LESSONS LEARNED FROM HISTORY ABOUT RISK MANAGEMENT: THE HUDSON BAY START - FinXL IT Professional Services FinXL IT Professional Services

Living and working in 1600’s Canada was a serious business. The “Hudson’s Bay Company”, started by King Charles II of England in 1670 is one of the world’s oldest commercial organisations.

Their business was provisioning fur trading expeditions operating out of Hudson Bay with the essential supplies and equipment they needed to be able to operate and survive in the wilderness. The brutal conditions, sub zero temperatures, geographic remoteness and threat from other traders and the indigenous population meant that conducting a trading expedition was literally a life or death affair, even before looking at the balance sheet (if you’ve seen “The Revenant” it will give you an idea of the conditions endured).

The impact of forgetting essential equipment could be fatal and led to a novel approach to risk management. After stepping off on the expedition (or using canoes), the group would setup the first night’s camp only a km or so away from their departure point. This was to allow a rehearsal of overnight camping activities and to identify any critical pieces of equipment had been forgotten. If something had been mislaid then it was a quick walk back to the main camp to replace the item. The team could then pack up the next morning an continue on knowing that they had all the gear they needed. While this cost precious time in an already short trading season, it massively increased the success rate of actual expeditions because risks could be tested in a controlled environment.

Applying this approach to present day project management is a good way to test your risk mitigation activities and to identify any unknown issues before they become major ones. A common approach is to select a few of your most critical risks and assign a subset of your team to test the assumptions around these risks on a small scale. Schedule this activity to occur early in the project and use the lessons learned from this activity to drive the subsequent approach for the rest of the project. While it may consume valuable time and key resources, it provides a massive payoff in terms of increasing the likelihood of a successful project outcome.

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