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Risk Management – Attitude of modern man

In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing. – Theodore Roosevelt


he goal of this article is to create in the reader some sort of analogy between two spheres that are on different levels, the professional sphere in managing projects and associated risks and the personal sphere, seen in its broader concept of managing the real life of each individual.
The ultimate goal is to demonstrate that the basic elements used in both contexts are exactly the same and their ways of use depend on variables both subjective and objective.
To do this, we have to try generalizing the definitions of the elements at the base of the methodologies used in project management.
Now I ask you a question.
Do you think your life can be compared to a highly complex project, consisting of several sub-projects lower in magnitude than its parent? I think so.
Mind Map of a Project

Mind Map of a Project

A project is by definition a temporary endeavor, subject to uncertainty, with an established beginning and an end, undertaken with the aim of producing value through the creation of one or more “products” that generate measurable benefits.

If we compared all that to the daily, we could see that our life has been made up so far from projects, some closed positively, others interrupted without achieving the expected benefits. Yet others are in progress or maybe we are deciding to start them right now.
It’s not by chance that in the Italian language “making projects” is synonymous to “planning for our future”.
By taking that as a first premise, let’s now turn to the definition of risk: the risk is defined as an event or a series of events that, if they occur, may have some impact in achieving the goals originally set.
In case of positive impact we talk about “opportunities”, in case of negative impact the correct definition is “threat”.
Real Life Risks

Real Life Risks

Try to think of an Ishikawa diagram where the baseline is a specific period of your life and the various “bones” are the causes of the possible risks that may arise.
To define what is the purpose of Risk Management, I’d like to get as a source the first principle of ISO 31000: “Risk management creates and protects value.”
By generalizing, the principle is applicable to any reality – private or public – or even to our personal life; the key thing is to define, for each context in which you want to apply it, what is meant by the term “value”.
At this point, having understood on what basis we are moving, let’s try to move to a completely different source and analyze the theory of evolution by Charles Darwin, well-known naturalist of 1800, to remind us on what elements is founded.

Darwin claims that the natural purpose of every living being is the preservation of itself (survival instinct) and the species to which it belongs (breeding / self-preservation).
The concepts of “Selection” and “Adaptation” explain by what strategies the nature allows the continuity of more highly evolved species, through the identification of the specific value developed by each species and its ability to adapt to the context and to the environment in continuous change.
So if we take for true that the tendency to the preservation of every individual and its survival are inborn in every living being, we can surely state that in the evolution of each species some well defined strategies have been outlined in order to address threats if necessary and continuing to change the living being from within.

Resistance to change

Resistance to change

In managing business we can find similarities with the evolutionary theory mentioned above. Indeed in the context in which today projects and programmes are developed, the concept of continuous innovation is required to react to change and counteract the evolution of the various cultures and markets under the social, economic and technological point of view.
All that happens in a continuous becoming, where only those realities that are able to preserve the value generated in the context in which they develop, manage to survive and justify their activities, whatever they are.
Those realities are rewarded because they succeed in adapting themselves by changing, constantly evolving.
The techniques we face Risk Management to, are conceptually the same both in the management of business and in personal life; they are based on behaviors capable of avoiding, reducing, transferring or accepting the threats and exploiting opportunities that arise while we proceed.
This concept applies to a general and objective as well as at a personal and subjective level.
In fact, different response strategies – based on the specific conformation of the individual personality or on the anthropological context in which it is located – are alternated to common features typical of the species.
So each person will react to a possible risk with different actions and behaviors, belonging to or very close to one of the four broad categories listed above, at all levels, from the specific project work to the broader context of real life.
That being said, you will agree with me on the fact that most of the individuals in their life are more or less on their guard against possible threats that may arise; consequently they implement plans and actions designed to predict and reduce the probability and the impact that may arise if they occurred.
The last concept that I’d like to express before closing this thinking is the absolute centrality in all aspects of our life of the concepts of prediction and probability.
To do this, I will quote Bruno de Finetti (1906 – 1985), Italian probabilist, statistician and actuary, who struck me while studying because it opened my eyes to the importance of the concept of probability in terms of all the possible perspectives, by the broader to the more specific.

“Oggi l’apparire della meccanica statistica, della teoria dei quanti, della meccanica ondulatoria, ha messo in discussione la causalità e il determinismo, rompendo il magnifico isolamento della previsione scientifica per ravvicinarla attraverso graduali concessioni alle comuni previsioni o congetture della vita pratica. Non vi è più nella previsione scientifica, una certezza assoluta; v’è soltanto una certa probabilità che può al massimo divenire tanto grande da meritare il nome di certezza pratica.”

“Tutto ciò che non si riduca ad una semplice constatazione, a una verità storica isolata, tutto ciò che ci guida verso il futuro, persino la credenza che nell’uscire da questa stanza vedremo come sempre le stesse strade e le stesse case allo stesso posto, tutto ciò costituisce un giudizio di probabilità che è basato, forse inconsciamente e indistintamente, sui principi del calcolo della probabilità. Questo calcolo costituisce perciò il fondamento della maggior parte del nostro pensiero..”

It is clear at this point how much in every day we live, consciously or unconsciously, we use the thought and its ability to predict, calculate and control the degree of probability of events which have occurred or may occur in the future in every sphere that form our lives.
So it is necessary, to address in the best way what lies ahead, to keep on questioning ourselves, never take anything absolutely for granted but try to control every possible event trying to predict and remaining ready to react to any unexpected changes.
I feel like saying, finally, that this general ability to forecast, combined with the calculation of probability, is one of our biological weapons, in Darwinian terms, that we have developed over time and that we have to use against uncertainty; a necessary tool to guide us in any future activity.


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