Deconstructing Risk Aversion

by Kent Aitken

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A year ago a friend joined a new government organization, and one of the things she was struck by was how frank, honest, and transparent the external communications were.

Since then, my friend started writing a lot of the deputy head’s speeches. Not as a part of a communications branch, but as a strategic planner. At which point one of the explanations for the frank communications became clear: after a first draft, she sits in the deputy head’s office and talks it out with them to make edits. Just the two of them, while the four layers of management in between do their jobs elsewhere. 

The public service is risk-averse, they say. And when these people - whomever they are - say it, they usually mean it in a bad way: as a barrier to innovation, as a bottleneck to information-sharing or stakeholder engagement, or as a tendency to opt for safe and uncontroversial policy options when a much better policy option carries some chance of embarrassment.

I’d like to add a boring and functional possible explanation for that, alongside the usual slate of media, watchdogs, auditors, and career protection. I’d suggest that risk-aversion is a borderline inevitable function of how we approve things.

Here’s the long story short:

• The time demands on senior executives allow little flexibility
• Everyone in an approval chain approves everything about a proposal: not just the content, options, and recommendations, but the grammar, font, and format, and who else approved it
• It’s worse than just approval; layers of management have to both personally approve of a proposal, but also A) believe that the people above them will approve it, and B) believe that those people will believe that the people above them will approve it (see: Where Good Ideas Go to Die)
• There is rarely if ever direct communication between layers of the approval chain more than two steps apart
• The goal when sending recommendations and questions for approval is to have things go up the approval chain exactly once; there is no mechanism for exploring possibilities or asking clarifying questions (e.g., “If the parameters are X, I recommend action A; if the parameters are Y, I recommend action B.”)
• This is exacerbated because of the time demands on executives and how direction can shift - things tend to get approved at the last minute which completely rules out any two-way interaction with the final approver

All of which creates powerful incentives towards boring, safe, and precedented recommendations and external communications. There’s no time or mechanism to explore options and explain complex rationale.

Getting back to my speechwriter friend, to draft a frank and honest speech in an approval-chain/game-of-telephone system, she’d either need to send recommendations up long before drafting the speech and get clear parameters that all approvers would abide by, or she’d have to send two versions of the speech: one safe and “approvable,” and one frank and honest. And no one has time for either approach.

Her example provides one of the possible solutions: connecting the subject matter experts and the decision-makers (in many places around government, this already happens). Which has its downsides, sure. Analysts would have to learn an entirely new bedside manner, and some would be better at it than others. But that’s just a learning curve. And there’d be a lot more subject matter expertise in the room when decisions are made - which I think is a better deal for both sides of the table.

What Innovation Feels Like (Part 1: Fear)

by Melissa Tullio

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There was a comment on my last post by Martin (See: A Government that Learns By Design), and while I was nodding my head at the whole thing, these two bits rang very true:

We need to move away from a culture of CYA and learn to speak frankly of the barriers and risks associated with change.

and

Let's all start speaking real-talk.

So here’s my real-talk. I'd like to explore a series of barriers I’ve encountered being a public servant for more than seven years, and suggest some ways to overcome them.

A primary barrier to innovation is fear

I recently read something by Seth Godin, and the opening sentence is probably what permeated my subconscious and has driven me to write this blog post:

The opposite of creativity is fear.

Inside the public service, fear takes the shape of deeply entrenched risk aversion, and defaulting to a (very broken) status quo. Fear leads to bad decision making, ignoring opportunities for growth/change, and oppressing diverse talent and voices in the organization.

I’ve seen fear in action. I’ve seen leaders being chosen based on a system that favours the familiar – “safe¹” choices who think and act the exact same way as the hiring managers. I’ve seen managers “check in” with staff 50 times a day, to prevent any straying from the official plan or processes (effectively removing any possibility for creative – or even critical – thinking). I’ve seen peers mindlessly do work they’re asked to do and complain in the staff room how little sense it makes, without speaking up about it.

Each of us, at every level, is responsible for the culture of fear we’ve created (and we’re all responsible for fixing it, collectively).

What innovation feels like: a principled, shared fight

My solution to remedy the culture of fear has always been to challenge the system, to be hyper aware of illogical requests and/or politics-driven (big “P” or little) decisions, and to push back against them whenever and wherever I have the energy to put up a fight.

A seemingly benign (but, really, insidious) way to do this is to simply speak up and ask "why." I find that this simple habit seems to disarm people, and challenge them to think critically. It also creates space for others to speak up – if one person speaks up, it gives permission for others to do it, too.

More actions to fight fear

Here are pro tips that have worked for me when starting a principled fight against things in the system that make no sense.

• Pick your battles wisely. Choose to challenge nonsensical things that will have the most meaningful impact, for the most amount of people (called leverage points in systems thinking).
• Partner with at least one ally. Walk away if you’re alone in the battle. If you’re the only one who sees a problem, either there isn’t a problem; the amount of effort outweighs the potential impact (i.e., the leverage point is weak); or you’re surrounded by people who are willfully or unwillfully blind, and/or unwilling to be the change we need to be to fix this culture of fear².
• Try infiltrating official networks/communities. There are usually some safe spaces to experiment and learn from others. If there aren’t any, grab your ally and start one yourselves. (All it takes is two people).

I recognize that all these suggestions take energy and some dedication (and maybe a little bit of nerve), and an ability to look at the long game. I think I've resolved that I'm a lifer, and if I don't try to live the kinds of values I want to see our organization demonstrate (at least, some day), I should pack up and move to Hawaii and spend my energy saving whales instead (hold on... why am I not doing this instead?)

Is there a culture of fear where you work? What shape does it take? If you could imagine how the culture should be instead, what might that look like?

Next barrier to attack: lack of trust.

<sup>1. Not safe at all. The status quo, and hiring people who are doing things the way they have always been done, is a major part of what is keeping everything (including the workplace culture) in an unsurprisingly bad state.
2. In which case, I’d say don’t just walk but run away from your job entirely, if you’re able to.</sup>

Risk Aversion in Hierarchies

by Kent Aitken

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This is essentially a two-year delayed corollary to Where Good Ideas Go to Die, about the nature of hierarchies and how they influence decision making. I'm not suggesting that either model is an ironclad rule - they're simplifications with much room for exceptions, but hopefully worth considering as food for thought.

A central feature of large organizations is delegated authority: establishing a mandate and structure within which officers can exercise authority on behalf of the organization. For instance, one might have authority to spend money on certain things, up to a limit, without additional approvals.

That said, not much "big" stuff is left to delegated authority. It may be for reasons of accountability or importance, or because "big" stuff either impacts different parts of the organization or requires cooperation for implementation. So many proposals get approved at each level, then continue up the chain of command.

However, refusals are almost always left to delegated authority. That is, if a level of management decides that a proposal should go no further, it stops. The level above does not necessarily hear about it. So a given level of management makes very few final "go" decisions on behalf of the organization compared to the number of "stop" decisions. For instance, an executive will know every employee's proposed training plan, but not what was struck off the plan by the level of management below.

False positives (poor ideas that get recommended) get caught by the system, by a higher layer of management. False negatives (good ideas that get stopped) don't.

Accordingly, false positives result in feedback for the person who recommended approval. That is, proposing an idea up the chain of command and getting a “no” provides information on which to base future proposals. Those who are too risk-tolerant will get reined in. However, false negatives get no such feedback. Managers who are too risk-adverse, wrongly making “stop” decisions on behalf of their organizations, will remain so. This also means that senior executives will systemically underestimate the level of risk aversion in their organizations.

Alternatively, instead of it being different managers' styles, it could be individual managers who propose too much in some areas and too little in others. A manager could be risk-adverse on communications but overly ambitious on staffing requests. The latter would get corrected, the former would go unchecked.

I'm sure that when a decision-maker is uncertain, they'll often check in with their management. But given the scale of organizations, the desire to minimize demands on senior executives' time, and the sheer volume of proposals moving on a given day, there's room for error. In a large enough organization, over enough time, tiny breakdown rates still mean a lot of breakdowns. Small asymmetries in the forces influencing decisions add up.