Risk: From the Battlefield to the Boardroom

Risk: From the Battlefield to the Boardroom


At GQ’s September seminar the guest presenter was Major Tommy Aitken MBE, who retired from the army in 2007 after serving as a member of the UK special forces since 1978. He gave some fascinating insights into the military approach to managing risk, while Jon Gilligan from GQ followed this up with some observations on how risk management translates into the corporate world of HR issues.

Tommy began by joking about how ‘HR’ in military circles stands for ‘hostage rescue’, but made the point that conflict and friction are common to both the military and corporate worlds, saying “Conflict represents a constant struggle to achieve understanding, opportunity and control… whose underlying nature is human and volatile”. While conceding that physical violence is not usually a feature of HR conflict, he made the point that the same human and volatile factors come into play when individuals and companies come into conflict; when livelihoods are at risk, or redundancy looms or companies have to make tough decisions that impact employees.

Looking at the commonalities of military conflict, Tommy highlighted four key issues:

  • Friction. Friction is the force that frustrates action, makes the simple difficult, and the difficult seemingly impossible. Friction may be mental, perhaps caused by indecision, or physical. It may be externally imposed, by an adversary or the environment, or be self-induced, for example by a poor plan, or poor HR policies, and/or bad implementation and execution.
  • Uncertainty and Chaos. In all conflicts a ‘fog of war’ will descend that can lead to uncertainty and chaos. Chaos amounts to disorder and confusion that is so unpredictable as to appear random. Conflict is a human activity - an ‘option of difficulties’ - that is uncertain and subject to inaccurate or contradictory information. Chaos might be deliberately exacerbated by adversaries, and presents opportunities for the bold to seize. It is something to be exploited rather than endured.
  • Violence and Danger. The threat or use of violence is the means by which one side in conflict ultimately seeks to succeed over another, by using force. It brings surprise, shock, danger and fear.
  • Human Stress. Although technology impacts on the human reactions to the character of conflict, in its nature human stress will always feature. Combat or fighting can be horrific, and the prospects of violence, danger, fear, exhaustion, loneliness and privation adversely affect the will of all those involved. Success in battle is as often decided by the psychological ability of each side to withstand these stresses in order to protect its own cohesion and will, as it is by physical results.

There are elements of all of these in difficult HR situations. Although physical danger is thankfully rarely a feature of HR disputes, the simple becoming complex, emotionally threatening behaviour and a ‘fog of war’ are all fairly common. Human stress is always a feature of disputes, which have the potential to be very stressful on both company and individual.

Mitigating risk the military way

Tommy then went on to look at how we can mitigate against friction, uncertainty and chaos, and human stress.

In terms of Mission Analysis (the process of evaluating missions and the potential risks attached to them) Tommy made the following points:

  • One of the keys to British (and NATO) military success is to have a centralised intent with decentralised execution which promotes freedom of action and initiative.
  • Subordinates need to understand intentions, what effect is to be achieved and why; they need to understand commanders’ intent in order to best achieve the mission.
  • As this principle is applied throughout the chain of command it enables and empowers people at all levels.
  • Special Forces Operations are high value and high risk and usually have a national imperative so the reputational risk of the nation is often at stake, for example a hostage crisis.
  • Centralised intent and decentralised execution enables consistent decision making thereby reducing risk.

Another key means of reducing risk, he said, is the process of soldiers asking “what am I being asked to achieve and with what constraints?”, while recognising that no two missions are the same. The military approach is to

  • Understand the situation (Identifying the Risk)
  • Understand the problem (Understanding the Risk)
  • Formulate and consider Courses of Action (COA) (Mitigating Risk)
  • Develop and Validate COAs, by asking “what if?” and recognising “what can go wrong, will go wrong” so you need to plan for it (Mitigating Risk)
  • COA Evaluation (Mitigating Risk)
  • Commander’s decision made and communicated

The Seven Questions that each individual involved (in a military or corporate conflict) must ask himself are:

  • What is the situation and how does it affect me?
  • What have I been told to do and why?
  • What effects do I need to achieve and what direction must I give to develop a plan?
  • Where can I best accomplish each action/effort?
  • What resources do I need to accomplish each action/effort?
  • Where and when do the actions take place in relation to each other?
  • What control measures do I need to impose?

By asking these “what if” questions and planning for all eventualities, the commander or manager can avert risk blindness by early identification and planned mitigation of risks.

Tommy identified some further principles that could also be translated into the corporate world

  • Understand your higher commander’s intent (think two levels up) to fully understand the strategy and shorten the chain of command
  • Apply one third, two thirds rule: when time is limited for developing a plan the commander should spend one third of the time developing his strategy and allow two-thirds of the time for the subordinates to understand it and develop an implementation plan
  • No plan survives first contact with the enemy, which means soldiers must be resourceful and flexible.

Managing risk in employment law

Jon Gilligan then went on to talk briefly about how very similar principles of risk management can be applied to corporate employment issues. He said “The fog of war definitely resonates in these situations, even if it’s not generally a matter of life or death.”

Commenting that “the ‘what if’ questions are not used enough to plan ahead and mitigate risk”, Jon Gilligan explained that this was why GQ had developed its HR Risk Indicator to help organisations understand their collective approach to risk in four key areas

  • Legal/financial
  • Reputation
  • Regulatory
  • Cultural

Reiterating the value of planning ahead, and considering all eventualities, he cited two examples of a very senior level termination. In one instance GQ and the internal HR team planned the dismissal over two months, and all the possible scenarios were considered. As a result, the team were able to minimise the ‘conflict’ and ‘friction’ with the individual: an agreement was finalised within 36 hours, communications were carried out swiftly to reassure external and internal audiences, the affected team remained positive, and the dismissed individual remains an ambassador for the organisation.

In the second scenario, GQ were consulted at 5pm on a Friday, half an hour before the individual was due to be dismissed. There was “no mission analysis or planning” and, as a result, “the individual’s team went nuts, the market was confused, and reaching a settlement incurred substantial legal fees, management time and stress, as well as a significant settlement package.”

Jon Gilligan stressed the point that organisations have to juggle risks and that these should be driven by the business strategy. “The point is,” he said, “that the organisation needs to be clear from the outset about what really matters to them, and that makes it much easier to make appropriate decisions.”