I love coming up with the cute, pithy, epigrammatic or aphoristic titles for my blogs ☺ I also love a good thesaurus!
Last week I espoused the co-creation of a decision map to improve your team’s decisions. That is, to co-create a MENTAL model of how the decision is made and look for ways to improve the decision maker(s) JUDGEMENT.
Improving judgement can be from any number of types of decision support tools. From guidelines to sophisticated data models built using machine learning or AI. The most basic are:
Rapid Ranking: A tool designed to score options for a decision to identify which rates the highest from a set of defined criteria. Example: To determine if an option is too risky.
Decision Trees: A guidance tool that asks for Yes or No answers to flow down – or across the tree to an end point. Example: To determine if a breach requires compulsory reporting.
Multi-Criteria Decision Analysis: Used to assist a decision maker to play one positive aspect of a decision against a negative aspect. Example: To balance impact on the environment with economic benefit decisions.
Each of these can help operationalise your risk appetite statement. First identify where most variability in decision making (when it comes to risk appetite) is occurring and then consider if one of these tools are the answer. If not, then the answer might be in other options I will write about next week.
For more on decision making and why we get decisions wrong, you might want to check out this whitepaper called Think it Through.
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