FreePint Newsletter 222 - Eye Tracking + Risk Management
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FreePint
"Helping 79,000 people find, use, manage
and share work-related information"
ISSN 1460-7239 18th January 2007 No.222
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ONLINE FORMATTED HTML VERSION
IN THIS ISSUE
-------------
EDITORIAL
By Monique Cuvelier, Editor, FreePint
MY FAVOURITE TIPPLES
By Joanna Ptolomey
FREEPINT BAR
In Association with Factiva, from Dow Jones
JINFO :: JOBS IN INFORMATION
Research Analyst
Information Specialist
Corporate Finance Researchers
Futuretrack Web Manager (3 Year Fixed Term Contract)
Business Analyst/Strategic Planner x 2
Knowledge Manager - Intranet Development (2)
TIPS ARTICLE
"Public Eye: Using Eye Tracking Software To Improve
the Usability of Your Website"
By Julie Howell, Laura Crofton-Atkins and Elinor Hardman
REVIEW
"Open Access: Key Strategic, Technical and Economic Aspects"
Edited by Neil Jacobs
Reviewed by Michael Gutierrez
FEATURE ARTICLE
"Risk Management Report: An Essential Toolkit for Businesses"
By Jela Webb
EVENTS, GOLD AND FORTHCOMING ARTICLES
CONTACT INFORMATION
ONLINE FORMATTED HTML VERSION
FULLY FORMATTED PDF VERSION
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*Searching, but not finding, costs your organisation time and money*
Download a copy of IDC's newest white paper, "The Hidden Costs of
Information Searching" and learn how Factiva can help you improve your
efficiency and make a real difference to the bottom line.
Download your copy at
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*** Don't sign your 2007 contract until you read this ***
VIP compares the 'Big Three'
See how they measure up - Factiva, LexisNexis and Thomson news
services compared in the latest issue of VIP. Additionally, find
out what virtual information professionals are getting up to
in Second Life.
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*** ABOUT FREEPINT ***
FreePint is a global network of people who find, use, manage and share
work-related information. Members receive this free twice-monthly
newsletter, which is packed with tips, features and resources.
Joining FreePint is free at and connects
information practitioners around the world with resources, events and
answers to their tricky research and information questions at the
FreePint Bar, our free online forum: .
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EDITORIAL
By Monique Cuvelier, Editor, FreePint
Just a few years ago, if you walked into an English pub, you'd walk
out smelling like an ashtray. The cigarette smoke was inescapable; it
was in your clothes, your hair, your nostrils -- not to mention
coating the inside of your lungs.
Admittedly, I'm a non-smoker and a snob about it, but not everyone is.
More importantly, I'm not a frequent pub-goer, and many of those who
are and keep these businesses afloat also favour cigarettes.
So when some pub owners decided voluntarily to ban smoking from their
establishments in 1999, they were taking on a terrible risk. What was
the use of decreasing the damage of second-hand smoke if no one would
set foot into their business?
Now legislation was passed in the summer of 2007 requiring a mandatory
ban on smoking in enclosed public places, including pubs, but those
owners who took that first chancy step were performing the delicate
dance of risk management. They were deciding how to mitigate the
danger of losing smoking patrons against the risk of losing those who
didn't smoke and might even threaten lawsuits.
Risk management is a topic every business owner, from a country
publican to the top brass at a multi-national corporation, needs to
understand and practice. Free Pint Limited is making this easier for our
readers by offering a report and tool kit on the topic, from expert
Jela Webb .
The Risk Management Report and Tool Kit is the first in FreePint's
newly redesigned report series, focusing on practical tools to help
information practitioners Find, Use, Manage and Share work-related
Information. These four practice areas -- captured in the acronym
FUMSI -- are increasingly important in our content development
efforts.
An excerpt from Webb's timely report appears in this issue, along with
a practical piece on conducting an eye tracking study and a review of
a book that examines the open-access publishing debate.
The articles in this issue of FreePint will help you find, use, manage
and share information, but tell us more about how you FUMSI. Check out
, and let us know what you think. Send
your feedback to .
Sincerely,
Monique Cuvelier
Editor, FreePint
e: monique.cuvelier@freepint.com
w:
FreePint is a Registered Trademark of Free Pint Limited (R) 1997-2007
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*** FreePint FUMSI Reports: Get the Know-How ***
If you Find, Use, Manage or Share Information, you'll want to know
about the FreePint FUMSI Reports: expert guidance and hands-on tools
to push your organisation forward.
Now available: Risk Management Report and Tool Kit
Have an idea for a report? Complete the proposal form at
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*** From Drab to Fab: CV Makeover in Jinfo Newsletter ***
Learn how recruiters and employers view CVs with the CV Makeover in
the Jinfo Newsletter. Includes 'Before' and 'After' versions, plus
commentary by our experts.
Subscribe to the *free* Update and Newsletter. Or search the online
database at any time for great jobs at all levels of experience:
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MY FAVOURITE TIPPLES
By Joanna Ptolomey
I have been lucky enough to be involved in projects assessing the
quality and availability of multilingual health resources over the
last few years. Here are a few of my favourite starting-off points.
* You can't go wrong starting at HARP (The Health for Asylum Seekers
and Refugees Portal) . It is one of the
best UK portals especially for mental health.
* I love the NSW Multicultural Health Communication Service
where you can search resources
by language or topic. The resources are of a high quality and are
updated regularly.
* Multikulti has a great selection of
resources that covers health inequalities issues such as housing,
education, debt, employment, immigration and racism.
* The voluntary and charity sector provides access to a plethora of
good-quality multilingual health resources. I use Patient UK
as a portal to identify organisations
for specific clinical conditions.
* The 24 Languages Project
is a good worldwide portal and has a great selection of links,
including access to more than 200 health-education brochures in 24
different languages.
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Joanna Ptolomey is a freelance information professional based in
Glasgow, Scotland, specialising in the health and inequalities sector.
She can contacted at .
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*** Researcha :: Immediate pay-as-you-go company data ***
Access hard-to-find data on UK company directors, original company
filing images and company data for Austria, Belgium, France, Germany,
Italy, Luxembourg, Netherlands, Portugal, Spain and Switzerland.
Researcha is free to search and view basic details, with convenient
report delivery .
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On the Ticker: Use DocuTicker for Full-Text Resources
There's a wealth of full-text reports put out by government
agencies, NGOs, charities and other public interest organisations.
DocuTicker's editors find and post them, putting them at your
fingertips. Recent additions:
* Approaches to Security Breach Notification: A White Paper
* How Good Is Canadian Health Care? 2006 Report
Subscribe to the weekly ResourceShelf Newsletter for highlights,
capture the DocuTicker RSS feed, or visit daily to learn about the
latest full-text resources .
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FREEPINT BAR
By Monique Cuvelier, Editor, FreePint
In Association with Factiva from Dow Jones
Researching a tricky topic may be difficult enough in your own
country, but finding information across borders is doubly complex.
FreePint can help, and here's a sampling of discussions at the Bar
from people looking for global data.
* The employment vetting process requires employers to dig deep --
potentially difficult when the candidate comes from Italy. But one
FreePinter found help looking up a credit search (at the Centrale
Rischi), an electoral roll (at the Ufficio Elettorale) and more.
Read more: .
* Thousands of Australian companies have a presence in the UK, but
just how many? Lend your ideas of how to come up with this number
.
* As one Bar member points out, 'Finding one Chinese governmental body
for company information is not easy'. But a few ideas for finding
Chinese government websites to search for registered companies or
basic details on companies in that country have cropped up, along
with some other helpful tips .
* The SAP and Oracle Implementation list in India may be vast, but
it's out there. At least one researcher is hoping so. Let him know
if you have ideas on where to find it
.
* Identity fraud knows no borders and is becoming more prevalent. One
such case is in the Bar, where someone was framed for stealing
another person's private information. If you know about some of the
trickery used to hijack account information, lend it here
.
Like what you see on the Bar? Tell your friends by forwarding this
newsletter.
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Monique Cuvelier is Editor of the FreePint Newsletter. She has served
as editor of several publications and her writing has appeared in
Publish, USA Today, Bankrate and many others. Learn more about her at
.
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The FreePint Bar is where you can get free help with your tricky
research and information questions .
Help with study for information-related courses is available at the
FreePint Student Bar .
Subscribe to the twice-weekly email digests at
.
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ResourceShelf Resource of the Week: Airline Industry Data
Check out our editors' collection of *free* online resources and
databases on almost every aspect of the airline industry. Then explore
the latest posts in mobile search, search engine news, podcasting and
more.
Visit to subscribe to the free weekly
newsletter, capture the RSS feeds and search the database.
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JINFO :: JOBS IN INFORMATION
The Jinfo service enables you to search and advertise information-
related job vacancies.
The newly redesigned Jinfo Newsletter now features a CV Makeover, in
which a job seeker's CV is critiqued and revised by specialists in the
field. Read the latest edition and learn how to submit your CV for
review.
Subscribe free at .
Here is a selection of the latest featured entries in the Jinfo
database:
Research Analyst
Researcher with Hotel industry experience needed.
Recruiter: Instant Library Recruitment (Tribal Group Plc)
Information Specialist
A global Business Consulting firm is looking for an Information
Specialist for their Brussels office for a short-term contract.
Recruiter: TFPL Ltd.
Country: Belgium
Corporate Finance Researchers
We have excellent career development moves for proficient Financial
Market researchers into leading top tier Investment Banks.
Recruiter: City Professionals
Country: United Kingdom
Futuretrack Web Manager (3 Year Fixed Term Contract)
Establish, maintain and manage the Futuretrack website.
Recruiter: Graduate Prospects
Country: United Kingdom
Business Analyst/Strategic Planner x 2
Contribute to our strategic planning/modelling by collecting,
analysing and presenting a range of management information.
Recruiter: University of the Arts London
Country: United Kingdom
Knowledge Manager - Intranet Development (2)
Intranet development professionals(2) with experience for top
Central London Consultancy.
Recruiter: Glen Recruitment
Country: United Kingdom
[The above jobs are paid listings]
NB: These are just a selection of information-related jobs in the
Jinfo database . Receive the latest job
listings weekly with the free Jinfo Update. Free to subscribe at
Jinfo -- the best place for information-related job vacancies.
* JOB SEARCHING? -- Free search and sign up to the Jinfo Newsletter
* RECRUITING? -- Complete the form and advertise a vacancy for
just GBP 195
-- 10% discount for agencies
-- 50% discount for registered charities.
Find out more today at
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TIPS ARTICLE
"Public Eye: Using Eye Tracking Software To Improve
the Usability of Your Website"
By Julie Howell, Laura Crofton-Atkins and Elinor Hardman
The web design industry is understandably excited about eye-tracking
technology. Finally, technology that knows what the people who use
your website are thinking!
Should you believe the hype? Eye-tracking software isn't cheap. If
your company decides to invest in eye tracking, are you confident you
will see a quick return on your investment? And does eye tracking
provide all the testing you need to build your website's information
architecture? Will eye tracking mean an end to other forms of user
testing?
These are the very questions that we at web design agency Fortune
Cookie asked ourselves during 2006. And of course, the questions
cannot be answered with a definitive yes or no. But if used in the
right way, eye tracking can definitely deliver results.
Here's the idea behind eye tracking: When we read a website -- or
anything else on screen -- our eyes dart about, skimming and scanning
in the hunt for killer content. We process information very quickly,
acting on impulse, ruthlessly sizing up and dismissing content
options.
Eye-tracking software records these eye movements, giving you
information about eye motions that can be impossible to otherwise
retrieve. Sometimes users don't remember where they look. And in
interviews, users may not always tell the whole truth about what they
looked at. Eye tracking provides a candid, unmediated account recorded
in real time.
But like any usability technique, an eye-tracking study is only as
good as the people who carry it out. It's only really useful if you
know what you want to use it for, such as improving the flow of
information on a webpage. And its findings are only as good as your
ability to interpret them.
We at Fortune Cookie are committed to execute and interpret eye
tracking research in the most effective way. Like everyone else in the
web design and usability industry, we had read about the benefits of
eye tracking on sites such as Jakob Nielsen's popular useit.com
. We knew that eye-tracking
technology would impress our clients. But would it also deliver ROI?
Is eye-tracking software anything more than an expensive gimmick? If
users tend to read websites in the 'F-shaped pattern' that Nielsen
describes in his articles, did we really need to purchase our own
equipment to prove the point to our clients?
We think so. When used intelligently, eye tracking is a powerful tool
to support usability testing and help maximise return-on-investment
(ROI).
But before deciding if an eye tracking study is for you, start by
finding out what eye tracking is and when it is likely to be most
effective.
Why use eye tracking?
---------------------
Eye tracking is not in itself a new methodology, and it can be
tempting to want to use it on everything and everyone at every stage
of the design-and-build process. But our experience shows that for eye
tracking to deliver optimal results, and have a positive impact on
ROI, it needs to be deployed wisely.
We use the Tobii Eye Tracker with ClearView
analysis software. Eye-tracking software is used to chart the progress
of a user's gaze across a computer screen. Prior to testing a website,
the eye-tracking software must calibrate each individual user's eyes
to ensure that the eye tracking works effectively. Although this may
sound complicated and intrusive it is in fact a very simple process
that takes a matter of seconds and is neither stressful nor difficult
for the user. Once the calibration process is complete, eye tracking
can be used to:
* Observe how the user's eyes wander across the design as he or she
attempts to find a piece of information, complete a task or navigate
through the site to a deeper level.
* Produce fascinating 'gaze plots' and 'hot spot maps'. These are
graphical representations of the user's sight behaviour that show
where the user looked on the screen, in what order they looked at
items on the screen or at parts of the design, and for how long they
'gazed' at something prior to moving on. Such charts are extremely
interesting as usually the user is completely unaware of how much
their eyes look around a webpage before they decide what to read or
which link to click. Web designers and site owners alike are usually
amazed by the results: .
* Provide documented evidence that can be used to inform changes in
the design. This is extremely important if it is necessary to
persuade whoever is paying for the site re-design to make additional
funds available for the work. Charts or indeed video that clearly
illustrate how much time a user spends trying frantically to find
the information they are looking for are incredibly compelling. Web
users are notoriously unwilling to spend more than a few seconds on
a webpage trying to find what they want before giving up and trying
a different site.
Time really is money on the web. Site owners, when confronted with
eye-tracking evidence, quickly realise the implications of failing to
make the user's progression through the website as swift and easy as
possible.
* Provide information about user behaviour that occurs on a
'subconscious level' (such as eye movements). Traditional user
testing -- that involves observing a person who expresses what they
are thinking as they navigate a site -- cannot provide subconscious-
level data.
At Fortune Cookie, we make a distinction between 'web designers', who
are concerned with coding websites and producing the graphical
content, and 'information architects', who work with clients and users
to arrive at the most effective structure for the website. This latter
group also look at the site as a whole as well as the 'webpage estate'
(that is the positioning of links, text and graphics; use of 'white
space'; the order in which content is displayed and how it is grouped,
etc.).
Eye tracking is of greatest benefit to information architects (IAs) at
several points in the design lifecycle, including:
* Evaluating the existing site
* Testing wireframes
* User testing new designs
Our IAs cite several advantages to using eye tracking over more
traditional user testing. These are:
* It makes it easier to track process flows. In traditional user
testing, mouse clicks can be observed and the user can be encouraged
to voice what they are thinking as they progress through the site.
Eye tracking, however, records user behaviour that neither user nor
observer may be aware of. Behaviour that adds precious seconds onto
the user's journey is behaviour that cannot easily be explained.
Analysis of eye-tracking gaze plots and heat spot maps quickly
reveal why the user has taken too long to find the information they
were seeking.
* It is easier to spot the weak points in the 'funnel'. A website's
information architecture should guide the user to the information
they are seeking with minimum effort. This is the 'funnel'. If users
are getting stuck or taking too long to progress through the site,
the funnel must be altered and improved. Eye tracking can inform
these improvements.
* It is a useful tool for comparative design. Particularly when
working with a new client, it is useful and enlightening to show the
client how their site performs when compared with a competitor.
Comparing eye-tracking data between two (or more) websites can
provide a strong indication of which sites are performing the best.
When wireframe designs are produced, eye tracking can also be a
useful way of choosing the design that is going to be the most
effective.
* It can be used to improve the performance of particular elements of
the site. One of Fortune Cookie's biggest clients is a financial
services provider that wanted to improve the performance of some
promotions on their website homepage. Fortune Cookie used eye
tracking to measure the amount of time users' eyes rested on each
promotion. We discovered that promotions that made use of
photographs had a big impact, and the position of the promotion also
affected the impact on the user. Traditional usability testing may
not have revealed this.
User profiles
-------------
It is vital to recruit an appropriate number of the 'right type' of
user for any kind of user testing. The agency supplying your users
should produce 'user profiles' to ensure they're providing the most
closely matched users to your client's needs (i.e. their target
audience). A profile may describe the gender, age and any disability
of the user. If an intranet is being tested then it is important to
test with users who have different 'job profiles'. There is a law of
diminishing returns when user testing, and as few as eight of the
right type of participants is usually adequate to solicit useful
feedback.
Structured questions
--------------------
Preparing structured questions in advance of testing makes it possible
to decide if eye tracking is the best way to solicit data or measure
behaviour. Gaze plots (which show the sequence of glances an eye
makes) are fascinating, but they are meaningless unless they reveal
user behaviour that can influence changes to the site design.
Therefore it is vital that IAs decide what it is they are hoping to
measure prior to commencing the tests.
The questions need not be complicated, although there should always be
a strong strategic focus to any eye-tracking programme. In the case of
the financial services provider our structured questions considered the order in
which users looked at items on the page and how long their gaze rested
on the priority items.
Have a clear sense of the question(s) you want to address. Which of
these designs works best? Does this promotion effectively attract
attention? Is the copy clear and intuitive?
It is extremely unlikely that an eye-tracking study will be the only
tool for testing the efficacy of a website. It should form part of a
usability-testing toolkit that includes a range of tests, such as
psychological questioning. Playing back a session and asking users why
they looked where they did -- and why they didn't look where they
didn't! -- can deliver invaluable insights. You may find an eye
tracking study isn't even appropriate for a group of users.
Eye tracking: the bottom line
-----------------------------
Correctly used, eye tracking can help deliver tangible ROI by helping
developers come up with new designs that accurately reflect user
expectations and behaviour. Your company will find that by keeping an
eye on where your users look, you can expect increased sales and
greater product awareness.
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Fortune Cookie is a web design agency that helps some of Britain's
biggest companies plan and build websites that deliver measurable
business results. Fortune Cookie's clients include a financial services provider,
FT Business and the London Borough of Lambeth. Fortune Cookie was
recently voted the number-one agency for online data collection,
provision and insight; third for use of new technology; fourth for
creativity; fifth for delivery of return on investment and one of the
top 15 UK digital agencies overall. Julie Howell is director of
public relations; Elinor Hardman and Laura Crofton-Atkins are project
manager information architects. Contact Julie Howell at
.
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Related FreePint links:
* "Working with a Usability Specialist" By John S. Rhodes
* "Books About Usability" By Dr. Jakob Nielsen
* "Analysing User Behaviour: A Case Study" By Chris Kutler and Ray
Devaney
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** Share the Wealth - Forward to a Colleague **
Who wouldn't welcome a free pint? Please *forward* this newsletter to
colleagues who find, use, manage and share work-related information.
Have a suggestion? We want to know about it. Send your comments to
, or submit via our Suggestion Box at
.
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REVIEW
"Open Access: Key Strategic, Technical and Economic Aspects"
Edited by Neil Jacobs
Reviewed by Michael Gutierrez
If you know nothing about the open access debate, then this book will
surely inform you and make you an advocate for the cause. "Open
Access: Key Strategic, Technical and Economic Aspects" is composed of
twenty thoughtfully researched and well written chapters that bring
the open access debate into the public sphere.
The open access dispute has been raging in the scholarly world for
more than a decade, tracing part of its origins to the 'serial crisis'
that began in academic libraries more than twenty years ago. Neil
Jacobs has gathered leaders in this debate to contribute their
thoughts, observations and research toward a book that can be equally
appreciated by scholars as well as the general public.
The initial chapters detail the history of the open space argument. In
addition, a succinct open access definition is developed by Charles W.
Bailey, Jr., which assists readers and scholars in understanding the
concepts and reasons behind the open access debate.
The second half of the book is devoted to the economic aspect of open
access and its effect in other countries. These chapters present a
major argument of the book, which contends that open access is more
economically effective for the publishing industry as well as academic
libraries. Other chapters look at open access around the world, but
focus mainly on the industrialised world, including the United States,
the Netherlands and the United Kingdom. India is given as the only
example of a newly industrialised country dealing with the open access
debate.
The final chapters of the book look at the future of open access and
take a speculative position with the ultimate conclusion being that a
'deep realignment', as Neil Jacobs states, needs to occur before the
open access debate is concluded.
While reading "Open Access", I found that there was not much attention
given to the legal aspects of the open access debate. In fact, only
Clifford Lynch, in his futuristic chapter on open access, spends some
time discussing the legal challenges of an open access reality. In
addition, the book has a distinct Eurocentric focus that detracts
slightly from the notion that open access is a worldwide concern.
In his chapter, Stevan Harnad openly asks, 'Is open access needed?' He
concludes that it is needed because the evidence suggests that access
has not been maximised. The chapters in this book do the same to
present the case for open access. Neil Jacobs has done a considerable
task of organising this book to build upon each authors' line of
reasoning to support the open access argument.
I would highly recommend this book for its excellent overview of the
open access debate as well as its ability to discuss a complex
argument so concisely. This book should be viewed as a cornerstone in
bringing the open access debate into the public forum -- a discussion
that will be benefits scholars, researchers and the public worldwide.
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Michael Gutierrez is a reference librarian at the University of
Delaware Library and is currently obtaining
his doctorate in Education Technology.
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Related FreePint links:
* Find out more about this book online at the FreePint Bookshelf
* "On the Verge of Revolution - Open-access Publishing" By Christine
Hamilton-Pennell
* Search for and purchase any book from Amazon via the FreePint
Bookshelf at
Related links:
* Read customer comments and buy this book at Amazon.co.uk
* or Amazon.com
* Introduction to Open Access
* Open Access: Key Strategic, Technical and Economic Aspects
EPrints.org
To propose an information-related book or resource for review, send
details to Monique Cuvelier, Editor of the FreePint.
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*** Use DigBig to shorten long Web addresses ***
DigBig is a fast and free way to shorten long URLs, so that
they're easy to include in newsletters and other communications.
"This makes communications with our members in the Federation of
Communication Services, and the industry at large so much easier -
Thank You isn't praise enough!" Marketing Manager, (January 2007)
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FEATURE ARTICLE
"Risk Management Report: An Essential Toolkit for Businesses"
By Jela Webb
[Editor's note: When Enron went bankrupt and destroyed shareholder
wealth by notoriously projecting income that was never earned and
manufacturing an energy crisis that triggered rolling blackouts in the
state of California -- an area roughly the size of Japan -- the term
'risk management' started showing up in boardrooms around the world.
Organisations now know they need an effective risk management strategy
so they can protect themselves from human-manufactured and accidental
losses. Free Pint Limted has commissioned a report that gives
companies the tools they need to craft their own strategies.
The following is an excerpt of that report, which is available for
purchase in its entirety at
.]
Across the global business environment we find a growing appreciation
of the benefits of risk management. Organisations of all kinds are
developing a much better understanding of what risk management
entails. In the past, risk management was perceived as a defensive
measure, tactics to deploy once disaster had struck; today, we can see
that effective risk management results in heightened and improved
business opportunity. For example, expanding into China involves
taking risks, not least where cultural issues need to be carefully
understood: the regulatory environment differs from 'home', but with
millions and millions of potential consumers: and where the risk of
doing business in a rapidly growing economy could be turned into a
huge opportunity to substantially increase sales (and profitability).
In the UK, pubs that banned smoking before the legislative deadline of
summer 2007 took a risk with potential loss of custom. However, many
are finding that business, particularly food sales, has actually
increased in these non-smoking pubs. They are attracting a broader
clientele with families more readily going to pubs for meals.
RM Processes
------------
Organisations that operate in the same industry sector face common
risks and may choose different strategies to manage those risks. These
differences are part of what gives each business its unique character.
But regardless of the strategies employed, one thing is consistent:
Proper continuous risk management processes are becoming an essential
feature of business. Whilst each organisation must decide for itself
what its strategy will be, good practice suggests that it will
involve:
* Identifying the risks: Undertaking an assessment exercise, involving
all employees as well as possibly externals, e.g. auditors, risk
management consultancies.
* Evaluating the risks. Risk mapping and determination of risk
appetite.
* Selecting the appropriate risk management treatments. The 'Four T's'
- Tolerate, Transfer, Treat or Terminate.
* Implementing strategies and business controls to manage the
remaining risks.
* Monitoring the effectiveness of the risk management strategies.
* Learning from experience and revising as appropriate.
From KM to RM
-------------
The relationship between risk management and knowledge management (KM)
is receiving greater attention. Forward-looking organisations
recognise the synergies between these two management disciplines, and
information practitioners who have served as KM champions are
positioned to help their organisations succeed in risk management as
well.
At the same time, the relationship between risk management and KM is
more complex than originally thought. Risk management tends to focus
on controls, while knowledge management focuses on innovation and
creativity. Still, we see a growing appreciation of how knowledge
management should be regarded as an enabler for risk management.
This table shows the many similarities between risk management and
knowledge management:
A knowledge-sharing culture is a key component of successful knowledge
management programmes. An effective knowledge-sharing culture calls
for open communication channels, employees being encouraged to share
knowledge, incentives to share knowledge and a 'no blame' environment.
Similarly, risk management should be everyone's job; each employee,
from shop floor to boardroom, has a role to play in mitigating risks
and making the organisation successful. However success is measured,
an open, knowledge-sharing culture where information and knowledge
about potential risks can be raised without fear of blame will help
the organisation achieve its goals.
Sharing knowledge about risks can be quite a challenge, especially
across different organisational functions. But risk cannot be managed
in isolation. Experts working in this field agree that the biggest
potential for risk lies in the interface between different functions
because people working in functional silos often do not appreciate the
impact a course of action may have on the wider organisation.
Consider the following examples of how siloed activity can increase
risk:
* An in-house audit team can convey the wrong messages if they are
seen as an independent unit that is there just to police activity.
All the negative connotations associated with this perception raise
the risk that people in different departments do not tell them about
potential risks. Instead of dealing with risks promptly and
effectively, risks are left unattended, leading to a situation where
the consequent damage could be very detrimental to the
organisation's reputation and/or profitability.
* A sales department decides to have a significant push in a
particular product area without liaising with the marketing
department, which has already set in motion a national advertising
campaign for a different product area. As a result, customers
receive mixed or even contradictory messages, risking loss of
business. Consistency in approach is key when undertaking product
promotion.
* An organisation that is growing primarily through mergers and
acquisitions faces risks in integration activity. As each new
business is acquired, the issues of different cultures, different IT
systems and different ways of working come to the fore. For some
organisations the integration process has been so challenging that
the newly acquired businesses are left to continue operating in
their own way because integration is just too difficult. This may
give rise to the situation in which each new business is set up to
optimise its own goals and targets but without contributing as well
as it could to overall business performance.
* In a manufacturing company, the finance department has decided that,
for cash flow purposes, they will be changing settlement terms from
a fortnightly basis to a monthly basis. This decision resulted in a
delay of the next delivery of supplies by two weeks, the lack of
essential components, created a temporary halt in production and had
an adverse knock on effect upon their own delivery schedules. This
seemingly sound reason for changing payment terms (to improve cash
flow) compromised profitability because the finance department
failed to communicate with the production line.
* The Space Shuttle Columbia disaster in 2003 occurred because
different parts of the organisation failed to communicate with each
other about the potential risks. After a piece of foam hit the left
wing upon launch, it was judged that this would not have any effect:
however, when the shuttle subsequently re-entered the earth's
atmosphere, it broke up and all the crew members were killed. This
is an extreme example but it demonstrates the importance of
understanding how an action that is the responsibility of one part
of the organisation might create a significant risk elsewhere in the
organisation.
How an organisation tackles each of these issues will have a
significant effect on enterprise-wide risk management. The role of the
Chief Risk Officer (CRO) may be crucial in bringing together disparate
parts of the organisation (similar responsibilities feature in the
Chief Knowledge Officer role) and in raising the understanding and
awareness of regular interaction.
Both formal and informal mechanisms for knowledge sharing should be
encouraged -- e.g. mediated electronic discussion forums as well as
informal networking opportunities and 'water cooler' chats. Using
knowledge management tools including intranets, portals, discussion
forums as well as encouraging face-to-face exchanges can all assist.
Translating the processes and tools of successful knowledge management
programmes creates the systematic sharing (reporting) of risk and
control. As a result, knowledge across the different business units
can eliminate the cumulative effects of risk.
To do: complete the activity, "KM/RM Tool Checklist":
This activity can be found in the sample from the Risk Management
Report and Tool Kit, found on the FreePint website at
. It is one of
eight activities included in the Risk Management Report and Tool Kit
to help users adapt and incorporate the report's contents to their
organisations.
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Jela Webb, via her business, Azione Consulting, is a freelance
strategic adviser, consultant and trainer in information and knowledge
management, working with private and public sector clients. An
associate of Ashridge, Learnership and TFPL, she has implemented KM
programmes in FTSE 100 companies and has a particular interest in how
best to manage and motivate knowledge workers.
She is also a Visiting University and Business School Lecturer and
presents at KM conferences. As a writer, Jela has contributed articles
to FreePint and leading KM journals.
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Related FreePint links:
* "Risk Management Report and Tool Kit" Written by Jela Webb.
Published by Free Pint Limited. ISBN: 978-1-904769-11-X
* "Professional Qualifications in Information and Knowledge
Management" By Jela Webb
* "Ten Steps to Maturity in Knowledge Management: Lessons in Economy"
Written by JK Suresh and Kavi Mahesh, Reviewed by Jela Webb
* "Risk management: an additional axis for information professionals?"
By Terry Kendrick
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