Are you sometimes disappointed at the results you get from Risk Management or indeed from any other management technique?

Do you seem to have followed all the right steps and not got the result you wanted?

There can be many reasons for this, but I want to look at one of the most important and easiest to overlook.   It concerns knowing the difference between your targets and your real objectives.  It is illustrated by the difference in thinking between some at the Admiralty and Admiral Lord Howe in 1794.  Such differences can be seen today all too often, and not just in the Navy.

In 1794 Britain was in the second year of the war against France following the French Revolution.  It was not going well.  There was great fear of invasion.  Admiral Lord Howe was in command of a division of the fleet sailing off the South West of England, aware that the French had assembled a fleet in the port of Brest in Brittany

Throughout the Eighteenth Century both navies had fought by keeping their ships in a “line-ahead” formation, resulting in very few decisive outcomes of sea battles.  Howe had seen that whenever there was a British Victory, something had happened to cause the lines to be broken and allow, or even force, captains to use their initiative, so he worked out a plan for defeating the French by breaking their line.

In May 1794 Howe was informed that a convoy of merchant ships was bringing grain to France from the Americas.  Both countries were trying to use attacks on merchant shipping to disrupt each other’s economies and especially to reduce food supplies.

He received orders:

  1. to keep the French Fleet blockaded in port
  2. to intercept the grain convoy.

In fact the French managed to slip out of port evading the British, partly due to the weather reducing visibility.  Howe attacked on the First of June, using his new tactics, resulting in one of our most decisive victories over the French at sea for a long time.  The grain convoy reached France, but most of the French Fleet was either captured or sunk, significantly reducing the risk of invasion for many years.

The news was welcomed by most British people as a great relief, a big uplift in morale, causing the battle to become known as “The Glorious First of June”.  However some criticised Howe severely for disobeying his orders and failing in his two objectives in that

  1.  the French Fleet got out of harbour
  2.  the grain convoy reached France.

Fortunately for Howe, his critics were silenced in the jubilation that we had won a battle for a change and were safe from invasion.  The people at the top saw that winning the War was our real aim.  Howe had placed that above his immediate objectives of blockading the French Fleet in port and intercepting the grain convoy.

What has this to do with your business? 

I have too often come across situations where people were so obsessed with their immediate objectives that they lost sight of their real aims.  Targets and Action Plans can make this mistake more likely if they are not always interpreted in the light of something bigger.  This can apply to all aspects of management, but you can certainly apply it to Risk Management.

Are you managing the real risks?  Or are you too focussed on your specific immediate ones?  Above all, think about this when carrying out a review of your Risk Management strategy.  Yes.  The one you were meaning to do sometime soon.