Stretch Your Goals

Risk management ought to be a strategic exercise rather than a reactive measure.

- Suresh Lulla

The early Greeks, Romans, and Indians did not worry about uncertainty—the very idea would have been foreign. They believed that everything was predestined. In India, we called it, and still do, karma. Since then, the pendulum has swung so far that we now believe that every system, process, and product/service should be micro analysed in terms of probability with respect to uncontrollable variables—political, social,economic, and environmental [developments], as well as the market, technology, war, terror, and so on; more specifically, in terms of probability of failure in multiple alternative scenarios.

As a result, we have started worrying about uncertainty and begun applying our skills to estimate the odds. We call it risk management. Risk management is an integral part of quality management.

No surprises for customers

According to Dr J M Juran, the quality guru, to manage finance, we use three managerial processes—financial planning, financial control, and financial improvement. The focus is on the shareholder.

Similarly, he articulated, to manage quality, we use three managerial processes—quality planning, quality control, and quality improvement. The focus is on the ultimate user of the product/service. In quality planning, we set the standard; in quality control, we maintain the standard; and in quality improvement, we challenge the standard.

Of the three quality management processes, risk management plays a critical role in quality planning. It is here that we build reliability into our products/services as well as processes. The mantra is ‘zero surprises for the operators, customers, and users.’

Holistic view of risks