Cascading Risk Management Consulting
Over-Confidence and the Lack of Organizational Self-Critique is a Self-Destructive Habit
ERM requires detailed knowledge of the Organizational Dynamics that create the Work Culture. Cascade Effect Thinking can help in this effort with its 40 families of deep analysis, surveys and brainstorming tools that probe the health of organizational cascades at 5 levels of hierarchy that starts from Leadership and radiates down to the act of responding to critical business issues (right).
In a Cascade Effect, Cause and Effect can be separated by much time and space. Leadership decisions and behaviors (The 15 Aces), creates a work culture over time (The 11 Kings), which shapes the quality and efficiency of the work processes (The 19 Queens), which predestines the performance of those processes (The 9 Jacks). The organization then exhibits its own good or bad style of response to critical issues (The 2 Jokers) that respond to its performance issues. Every Cascade generates one of 5 types of feedback loops to leadership. Leadership then has the opportunity to improve or ignore those learning opportunities. The quality of those feedback loops makes the difference between successful, mediocre or failing organizations.
A huge threat to any organization is created when its inhabitants look in the mirror and see a much nicer reflection than what reality should dictate (right). Then when performances do not meet their expectations, people tend to blame people instead of the inefficient and risky processes in which all employees are operating in.
Blame the processes when things go wrong and not the people because when you put good people in bad processes, the bad process always wins. This makes employees look much more incompetent than they really are.
Behind every failing organizational lies inefficient and risky processes, not necessarily bad people or much better competitors. The true barriers to greatness are mostly internal, not external.
On the left, we see the dynamics that are alive in well in every organization, every minute of every day. Risks (red framed cards) and Best Practices (green framed cards) silently and openly battle for control. This creates wasteful organizational turbulence, which can create more destructive threats than any competitor can produce.
If leaders cushion themselves from the imperfect realities of organizational operations, they will underestimate these risks and perceive a much rosier alternate reality than what really exists. When leaders do not perceive internal risks, they will not commission the required efforts to improve such situations. Leaders must learn to candidly and sincerely solicit inputs from their employees about what is really going on in order for them to make intelligent decisions to counteract the seeds of self-destruction that are present in every organization where humans operate.
These invisible risks, strife and frustrations can quietly link to create unannounced disasters that catch them off guard. Often such disasters and conveniently labeled as "Black Swans" (unpredictable surprise events), when in reality they are screaming "White Swans" that cannot be heard by those who act like an ostrich with their head, eyes and ears stuck in a well insulated hole in the ground.
Enterprise Risk Management (ERM)
ICER's Risk Management Consulting Techniques are based on Cascade Effect Thinking Principles. We live in a fragile world filled with partial solutions and weak defenses against the most threatening of all invisible risks, those which come from within an organization itself. No matter how well we design our products and processes, stealthy risks still manage to create unexpected problems that hold us back from greatness. Upon closer inspection, we will find that these barriers to greatness are a network of silent risks scattered throughout an organization.
Individually, these Risks might just seem annoying but not necessarily destructive. However, as this linked network of taboo talk rules, Trojan Horse risks, inefficiencies, weak organizational learning, undesirable behaviors and flawed management practices join forces, they can create highly disruptive and threatening Organizational Cascades.
Cascade Effect Thinking is the art and science of identifying and mitigating multiple subtle risks and their linkages within an organization that can have exponential negative cascading effects.
Modern Risk Management techniques and other analytical thinking techniques in business have not kept pace with the way in which the world actually operates, which is in complex cascades, not in pairs of single cause and effect relationships. A variety of research studies and social experiments have demonstrated the existence of cascading effects that impact individuals, organizations, countries and the world.