Assumptions and Risk Management
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Speaking of assumptions (click on this link: Too Slow for His Own Good), here’s a great story that illustrates how we all make assumptions, pretty much all the time.
Mrs. MZM’s niece is a rather petite woman who could be described as a self-reliant person with a very can-do attitude. As a matter of fact, I’ve always admired her pragmatic approach to life.
A few years back she and her husband decided to join the countless hoards who have decided they wanted to own and ride motorcycles, so he of course bought a Harley, while she got a Honda Shadow. As I said, she is petite, so even though the Shadow is already somewhat low-slung, she still had to have it lowered 3 inches so she could comfortably hold it up while standing at a stop sign.
As for riding gear, well, they went all out; they bought the leather pants and jackets, three-quarter helmets (thank goodness they weren’t stupid!), riding boots, leather gloves – the whole kit. Adding to this image were their wrap-around sunglasses, the bandannas they wore on their heads under the helmets… oh, and his long beard.
Man, they looked like a couple of real desperadoes by the time they got fully suited up! But overall, I gotta say they made a pretty cool pair.
One fine sunny day she decided to take a quick trip up to College Station, Texas (home of Texas A&M University!) to pay her son a visit and show off the new bike. So she saddled up the Shadow and took off for the day, timing her arrival at her son’s place of work (they build farm trailers) so they could have lunch together.
Her son was inside with some of his co-workers when one of them noted the interesting phenomenon of Small Woman With Big Shadow (it has a sorta Dances With Wolves ring to it, doesn’t it?) pull up and park.
“Man, get a load of the tough-looking chick on this motorcycle,” the fellow called out.
Guys being guys, they all immediately crowded up to the window to check out the, uh, motorcycle.
Her son stepped back in horror as sudden realization sank in, and in a shocked voice cried out, “Hey, that’s no chick – that’s my mom!”
OK, the question we should be asking ourselves is not whether or not we’re making assumptions – and let’s face it, we all do it, all the time. And, it’s not necessarily a bad thing. No, the real question is, what’s the risk? Or, to put it more accurately, what’s the risk of those assumptions?
Huh? How’d we get from assumptions to risk? Hey, glad you asked!
See, in the engineering field, we often talk about controlling risk. There’s always a safety risk of course, but there are plenty of other, sometimes more subtle risks as well, such as construction risk (what if that crane isn’t available?), financial risk (what if market conditions change?) and start-up risk (what if you build something and it flat doesn’t work? Believe me, it’s happened!)
Well, the way we control risk is to identify the underlying assumptions made during the planning phase of the project, and then figure out ways to respond just in case things don’t quite go as planned. That’s basic risk management. And by the way, this is where bringing multiple brains to bear (follow this link: Keep Thinkin’ Y’all…) really comes in handy.
What’s really great is we can do the same thing in our everyday lives! Instead of acting on our assumptions of such-and-such about so-and-so, for instance, what if we learned to manage the risk instead?
What do you think?
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4 responses so far




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I think the big challenge is that assumptions are beliefs with a currently unproven truth to them, whereas a risk is a potential negative impact on something in the immediate or near future. You can have good or bad assumptions, yet you can only have negative risk.
Do we only focus on the negative aspects of everything and try to manage them? Isn’t simply being AWARE (and educated) of the risks of something, yet making sure you don’t find yourself in such a position a better practice?
Take your crane example. Yes there is a risk that the crane for a project might not be available when you need it. It would be bad to make the assumption that it will or will not be there simply because it is a belief with a “wait and see” action tied to it. Being aware of this risk though, one can then take action to ensure that you won’t be in the position of being without the crane when you need it most.
When it comes to risk management, when do you stop asking the “what if” questions?
Oh, I don’t know, Tully - we might call the risk with a potential positive impact by some other term (windfall, reward, serendipity, etc.), but it’s still a risk - and maybe (?) should be managed as well. (e.g. What if you DO get that raise - or inheritance, etc.? What’s your plan for spending it wisely?)
But going back to the crane example, I’m talking about managing the risk of something not going as planned. In other words, planning manages some of the risk, but what we commonly call “risk management” is how we plan for times when those plans don’t go as, uh, planned.
i think its better to be safe than sorry, no matter the case :/
-Jennay