Category Archives: Adeptness

Seven ARM Components

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This is an overview my thoughts on Risk Management.  Part I, “Guns, Telephone Books and Risk” discussed Risk Management as long lists of things that will never happen. Part II, “Anti-Fragile Risk Management” considered the concept of Anti-fragility in a risk management concept (ARM).  This included an overview of ISO 31000 – Risk Management.  The second blog also introduced the Seven ARMed Organization.  That is an organization that has mastered these risk mitigation components:

  1. Purpose: Why Does the Organization Exist, what are its objectives?
  2. People: Does the Organization have adeptness to achieve its objectives?
  3. Process & Plant: Do the People have the right Operational knowledge to operate the systems they are responsible for?
  4. Product: Does the organization have a product or service that the market/society wants?
  5. Planning: Does the organization know how to do Operational and Tactical Planning to sustain or enhance the above?
  6. Power: Does the organization have the material resources as well as the strategic and leadership capacity to Change the Above?
  7. Risk Tested: What identified risks can be used to test the above to ensure they are functioning?

No Ordinary Ordinality

The Seven Components of ARM can be managed and worked on in parallel but there is a method in the selection of the order they are presented.  If an organization does not have number 1 (objectives) at least started or well in hand component 2 (people) and onward becomes much more difficult.

Number 6 (governance) may surprise some people with its placement.  From a Risk Management perspective, Governance has little impact on day to day risks.  This is not to dismiss or discount it – but to put it into context that it has longer term or enduring impact as opposed to being a short term influence on risk management.  This concept is demonstrated in the following diagram.

Anti-Fragile Risk Management

No Business Gurus Were Harmed in the Making of this Blog

The first six components have been fodder for a whole flotsam of business books.  My focus will be to provide a high level explanation of why I included the component and answer the question why this component is important from a Risk Management perspective.

A Dive into the Pits of the Seven ARMs

The next series of blogs will consider each of the Seven ARMs in a bit more detail.  At a minimum I would like to consider:

  • The definition of each of the ARMs.
  • Its linkage (if at all) to ISO 31000.
  • Why is the ARM important?
  • Example of Risks and Mitigation particular to this ARM Component.

Islamophobia – Defined

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This may end up being a wrong turn at Albuquerque but I see that Mississauga-Erin Mills Liberal MP Iqra Khalid is proposing a private members bill M-103 to address ‘Islamophobia’.  I thought I would contribute to the democratic process by providing some definitions and examples of what Islamophobia should mean.

A Little Constitutional Reminder

The Canadian constitution reads as follows: 2. Everyone has the following fundamental freedoms:

  • (a) freedom of conscience and religion; 
  • (b) freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication;
  • (c) freedom of peaceful assembly; and
  • (d) freedom of association.

As a result, under the constitution, the following statements are equally protected:

  1. The Pope is God’s Vicar here on earth.
  2. Mohamed is God (Allah’s) last prophet.
  3. Joseph Smith received golden plates from God.
  4. Ones actions should be mindful of Karma.
  5. All the above is superstitious nonsense not worthy of a rational person.

Superstitious Nonsense & the Belief instinct

To number five above, the likes of Richard Dawkins would take this as their belief protected by the constitution.  Where atheists can fall down is not recognizing the enormous evolutionary advantage religion has given humanity in being a successful species, the importance of the ‘Belief Instinct‘.

Religion has allowed us to create larger organizational units by applying the mortar of group cohesion across individuals.  This has not been without its costs.  The Crusades, the oppression of women under Sharia Law or polygamy under early Mormonism are all examples where religion has gone wrong.  While it is easy to spin and wish to re-write the past, it is more important to recognize the following:

  1. Religion is a fundamental instinct of humanity and will manifest itself with or without a formal outlet.
  2. Religion, like other primal urges, needs to be directed to the betterment of society.
  3. Religion must evolve as societies do so, while there are some universal truths, such as though shall not kill, there is no universal or ‘right’ religion.
  4. Without religious evolution, humanity risks reaping the worst from the belief instinct while losing the benefits it can provide.
  5. Canada can be a guiding light of helping individuals, communities and religion evolve to accommodate new social and cultural norms.

A Suggested Addendum to the Private Member’s Bill

To help Ms. Khalid to navigate the tricky waters of religion, I would suggest the following revision to private member’s bill M-103 (written in non-legal speak):

Whereas the people of Canada:

  • hold core values, such as the freedom of religion, above all others,
  • recognize the role of faith and the belief instinct in personal matters and social cohesion,
  • recognize the value religion has conveyed and inflicted on humanity,
  • recognize the values of equality of all people and equality of all before a common law.

Whereas the people of Canada acknowledge the Arabic word Islam to mean ‘acceptance’ and therefore Islamophobia means an irrational fear of acceptance. We the people thus condemn Islamophobia which is defined as any religion or systematic or personal belief system that:

  1. Seeks to enrich individuals who hold position of religious-authority through corruption, personal gain of power or actions contrary to the law or Canadian norms;
  2. Has tenants and implicit/explicit actions that are contrary to the law and fabric of historical Canadian values including those of justice, freedom of religion, equality, personal responsibility and reasonable inclusion of people of all faiths and perspectives;
  3. Seeks to do harm to Canadian society through either direct or indirect action including encouraging actions contrary to the laws of good government;
  4. Seeks to forcibly convert or impose its views on individuals who chosen to have alternative views including a non (atheist) view of religion; and
  5. Fails to evolve with the changing nature of society, for example the changing role of personal beliefs in contrast with the original tenants of the religion.

To reduce Islamophobia, we ask all Canadians to not only look into their respective minds and souls but to also reach out to others who do not share their beliefs and state:

‘I don’t believe in your God or religious view-point, but first and foremost I will do everything in my power here on earth to protect your right to hold your beliefs as a Canadian‘.

Acceptance-philia

In a small way hopefully the above can lead to Islamophilia or a love of acceptance.  Acceptance that religion is a human instinct to be managed, that religion must evolve to meet cultural changes.  Ultimately our time here on earth is short – let’s all make the best of it before we meet our respective maker.

90 or 99 – That is the Strategic Question

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Nicolas Taleb would have us believe that strategic planning is ‘superstitious babble’ (see Anti-fragile strategic planning).  In contrast, Kaplan and Norton make strategic planning a cornerstone of the Balanced Scorecard.  The reality is probably in the middle.

This blog however considers the question, how much time should an organization spend on planning?  Successful or not, when do you cut your losses for a year or when do you think that you are not doing enough?

How Much Is Enough?

On the one hand, strategic planning can become its own self-sustaining cottage industry.  Endless meetings are held and navels are closely examined with little to show for it.  On the other hand, the organization is so tied up in operations and ‘crisis du jour‘ that they wake up and discover the world (and even their organization) has completely changed around them.

What rule of thumb or heuristic can be used to know that you are doing enough Strategic Planning without decorating cottages?  My proposed answer is somewhere between the 1.0% and 0.1%. Although a full order of magnitude separates these values, a range is important due to the volatility of an environment an organization finds itself in.  Governments are likely on the low-end (closer to 0.1%) and tech start-ups on the higher end (1.0%).

For more on the basis for these heuristics, take a read of ‘A Ruling on 80, 90 and 99‘ for my thoughts and a review of such things as Vilfredo Pareto’s legacy and internet lurkers. A recap from this blog is as follows:

  • Pareto: 20% of an organization’s actions account for 80% of its results.
  • 90 Rule: 1% of the operational decisions are enacted by 9% of the organization affecting the remaining 90%.
  • 99 Rule: 0.1% of the strategic decisions are enacted by 0.9% of the organization which impacts the remaining 99%.

Thus the 99 Rule provides a minimum amount of time for an organization to consider strategic questions while the 90 rule provides a maximum amount of time.

Who Does What and What to Do with Your Time?

Consider a fictional organization of 1,000 people.  This is a medium sized business, typical government Ministry or employees of a large town or a small city.  Assuming there is about 1,700 productive hours on average per year per employee (e.g. after vacation, training, sick time, etc. see below for my guesstimation on this) this means the organization in total has 1,700,000 hours to allocate.  How much of this precious resource should be spent doing strategic planning?

I am recommending no less than 1,700 hours and no more than 17,000 hours in total.  In total means involving all people in all aspects of the process.  Thus if there is a one hour planning meeting with 20 people in the room, that is 20 hours.  To prepare for this meeting, 3 people may have spent 2 full days each – another 3 x 2 x 8-hours or another 48 hours against the above budget.

Measuring what Matters

The point of completing these measurements is to answer four fundamental questions:

  1. Is the organization doing enough strategic planning relative to the environment?
  2. Is the organization doing too much planning?
  3. Are we getting value for the investment of resources?
  4. How do we get better at the activities to reduce this total?

Is the organization doing enough strategic planning relative to the environment?

What happens if you discover you are not doing enough?  For example your 1,000 person organization is only spending 100 hours per year doing planning.  You may be very good and efficient and if so bravo to you and your planning folks!  On the other hand, you may be missing opportunities, blind sided by challenges and mired in the current day’s crisis – in which case maybe a bit more effort is needed.

Is the organization doing too much planning?

The 1,000 person organization may also be in a Ground Hog Day’esque hell of constantly planning with not much to show for it.  Perhaps you have a full time planning unit of five people who host dozens of senior management sessions and the best they can is produce an anemic planning document that is quickly forgotten.  In this case, measuring the effort of consuming 10 to 20 thousand hours of efforts for nought can lead to better approaches to the effort.

Are we getting value for the investment of resources?

The above two examples demonstrate how a bit of measurement may help you decide that 100 hours is more than sufficient or 20,000 hours was money well spent.  The output of the planning process is… well a plan.  More importantly it is a culture of monitoring, planning and adapting to changing organizational and environmental circumstances.  Thus setting an input target of planning to measure the quality of the output and the impact of the outcomes can answer the question if the planning effort were resources well spent.

How do we get better at the activities to reduce this total?

The advantage of measuring, evaluating and reflecting on the planning efforts is to get better at.  Setting a target (be 1.0% or 0.1%) is the first step of this activity and measuring against this target is the next.

Good luck with your planning efforts and let me know how much time your organization spends on its planning initiatives.

* How much Time Do You Have?

How much time does an organization have per annum to do things?  The answer is … it depends.  Here are two typical organizations.  The first is a medium size enterprise that works an 8-hour day, offers 3-weeks vacation per year, in addition to sick days and training (e.g. for safety, regulatory compliance, etc.).  On the other hand is a Ministry that offers a 7.25-hour day, 5-weeks of vacation plus sick and training days.

Organization Medium Size Company Government Ministry
Hours/day (1) 8 hours 7.25 hours
Work days per year (2) 254  250
Work Hours per year 2,032 1,812.5
Avg Vacation days x work hours (3) 120
(3 weeks)		 181.25
(5 weeks)
Avg Sick Days/year x work hours (4) 60
(7.5 days)		 54
(7.5 days)
Avg Hours of Learning/year (5) 42 29
Total productive hours/employee 1,810 1,548.25
  1. Few professionals work an 8-hour day let alone a 7.25-hour one.  Nevertheless, everyone has non-productive time such as bathroom breaks, filling up on coffee, walking between buildings.  So I am leaving the actual average productive hours at 8 and 7.25 respectively.
  2. For a cool site in adding this calculation, see: www.workingdays.ca.  Note this includes 3 days of Christmas Closure.
  3. 10 days is the minimum number of vacation days required to be given to an employee.  The average is a surprisingly difficult number to find (at least to a casual searcher).  15 days is based on an Expedia 2015 survey.
  4. Reference Statistics Canada: Days lost per worker by reason, by provinces.
  5. Sources vary.  I have chosen the high value for the for-profit organization as they often have stringent regulatory requirements for health and safety training.  For government I have chosen a medium value.  Sources:

Other Thoughts on Strategic Planning