Decision and Risk Analysis
Decision & Risk Analysis is a formal discipline which brings order out of the chaos of complex decision making. It uses proven techniques for identifying creative options, assessing and understanding uncertainty, and making actionable recommendations aligned with the fundamental values of the organization. D&RA avoids the most common pitfalls of traditional decision making processes which are often stuck in predictable biases about data or problem scope and also suffer from a lack of clarity about critical business objectives and what influences them.
Our framework consists of 4 steps:
1. Understand the situation
An effort to clearly understand and agree on the current situation is often overlooked when businesses ask “what do we do now?” We will help you work with the most important stakeholders to identify and classify the relevant issues. This will enable your team to fully align on the choices to be made, the risks to be understood, and what the desired outcomes would accomplish. Shared understanding of the existing situation is the first step to avoid time-consuming rework while capturing all relevant input.
2. Create your decision frame
Once you understand your situation, you must logically connect the pieces in a coherent frame. This begins by analyzing and prioritizing your objectives, followed by carefully determining the scope of the impeding decision, setting aside what has already been decided and the tactical details for implementation. We will guide you through a creative and rigorous approach to creating decision alternatives, and mapping out the value of each alternative put into action. The resulting well-framed problem identifies the drivers, dependencies, risks and uncertainties which must be considered to make the right decision.
3. Evaluate your options
Identifying viable alternative strategies is crucial, even more so to pick the best one. We will help you identify those variables which contribute most to risk and determine the total risk profile of each strategy. We can hone in on the value of alternatives under different scenarios, including costs and benefits of efforts to gather additional information, or control critical uncertainties. Based on our experience and insights, we will ensure that analyses are presented in a way that maximizes overall comprehension.
4. Make your decision
Now you are in a position to make an educated and fact-based decision. This requires the outcomes of the evaluation, and the most critical supporting data, to be shaped into a cohesive story resulting in compelling, actionable recommendations to maximize value and mitigate risk. After the decision, D&RA will form the foundation of the implementation plan and the corresponding metrics. In this way, the knowledge acquired via our D&RA process remains of value during the entire realization of the decision.