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Training Transformations

Risk Management Is for Quality, Lean, and the Survival of Our Species

Jeff Dewar's picture
Submitted by: Jeff Dewar
02/23/2016

She slammed the conversation shut with, "It scares me. I don't want to talk about it." We were discussing the ambitious Elon Musk of Tesla, SpaceX, SolarCity, and PayPal fame, a man rumored to be a partial inspiration for Tony Stark of the Ironman movies. Musk argues that space exploration isn't just good for the human soul and our quest for answers; it's also good for something much more pragmatic: The survival of our species.

Helped along by Hollywood, the risks to Earth of NEOs, or "near Earth objects" such as comets or asteroids that orbit the sun and whose paths come close to that of Earth's, are well known. A collision with enough mass and velocity could be devastating for all life. Hence Musk's position that, for our own survival, we must become a space faring, multi-planet species. It's not just NEOs we have to worry about, but disease, earthbound natural disasters, and of course, our own penchant for self-destruction through war and environmental mismanagement.

If that's not enough, we can now add being blasted by the most spectacular fireworks in the heavens: a supernova.

Not this type of Supernova...

...but this type.

Cassiopeia A is among the best-studied supernova remnants. Credit: NASA/JPL-Caltech/STScI/CXC/SAO

A supernova is a very rare event; scientists statistically estimate it happens about three times a century in a galaxy, meaning about 60 times in our own Milky Way since Christ walked the Earth. During these final moments of a dying star, it can outshine the entire output of all the other stars in a galaxy, and release more energy than our sun will in it's entire lifetime. If we're close enough, the gamma radiation could severely harm the Earth.

Current thinking is that we should have at least 50 to 100 light years' distance between us and a supernova to be safe. Our nearest neighboring star, Proxima Centauri, is only four light years away (meaning the light you see tonight from it departed for Earth four years ago). The really tricky part is that by the time the deadly radiation from a supernova reaches us, we'll have only a few hours' if any, notice.

Thankfully, no one is making any predictions of a supernova near us anytime soon—but we have much to learn.

So, perhaps on the largest scale imaginable,i.e., the survival of our species, Musk is talking about risk management, by looking at options to mitigate or even control the probability and impact of unfortunate events. These are the same principles of risk that we apply to the less dramatic, but important, disciplines of organizational management. In particular for a lean leader, my colleague Mike Micklewright has been working on adapting risk management to lean leadership at a highly practical level, by extracting some of the proven risk-based tools from the field of quality.

Risk management is a hot topic in quality today with the release of ISO 9001:2015, and it has found a strong foothold within lean thinking. The standard has long encouraged mitigating and avoiding risk, but it has been addressed only implicitly. The new standard explicitly expects organizations to identify risks affecting company strategy, processes, and product and service compliance with a sharp eye toward customer satisfaction. Additionally, it expects organizations to confront opportunities for improvement based on risk analysis.

What this creates is a very big question mark: How? In practical terms? Specifically, what should we do?

In the short video clip below, Micklewright gives a straightforward answer to those questions, relying on a powerful tool called failure mode and effects analysis (FMEA). This has the advantage of bringing an illuminating practicality to an otherwise mysterious topic.

What's so exciting about this is how the entire concept of risk management is undergoing a shift in thinking. Part of the ISO definition of risk includes "the effect of uncertainty on objectives," meaning that it includes not just minimizing the effect of unfortunate events, but maximizing the exploitation of opportunities. This brings us into an entirely new realm of looking at risk management not only as a way to lessen disasters, but to seize the moment when things are going unexpectedly well. FMEAs fit nicely into this extended and opportunistic application of risk management, with very little alteration.

I have no doubt that the team at SpaceX is looking at every aspect of risk (i.e., uncertainty), both good and bad, in order to meet Musk's vision of sending humans to colonize Mars within a dozen years, and moving millions more there during the years that follow.