Risk-Based Risk Management with FMEA
Failure mode and effects analysis (FMEA) examines how a process could fail and which failures deserve attention. Detailed risks, useful indicators, early milestones, and candid reporting help turn that analysis into action.
THE IDEA
Practical Suggestions
- The FMEA framework is an excellent tool to help ‘push’ thinking around critical risks. A helpful mindset to adopt is ‘risk‐based risk management’, with a ‘belt and braces’ approach to understanding mission‐critical goals and risks and analysing these in more detail than routine risks.
- Be mindful of ‘motherhood and apple pie’ risks that are generic (e.g. ‘cyber security risk’ and ‘staff retention’); a good risk management process should be capable of revealing detailed data on critical sub‐risks relevant for a specific organisation.
- Ensure you are clear what measures of progress are leading and lagging and don't let perfect data be an enemy of ‘good enough’ data, especially concerning things that matter, such as customer relationship management data (waiting times, turnaround times and understanding the causes of negative feedback).
- When a goal has been set, pay close attention to the phasing of how it will be achieved. The more that milestones and metrics are ‘back‐end loaded,’ the greater the chance of a surprise with little time to put things right.
- Be very clear about how the organisation measures whether milestones have or have not been met; there are often many incentives for managers to give themselves the ‘benefit of the doubt’.
- Appreciate that ‘silence’ can often be dangerous. Ideally you are looking for a culture where sharing and transparency of ‘inconvenient truths’ is encouraged.
- When you get survey results in support of a key point, clarify how many people did not respond. Likewise, try to unpick the extremes from the average and ask whether ‘free text’ responses were asked in any surveys and, if so, what they said.
When to use it
When launching a new product, use FMEA to anticipate potential failures and implement preventive measures.
When setting quarterly goals, include early milestones that leave time to investigate problems and take corrective action.
When analyzing customer feedback, dig into free-text responses and non-responses to uncover hidden issues.
When reviewing project progress, clarify how milestones are measured to avoid incentive-driven optimism.
FROM THEORY TO EVERYDAY LIFE
In practice
Manufacturing Production Line FMEA
A manufacturing company uses the FMEA framework to identify potential failure modes in a new production line, such as equipment malfunction or supply delays. They prioritize risks based on severity, occurrence, and detection, and implement preventive measures for high-priority items.
Project Milestone Phasing
A project manager sets quarterly milestones for a software development project, ensuring that key deliverables are front-loaded to allow time for testing and corrective actions. She monitors leading indicators like code review completion rates rather than just final delivery dates.
A MOMENT TO REFLECT
Put it to work.
How can you apply FMEA to identify the most critical risks in your current project or organization?
What 'motherhood and apple pie' risks might be masking specific vulnerabilities that require detailed analysis?
Are your milestone metrics leading or lagging? How can you shift to more predictive measures to avoid last-minute surprises?
CONTINUE THE CONVERSATION
Source texts
- Beyond the Five Whys Root Cause Analysis and Systems Thinking (James C. Paterson)