Managing Risk - Remove the Emotions

I have just been asked a question on a reply to my posting "Risk Vs Reward - We are told that the more we risk the greater the reward. Only if the risk is a calculated one is this a good motto to live by - Lance Burdett."

José Maria Oliveira asked: please give me some methods, even if they are statistical, or else other risk calculations methods in our own lives in all aspects. As you know, the methods based on terms "historical", eg in previous years are already very old and used, however are used. It would be very interesting and motivating read an article of yours in this sense....

I use a simple template to determine risk if I am emotional about something that I want to invest my time into which takes the emotion out of the equation. This can be done in your head for simple things but for bigger risks should be listed;

Draw a spreadsheet chart then place heading across the top - Objective, Risk, Consequence, Likelihood, Mitigation.

Objective = What do you want to achieve, what is the ultimate aim or aims. List the objectives down in the first column.

Risk = What can occur when you are wanting to achieve your objective, make a list beside each aim.

Consequence = If the risk occurred when you were after your aim, what will happen?

Likelihood = Is the likelihood of this happening Low, Medium, or High. Base this on your experience as much as anything else. You can color code the likelihood with green, orange and red if you want to.

Mitigation = What action can you take, what can you do so that the Risk doesn't happen.

Make the list of all of the possible objectives and all of the possible risks. Think outside the box, come up with extreme examples. This will help your brain to work through the problem piece by piece.

Now look at the chart and ask yourself, is the mitigation going to overcome the consequence, would it reduce or eliminate the risk. If it does then reduce the likelihood downwards.

Now have another a look at your chart and see what could go wrong and is it that bad?

I hope this is helpful.

How to Actively Listen

There are many variations of active listening available on the internet.  Over the next few days I am going to take you through the eight strategies used successfully world-wide by those involved in crisis negotiations.

Minimal Encourages

The simplest of the eight strategies, minimal encourages are verbal nods, something that we use to show another that we are listening.  Used mainly when talking on the telephone for those who we can't see, these are short words and statements designed to indicate that we are listening.

Use words rather than "um’s" and "ah’s" which can sound like grunts if not properly executed.  Words such as "yes", "I’ve got that", "that’s helpful", and "sure". If your conversation is with an angry or sad person do not use the word "okay" as what they are saying may not be okay and will garnish a reprimand.

Take care that do not interrupt the other person with a minimal encourager when they are venting, getting something off their chest.  You do not want to interrupt an angry person mid-stream as this will inflame the situation.  If you use a minimal encourager and it is not clear what you have said, the other person will stop and ask for an explanation.  Worse still you may get back "You always want to do the talking". 

A danger when we use minimal encourages too often is that our minds tend to wander off.  This is more so an issue for men.  If you are speaking with a man and they use three minimal encourages in a row it means that they are not listening to you.  Try it by asking them "what did I say" after they have used the third encourager.

Tomorrow we will examine open-ended questions.

So you Want to Change?

It's only been four days since Christmas yet the excitement is growing for what 2015 will hold. New Year is a great time to reset your goals and to look for ways in which to improve yourself. For those adventurous enough, why not take the ultimate leap and start your own business?

From someone who has been an employee for over 40 years I can tell you to expect mixed emotions. There is excitement about the prospects, anticipation of work, satisfaction as you achieve milestones, and most of all the one emotion you will encounter daily is fear. Fear of the unknown, fear of failure, fear of loss of confidence, fear that you will lose everything. Fear is a necessary part of life, it keeps us from doing dumb things. Unfortunately fear can also hold us back.

Of all of the hundreds of self-improvement books and biographies by famous (rich) people that I have read, all espouse the virtue of 'giving it a go'. "Easy for them" I hear you say, "they are rich". "They don't know my current circumstances - I have a mortgage, children to feed, elderly to care for, pets to look after, a student loan to repay, etc., etc., etc". I can tell you that every one of them said the same thing before they started, each had their own roadblock to surmount.

I do not know where my new career path will take me, all I know is that at least I 'gave it a go'. What's the worst that can happen? I may have to go back to being an employee. So, if you feel like jumping on the roller-coaster of emotions then take the leap yourself, start your own business. You don't want to be left wondering "what if".

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Get Rid of The Praise Sandwich

Previously when we met with staff to tell them about something that we wanted them to improve on, we delivered it as a praise sandwich.  We told them what they are doing well, what we want them to improve on, and then something good that they were doing.

In today's fast-paced  world, communication strategies have changed dramatically.  No longer can we concentrate for any length of time.  15 seconds is the longest period that we can hold the attention of others.  That's why sporting events are now condensed, advertising is much shorter, even generational periods have reduced - Baby Boomers (30 year time span), Gen-X (20 year time span), Gen-Y (10 year time span).

As managers it is important to know this when meeting with your staff, even more so when holding performance improvement meetings.  Your staff member is in a heightened emotional state as they enter the meeting room, wondering what they are going to face.  Their brain is alert to the need to fight or to flee, their listening skills enhanced. 

If the first thing that they hear from you is something that they are doing well, the brain will relax and will often switch off.  When we deliver the message about what you want the person to change, they may not hear it.  As you finish off the meeting with something good that they employee is doing, their brain immediately switches on because we all like to be flattered.

So out of the performance meeting what did the employee hear?  Something good that they were doing, something in the middle that they can't remember much about, and something good that they are doing.  In their mind the staff member believes that they are doing an OK job because you told them so!

When holding performance improvement meetings, get to the point.  What are they doing, what is the impact of what they are doing, and how can they improve it.  Negative messages can be delivered in a positive way with a little thought.