A set of multiple Projects, Results, Uses and Benefits is a Sub-Strategy. A set of Sub-Strategies is an Open-Strategy. Frequently many Projects are required to produce the set of necessary and sufficient Results to enable multiple Uses and Benefits, with the crucial risk-management interactions, as in Figure 1.
Figure 1: The generalised PRUB-Logic Sub-Strategy with dashed arrows indicating the risk-management interactions
Four key facts that greatly impact on the risk management of Sub-Strategies:
From a risk management perspective, PRUB-Logic, Sub-Strategies and Open-Strategies only work if they are simultaneously:
In answering the 3 questions above, we complement the traditional risk-management focus on Project Management and Cost-Benefit analysis.
To reduce the risk of Uses not happening as forecast, it is essential to identify all the right Results that are needed to fully enable the Uses. Failing to create a robust PRUB-Logic Sub-Strategy is a source of many non-productive Projects with a high risk of failure to meet the Project-sponsor’s expectations.
Do we have robust and compelling Evidence that the Results really will not only be Used but will be used at a sufficient level to justify the Projects?
For a PRUB-Logic Sub-Strategy to work, every single Link between Projects, Results, Uses and Benefits must be valid. This will support Uses to create worthwhile Benefits.
A PRUB-Logic Sub-Strategy will not happen unless Uses generate sufficient global worth and users individually receive sufficient motivational worth to inspire them to undertake the Uses.
Risk-management of a PRUB-Logic Sub-Strategy therefore requires an in-depth, quantitative understanding of the type, magnitude and worth of Benefits generated by Uses as defined by those who gain the Benefits.
In summary, risk-management of Uses and Benefits using the construct of a PRUB-Logic Sub-Strategy requires:
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