Monthly Archive: March 2016

Understanding How Risk Management Can Improve Organizational Performance

One of the biggest challenges in risk management is risk identification. Humans are naturally optimistic, therefore we do not like to recognize or discuss risks. We need to incorporate processes such as scenario planning and the pre-mortem technique into our forecasting practices. These techniques help us overcome our aversion to recognizing and discussing risks. Only after we have identified risks can we implement tactics to reduce their probability.

Merit is frequently asked to help businesses, federal agencies and membership organizations reduce or mitigate risk – regardless of their size and business type. Often their project teams collaborate and discuss methods for improving their risk status but have proven to be flawed. The most common flaw that sets them back is their goal to have all risk plans drive their risk probability and impact to zero, in which case it would not be a risk.

Risk_RegisterStandard risk responses include Avoidance, Mitigation, Transference, and Acceptance (passive/active). At Merit, we developed a reporting process that would show that the risk factors were decreasing as the project progressed. Supplemented with suitable risk responses, the true reduction of risk probability occurs over time.

The added value that we incorporated into the risk management process was two-fold. First, because of the desire to drive the risk to as low as possible, the use of multiple risk responses could be utilized. The second process improvement would be not only to subsequently reassess the risk, but also to re-evaluate the risk probability and impact matrix after the implementation of the risk response over time.

Probability_Impact_MatrixThe Probability and Impact Matrix is one of the tools that we recommend in a risk management strategy.  It is superimposed with risks that are labeled or numbered as in the above example. “Red” area risks were uniquely documented on a trending month-to-month basis such that it could be seen “driving” toward zero.

The implementation of a risk response would then “reclassify” the risk event for the next reporting period. However, the biggest impact on reducing risk is time.  Time because we are progressively refining our process as our project develops, and because the physical window (amount of time available) for a risk event is reduced.

We invite you to learn about our modified process template so you too can incorporate it into your project plans. For more information, to learn other advanced risk monitoring, reporting, and controlling techniques or to schedule a risk management training customized for your team, contact Jim Wynne at jwynne@meritcd.com or by calling (610) 225-0449.

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The Pre-Mortem Technique

During my research on how to make better decisions I came across the pre-mortem in the writings of Nobel Prize winner Daniel Kahneman. He notes in his book, Thinking, Fast and Slow (2011), that the pre-mortem technique is valuable in the decision-making process because it has two main advantages. PreMortemFirst, it overcomes “groupthink” that affects many teams once a decision appears to be made. When groupthink is in effect, the wisdom of a plan or decision is gradually suppressed and eventually come to be treated as evidence of disloyalty. The collective suppression of doubt contributes to the group’s overconfidence, which is often a tragic flaw.

Second, it unleashes the imagination of knowledgeable individuals in a much needed direction—the opposite direction of the decision. The principal advantage of the pre-mortem technique is that it legitimizes doubts and encourages everyone, even supporters of the decision, to search for possible threats not considered in the decision-making process. I immediately recognized it as an excellent technique for decision-making, risk management and general leadership.

Because this has proven to be of great value, I would like to share this excellent technique with you. The pre-mortem is easy to implement once the team reaches a decision or finalizes a course of action. Here’s what you need to do:

Step back and state the following: “Imagine that we are one year into the future. We implemented (the decision and plan) exactly as decided here today. The outcome was a total complete disaster. Take 5 to 10 minutes to write a brief history of that disaster.” If someone asks: “What do you mean by a total disaster?” Reply: “In any and every way imaginable it was a total failure.”

Then, explore all the possible reasons that the decision or plan failed. By taking this opposite approach to brainstorming the ideas, your team will likely realize that there are more points that need to be thought through before the plan is implemented.

Merit Career Development incorporates this technique into our leadership, strategic decision-making, risk management and project management classes and it is very well received.  In one recent class the participants clutched the flip charts from the group discussion. I saw this and asked what were they going to do with them? I was told that they were going to present the findings to upper management; they had never participated in such a rewarding experience.

Merit can help guide your team through various tools and techniques to optimize your team’s knowledge, skills and ability with techniques and tools such as pre-mortem and many others. Please contact Jim Wynne at jwynne@meritcd.com or call him at 610-225-0449 to schedule training to learn this and other valuable decision-making techniques.

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Emotional Intelligence (EQ): The Essential Secret to Great Performance

The concept of emotional intelligence, EQ, has been studied for over 30 years. Research shows that high EQ predicts success beyond an individual’s knowledge, skills and abilities. Emotionally intelligent leaders have significantly greater annual profit growth, increased customer satisfaction, and higher personnel retention. In management, the more senior the leader, the more the EQ matters. In sales and customer service capacities, the higher EQs correlate directly to success.

RedheadStudies show that lack of EQ may limit a person’s ability to achieve results. Lower EQ scores correlate with lower merit pay increases, lower job satisfaction and more burnout. Managers’ and supervisors’ EQ scores correlate with their performance ratings.

The definition of emotional intelligence has been the subject of ongoing debates; however, researchers all agree that it consists of two principal components. The first component; intrapersonal skills or self-awareness, is the ability to recognize one’s emotions as they occur, helping one gain self-control in potentially emotionally charged situations.

The second component, interpersonal skills or social awareness, is the ability to recognize others’ emotions. The ability to express empathy enables one to have more positive relationships and minimize unproductive conflict. EQ helps put people at ease, build and mend relationships, confront problem employees, and manage change.

It is important to note that emotional intelligence can be learned. Understanding and incorporating specific EQ skills, techniques, and behaviors can help improve both the intrapersonal and interpersonal skill sets. An intra-personal skill, self-monitoring, can help one can limit or minimize emotional hijacking. Let‘s look at this closer…

Emotional IntelligenceWe all have specific words or phrases that are steeped in emotion. During the 1960s and 70s, the term “nuclear power” raised a great deal of emotion—both positive and negative. Similarly today we have emotionally charged words or phrases such as “gun control”, terrorism, and consumer privacy. It is important to recognize one’s own emotionally charged phrases and stop the emotional hijacking that is about to take place.

By recognizing our emotional responses when we hear a cue by self-monitoring, we can prevent emotional hijacking before it takes place. Stopping to recognize the emotional trigger is an important first step. Taking a deep breath, and/or silently counting to 10 can help us regain composure and react in a rational manner.

As for interpersonal skills, empathy helps us develop more positive relationships with others at work. Increasing our display of empathy enables us to connect with another person on an emotional level, thus allowing us to develop a meaningful, trusting relationship.

The question remains, however, how much emotional intelligence do you have—what is your baseline? Do you have an EQ deficiency, or are you well above average? There is only one way to know your EQ baseline and that is to take an assessment. Many exist on the Internet, some free others fee-based, however they may not stand up to statistical reliability and validity standards.

We invite you to take our free online self-assessment http://www.meritcd.com/assessments/eq/ and see how you compare to others; it takes less than 15 minutes. You will receive a report comparing you to the general population and you will know your starting point. With your baseline in hand you can select appropriate techniques and build your self-awareness and social awareness skill sets, and improve your emotional intelligence.

Would you like some guidance to improve your staff’s EQ? Merit offers half-day and full day workshops that help participants understand, identify their baseline, and strengthen their emotional intelligence. With exercises and interactive assessment tools, this workshop is engaging and life changing. For more information, please contact Jim Wynne at jwynne@meritcd.com or call him at 610-225-0449.

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