As someone whose primary function at work is the ‘management’ of risk in all of its glorious forms, I have over the years become very comfortable with its accepted definition and how to measure it. ISO 27005:2008 was my bible, giving me the flexibility to choose a schema that worked for my particular environment as well as the credence that I was doing it right. I always knew that assigning arbitrary numbers to things wasn’t exactly the most scientific way of actually measuring something, but I could deal with that by simply talking about “indicative values” and “helps with prioritisation”.
It was a little under two years ago at the RSA conference that I attended a talk entitled “Pimp My Risk Model: Getting Resilient in a Complex World” by David Porter, and he spoke about a new approach to risk modelling. Rather than focussing on what could happen, and then play that through to the conclusion of an impact that is then measured, it instead focussed on what the desirable outcomes were in the first place and then worked backwards establishing what was required to achieve them, basically dependency modelling. Not only was this more efficient and scalable as not all permutations of threat/vulnerability/asset (for instance) are required to be worked out, it provides better information for early decision making.
The concept is not new, and has its roots in the late last century in the financial markets/actuaries who were looking at better ways to model and manage risk.
There are a number of proponents to this approach, all of whom have a far better understanding than me of this approach, but despite this in the last two years I have simply not seen it in a practical form that can be used every day. Unfortunately, and I am sure I am not alone here, if I can’t implement it quickly it gets passed over for the next best thing that can be. In fact, and perhaps in my own blinkered universe, the approach itself barely raised a murmour since. And yet the concept had stuck with me especially on the few occasions when I had heard it talked about.
It was on Russell Thomas’s blog, exploringpossibilityspace, that I saw just the other day this very approach being touted again. What I enjoyed about this post was the balanced and educational view of the traditional approach (little “r” approach in Russells’s parlance) versus the new dependency modeling approach (big “R”). I think the criticism of ‘r” methods is well founded, although it is widely understood in business and when used properly can help produce at the very least tactical indicators of risk to the business.
My challenge with the ‘R’ approach is that I have yet to see it applied in practical terms and in a way that is easy to digest and understand (I think I hurt myself about two thirds of the way down the article trying to get to grips with the concepts!). As a result therefore, getting business buy in is going to be extremely challenging. Partial information from an ‘r’ approach reaching the business successfully is going to be better than no information from an ‘R’ approach (however better the data is) reaching the business.
I would strongly recommend everyone to read Russell’s writings on this risak model, which also contains links to other resources as well.
There is more work to be done, but I hope it focuses on making it possible to use the approaching a day to day environment; they say there is nothing new in the world of information security, but I have high hopes for an approach to risk modeling that will allow me to do so much more for the business in terms of long term, strategic guidance and support.
And when I can use this model in Excel, count me in!
<Some of you have commented on my extended absence, but a busy few weeks followed by a lovely holiday camping in France took priority. Back in the saddle now and very much looking forward to your comments and feedback!>
I was able to attend the RANT forum a few nights ago, and watch an excellent presentation by Sarb Sembhi. However, and this is no insult to the speakers at the RANT forums (being one myself) the most valuable part of the evening is the socialising with colleagues and peers before and after.
I was talking to a couple of people who were recounting the challenges they face with their leadership regarding their risk management activities. I paraphrase greatly, but the gist of the issue was
Highlighting risks to them is all well and good, but then suddenly they tell us that another activity needs to be escalated up the risk matrix, or that there is a hot topic that they want pushed to the top of the risks list so it gets more attention. How are we supposed to manage a risk programme with any credibility when risks get artificially prioritised or de prioritised according to the mood of management?
We came to the conclusion that the risk appetite of the management team in question was a very flexible and fluid thing that changed quite frequently, and seemed entirely disconnected from the risk management activities being carried out.
This is a complex issue, and not one that can be solved in a single blog post, but there are a few guidelines and concepts that may be pertinent to heading off this kind of behaviour.
- Listen to them. On the whole an organisations management know what activities and changes will affect the business more than you. If they are highlighting something it is not to mess you around but because they are genuinely concerned about it. Look at your risk programme; does it squarely address the risks they are highlighting? Are they new risks, old risks, or poorly understood risks? Perhaps you have already found them and they need to be reviewed under the new light cast on it by management.
- Educate them. How much does your management team actually understand about the risk work you are doing? Do they really know what the scope of your remit is, how you go about finding risks, and more importantly how you measure them? ISO27005 is often described as an arbitary way of measuring risk, but it does a good job of explaining how you can approach and understand it. If you use that standard in your programme, make sure they understand how you measure them, and get their buy in to the approach. This way, when you disagree with their analysis of a “new” risk you can explain in agreed terms why.
- Use your governance structure. Your management team should only be looking at risks that are escalated to them, that is to say residual risks that are still considered as “high” (or whatever parlance you use). Every other risk below that should be managed and dealt with by the governance structure in place. Certain lower risks can be mitigated (managed, avoided or transferred) by people closer to that risk; a developer could change a portion of code, a project manager could remove or add contractors or a team member could go through more awareness training. Changing the course of a project or increasing the staffing costs by 50% is beyond their remit and they are therefore not able (or authorised) to treat them effectively; these risks get passed up your governance chain until they reach a point at which they can be dealt with. At the very top I would estimate they should be seeing no more than 0.1% of total risks escalated to them. Any more and it may be that the structure underneath is not doing their job.
- Understand their appetite. One of the standard ISO 27005 risk acceptance approaches provides a matrices for what is acceptable and what isn’t. It is provided as an example only, and should not be used out of the box without considering the risk appetite of your organisation. If you are a risk averse organisation, the yellow and red band move down to the lower left, thereby meaning more “red” risks will need to be addressed. A risk taking organisation will move the green and yellow band up, thereby ensuring fewer “red” risks will need to be addressed. The risk profile of an organisation is something that is rarely understood by those that measure risk, and therein lies the problem. Only if the risk profile is drawn up, understood (including the approach to measure the risks in the first place) and signed off can risks be identified, “measured” and addressed in a way that meets the organisations business objectives.
- Accept that the appetite changes. if you review your risks annually (as a bare minimum) that is also a cue to review the risk appetite. If incidents throughout the year affect the business for the good or bad, that is a cue to review the risk appetite. If the organisation management suddenly think something is a big risk and needs to be addressed, that is a cue to review the risk appetite. And when I say review, I mean with the management, and not just in isolation.
There… simple! Well, not at all when you face these challenges every day, but if you can start that dialogue with your management and start to understand the business as they understand it you will be a long way towards heading off the “the sky is falling, fix it now!” response to risks.