Thinking about Risk: No Clip On Bow Tie
August 15, 2020
I read “Risk Bow Tie Method.” I worked through the write up, which reminded me of a reading in one of those professor-assembled Kinko’s books students HAD to purchase. The focus is a management procedure for thinking about risk. Today, there are some interesting topics which MBA study groups can consider on a thrilling Zoom call. As I examined the increasingly detailed diagrams, the procedure seemed familiar. I ratted through my files and, yes, I had a paper (maybe I snagged it at a non-Zoom conference in England in the 1990s) called “Lessons Learned from Real World Application of Bow Tie Method.” There’s version of this document available at this link.
The idea is that something happens like Covid, serial financial crashes, social unrest, private enterprise controlling information flows, etc. None of these is too serious. The idea is to make a diagram that looks like this one from the 1990s Risktec person’s write up:
If you want to be a consultant, you need a diagram without explanations. The idea is to bring discipline to a group of people who would rather check out TikTok videos, browse Facebook, or fiddle with their Robinhood account. But a job is a job, whether in person or on a Zoom call.
The advisor systematically works through the “logic” of figuring out the issues related to the minor risk an organization faces; for example, an enterprise search vendor failing to meet its financial goal for the quarter as cash burns and employees “work” from home. Yep, fill in that logical diagram.
Exercises like this are a gold mine to a consulting firm. Blue chip outfits focus on these “big picture” methods. Mid tier consulting firms and sol practitioners with a Wix Web site and Instaprint plastic stick on sign for their automobile may have trouble landing enough work to pay for working through the Bow Tie Method.
So blue chip consulting firms embrace these types of fill-in-the-blank exercises. The consultant gets to “know” the participants and can set the stage for recruiting an insider to function as a cheerleader absent pom poms. The “report” allows the consulting team to identify which options are better for the company with the data presented created by the … wait for it … the employees who participated in the Bow Tie Method process. To be fair, the consulting team has to create a PowerPoint or similar presentation. Some consulting firms just write an “Executive Memo” and move to selling follow on work.
I must admit I thought of the popular song by Stevie Wonder with these lyrics. Note: I modified the last line to match my reaction to the attempted rejuvenation of the Bow Tie Method:
His father works some days for fourteen hours
And you can bet he barely makes a dollar
His mother goes to scrub the floor for many
And you’d best believe she hardly gets a penny
Living just enough, just enough for the consulting.
Several observations:
- Is the Bow Tie Method the correct one for our interesting times? Plug in Covid, fill in the boxes, discuss options, and what do you end up with?
- Is the Bow Tie Method and other thought frameworks matched to today’s management climate? Twitter, Facebook Google, Amazon, and other FAANG outfits create risks, and I am not convinced that objective consideration of the risks to these organizations are top of mind for the top managers at this time. It seems as if the consulting frameworks have to be designed for thumbtypers and consumers of Instagram and Snap apps, not old-school frameworks from who knows where.
- The time and cost to work through a full Bow Tie Methods may increase risk for the company. Here’s how that works. The leadership of a company or country changes direction. Mixer from Microsoft. Hey, kill that dog. A Google API? No reason to provide that any more. A tweet from the White House changes the social media influencer landscape. As these here-and-now events blaze on digital devices, the time for the Bow Tie and the time for dealing with here-and-now is out of joint.
Net net: Traditional consulting methods, regardless of the fancy graphics and with-it explanations seem to be like exhibits in the British Museum. Who knew the Elgin marbles were sitting in a dark room?
Stephen E Arnold, August 15, 2020
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