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|In: Industry Commentary|Last Updated:

Tom Clancy, in A Sum of All Fears, offered this smug assessment: “The Roman bridges of antiquity were very inefficient structures. By modern standards, they used too much stone, and as a result, far too much labor to build. Over the years we have learned to build bridges more efficiently, using fewer materials and less labor to perform the same task.”

Seven years ago, InfoWorld published this response in KJR‘s predecessor, the Survival Guide (“The sum of all projects,” 8/14/2000): “… some of those Roman bridges are still standing a millennium later, while some of our more efficient ones have tumbled into the bay. Adherence to budgets and schedules is our preeminent ethic. One suspects Rome held different values.”

Last week, another American bridge, just 40 years old, tumbled into the Mississippi river in the middle of Minneapolis. Those built by the Romans continue to stand.

What exactly went wrong in Minneapolis isn’t yet certain. We do know already that recent inspections of the bridge did not report that all was well. They reported risk.

The state of Minnesota, my home state, has under-invested in its transportation infrastructure for at least 25 of the last 25 years. So has the rest of the country. We have no reason to believe the 35W bridge collapse will be the only consequence. Current estimates suggest we’ll need to spend $10 billion a year for 20 years to catch up just on bridge maintenance. That will require new taxes. Do you think many voters would support a preventive maintenance platform, should one party or another be to propose it?

In the meantime, roughly 150,000 bridges have a similar risk of failure.

For those who propose the BIG/GAS theory (Business Is Great/Government and Academics are Stupid) as the culprit — don’t even think about it. Business leaders are at least as prone to the same thinking. As a recent KJR explained (“The value of a little failure here and there,” 7/16/2007), they are far more likely to invest in revenue enhancement or cost reduction than in addressing risk, because investments in revenue enhancement and cost reduction yield tangible returns.

In that column I used risk mitigation to cover all ways of handling risk. Two correspondents — Tom Reid and Max Fritzler — recommended a different vocabulary and a more sophisticated way to think about the subject.

The proper cover term, which will be used here from now on, is “risk management.” To manage risk you can Avoid, Insure, or Mitigate (Max supplied the acronym, AIM).

Avoidance means reducing the likelihood that the risk will become an event. Preventive maintenance is one of the most important ways to avoid risk. Staff training, to increase competence, is another.

Insurance includes all tactics that deflect the consequences of risk to someone else. Insurance is the label because that’s the best-known way to deflect the consequences of risk, but there is another. It’s called blame-shifting and it’s quite a popular alternative. Quite a bit of political propaganda goes into blame-shifting. In business, backstabbing often has the same goal. Both are annoyingly effective at deflecting the consequences of risk.

Mitigation means reducing the impact should the risk turn into actual events. Fault-tolerant system design and business recovery planning are well-known risk mitigation tactics. So are cross-training and succession planning.

There is, of course, a fourth risk management tactic. It’s probably the most popular of them all. It’s called hoping. Synonyms are keeping your fingers crossed and denial. Theoretically, you can also accept the risk — consciously choose to do nothing. Usually, though, acceptance is just another synonym for hoping.

Denial has an antidote — developing a culture of honest inquiry. It’s how you get an accurate assessment of risk.

It is, perhaps, the most difficult change in business culture you can attempt. You have to constantly and insistently ask, “Are the data we have trustworthy? Complete? Can we get better data? Are we drawing the right inferences? Will they lead to the results we want?”

And then, “Do the data say our decisions gave us the results we want? If not, what did we miss? What was wrong about our inferences and decisions? What will we do differently next time?”

Tough questions.

You’ll note that most risk management fits our definition of a decision — it requires the commitment of time, staff and money. The exceptions are blame-shifting and hoping, which don’t.

Is it any wonder, then, that blame-shifting and hoping are the most common risk management strategies in America today?

Or that another American bridge has crumbled?

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|In: Leadership|Last Updated:

Carl Sagan told the story of the last question on a biology final exam: “You’re part of the first expedition to Mars. How would you determine if there’s any life there?”

One essay — it earned an A — went like this: “Ask the inhabitants. Even a negative answer would be significant.”

Here on Earth, the anthropologist and adventurer Thor Heyerdahl sailed a raft, the Kon Tiki, from South America to Easter Island. His goal: To demonstrate that his hypothesis regarding cultural diffusion from South America into Polynesia was possible.

Prior to Heyerdahl’s landing, archaeologists and those who play on the fringes of scientific inquiry had developed a wide variety of elaborate theories to explain how the island’s famous multi-ton stone statues came to be erected. Among the more popular: Space aliens did it, presumably as a change of pace from leaving crop circles in the English countryside.

Heyerdahl took an approach to discovering the answer that was, if anything, more daring than sailing his raft across the Pacific ocean. He asked the inhabitants, who happily demonstrated the technique their ancestors had used.

In corporate America, right now as you read these words, there are companies in trouble. The executives responsible for running them don’t know they’re in trouble, but they are.

The reason these executives don’t know their companies are in trouble is that they’ve never pondered the question of life on Mars, nor the mysteries of Easter Island. Their knowledge of the companies they lead comes from financial reports, information provided to them through the chain of command, and their memory of how things used to be when they were lower in the hierarchy and closer to the action.

Were they to ask the inhabitants — were they to talk directly to employees and customers — they would know that:

  • Recent attempts to cut the cost of raw materials have resulted in deteriorating product quality.
  • The “successful” system replacement project didn’t actually turn off the old system, which means that a third of all financial transactions are posted using unaudited ad hoc patches.
  • Following the recent offshore outsourcing effort, on-shore employees are spending a quarter of their time translating variable names and comments written in Urdu to English. They charge their time to maintenance so the outsourcing project will look more profitable.
  • Employee morale is in the sub-basement because, following the significant wage concessions by employees needed to save the company, the top executives received serious bonus packages. Employees drew the obvious conclusion — that their wage concessions were needed, not to save the company, but to fund the bonuses. (Okay, this last one didn’t require talking to the inhabitants. Even the tiniest amount of empathy would have sufficed.)

Many executives have read about the importance of “walking around.” And so they do. They walk around, exchange pleasantries with “rank and file” employees and figure they’ve taken the pulse of the company.

An observation which might or might not be relevant: In my admittedly limited and indirect experience, officers (and former officers) who use the term “rank and file” are also the ones who consider their military forces to be nameless and faceless troops who they blithely send out to be shot at for no valid tactical reason.

They are also more likely to refer to dead civilians as “collateral damage,” not as tragedies.

The officers who refer to these same people as “soldiers” or “men and women” are more likely to choose the right battles and tactics. They are also more likely to have real conversations with the men and women who do the actual fighting and know what conditions are really like on the ground.

They listen, that is, to the inhabitants.

Since we’re on the subject of military tactics, here’s a piece of wisdom that’s at least as old as Sun Tzu: The battle is always for hearts and minds.

Taking and holding land certainly matters. It just doesn’t matter as much, because if you have the hearts and minds of the men and women who fight for you, and of the civilians who live in the disputed territory, you’ll end up with the land. Without their hearts and minds, you’ll lose tomorrow the land you took today.

While the stakes are less dramatic, as an IT leader the same wisdom applies to you. Whatever you’re trying to accomplish, you first need to win the hearts and minds of the men and women who have to make it happen.

They are the inhabitants. If you want their hearts and minds, talk with them.

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