Every July, my family and I make the 6-hour trek to the Appalachian Mountains in North Georgia for some well-deserved rest and relaxation (and a slight reprieve from the Florida heat and humidity!). Being halfway through the year, it’s always a fitting time to disconnect from the daily grind and just have fun sleeping in and enjoying the variety of activities available in the surrounding area.
With family connections in North Georgia, I’ve been there many, many times throughout my life.
You would think we would run out of things to do, but that’s the thing – we always seem to find something new each time we go.
On this year’s trip, my husband took us to a mountain river one day to swim. Known as the Chattooga, it forms the border between Georgia and South Carolina in the very northeastern tip of Georgia, and while it may not be as well-known as other scenic rivers like the Colorado, it’s amazing to me that such a wild place exists within a 2-hour drive from the major urban center of Atlanta.
What does my family’s swimming trip have to do with risks and achieving goals?
You’re on vacation, Carol, what are you thinking about work?! Sorry, I can’t help it, especially after our experience at the river.
As we were getting our bearings in the water with the rocky bottom, I noticed a spot with a sizable sandy area and calmer waters on the opposite bank. We thought it would be nice to get over there and enjoy the water and explore more, especially as we would also be able to see more up and down river.
But to realize this opportunity, we needed to get to the other side (our goal).
However, it wasn’t as simple as just swimming across.
The current in the middle of the river was pretty swift, and there were large, moss-covered rocks underneath the water’s surface where we could twist an ankle or something worse. In addition to the environment, my family has varying degrees of swimming strength, especially with our son.
This was our risk identification…we didn’t want our vacation to end with an ER visit, or worse.
From here, we assessed the risks for different options for getting across, which we determined to be:
- Go slightly upstream and walk across shallower waters. The problem with this was we didn’t have any swim shoes, and the current was even swifter coming off the rapids. Although the water was not as deep, the risk of getting caught in rocks or swept off our feet was pretty significant.
- Swim at about a 45 degree angle from where we were standing. Although the current would push us downstream, it would allow us to get on the other side of the large boulders where the current went calm. From there, we would be able to walk or swim to the spot we were trying to reach.
- Go farther downstream and swim across where there current was a little slower. Once we reached the other side, we would then be able to walk/swim upriver to the spot we were trying to reach. This option seemed to make the most sense, except we had no idea what the rocks were like down there, plus we would have to double back against the current.
This is where it got a little more interesting because this situation also illustrated differing risk tolerances.
I was the most risk taking. Swimming since I was age 2 and becoming a certified advanced swimmer in middle school, I am confident in my abilities to cross the strong current and reach the goal. My husband was a little cautious, while our son (Jackson) was initially very nervous.
After evaluating these options for about 10-15 minutes, and the risks associated with each, we settled on option 2, but not without a little case of analysis paralysis. I explained the plan to Jackson, encouraged him, and also reassured him that I would be right there with him. This helped him know that he had a safety net, increasing his confidence that he would achieve the goal as well.
Despite their initial hesitation, we successfully achieved our goal!
Nathan, Jackson and I had a great time skipping rocks, watching the fish swim around our feet, and examining smaller rocks and fool’s gold, among other interesting things. We stayed over there for over an hour, after which we walked upstream and swam back to the other side with the same option – 45 degree angle – with no incident.
What does this mean for risks and achieving goals at your company?
In reflecting on what transpired, it became clear that companies face this sort of situation all the time when determining how to achieve a goal. It also provides a clear “traditional vs. ERM” example, or rather a risk management practice focused on risk avoidance and loss prevention vs. a practice focused on informed risk taking in pursuit of objectives.
A previous example, our illustration of risk management in action at Thanksgiving, focused mostly on avoiding or minimizing risks. Today’s story on the other hand focuses more on informed risk taking in pursuit of achieving a goal.
One course of action may have more risks but will help achieve the goal faster, like option #1 above. Conversely, another course of action may not be as risky, but will take longer to achieve the goal.
We often discuss the fact that ERM must be about MORE than creating a list of risks focused on avoiding failure. In our turbulent world, that is a recipe for mediocrity at best.
If your company’s ERM program fits this description but you want to change it, the best thing to do is to start small. Choose one goal and use tools like scenario analysis to understand what might happen and whether that’s acceptable, or use more quantitative tools like Monte Carlo simulation to determine the odds a particular course of action will achieve the goal.
While we were using our personal risk tolerance to determine how to best cross the river, it’s important to remember that you need to set any personal biases or preferences aside when helping the company identify and assess risks to achieving goals.
What analogies would you use to help your company understand the intersection between risks and achieving goals?
To share your thoughts, please don’t hesitate to leave a comment below or join the conversation on LinkedIn.
And if your company is trying to shift its thinking in regards to risk from a strict mitigation or avoidance perspective to one focused on achieving goals, reach out to me to discuss your current status and different options to consider for “crossing that river.”
Are you interested in learning how this analogy can be applied in your company?
Join us this Thursday, July 25th between 11:00 and 12:00 Pacific/2:00-3:00 Eastern for a brief intro into goals-based (a/k/a objective-centric) ERM followed by a lengthy live Q&A, where you can get insights on this or other risk and strategy topics from me personally.
It’s free to attend, but registration is required.
You can register here.
This event is being held in partnership with UCLA Extension.
