Grant Purdy, Roger Estall: Invest in improved decision-making

Grant Purdy and Roger Estall have recently published a book on decision-making called Deciding. Written to help decision makers (they call them Deciders) to make ‘even better decisions’ it goes directly to the two big challenges for every Decider – ensuring that each decision will contribute to (rather than detract from) achieving the purpose of their organisation, and being sufficiently certain that the outcomes that result from the decision, are those they intend.

In parallel with the dismantling of the ‘risk management’ edifice, attention may be required to enhance recognition, understanding and execution of the universal method of decision-making as explained in the main chapters of this book.

This is prudent as some Deciders might have been assuming that ‘risk management’ activity (such as producing ‘risk registers’ ensured that uncertainty was being addressed. Training may be assisted, at least initially, by deploying dedicated support staff in ‘decision-support’ roles.

Any attempt to ‘cross map’ the universal method for decision making with all or any aspects of ‘risk management’ “ill have no benefit. Instead, it will confuse and complicate, and have the effect of keeping alive what is trying to be shed. In short, any such approach will be doomed to failure and detract from improved decision making.

The nature of any compliance obligations that might have caused an organisation to at least appear to adopt ‘ risk management’ practices, varies according to the nature of the organisation and its regulatory and contractual obligations. In broad terms, however, there are two possible lines of approach that can be taken to address the issue of unwanted ‘risk management’ compliance obligations:

1. Tactically, the organisation can approach the constraining party (whether a regulator or counter-party imposing contractual obligations) with a view to demonstrating ‘equivalence’. This can be achieved by explaining what is being done, the reasons for the change in approach and the superiority of the results achieved by shifting the focus from uncertainty to achieving sufficient certainty and from artificial jargon to ‘real’ language aligned to the unique characteristics of the organisation.

It will be important to the success of such discussions that the constraining party is able to see that without the ‘risk management’ millstone, their interests are also advanced.

If there is a willingness in principle to accept this approach, it may be necessary to devise a form of agreement with the constraining party as to how verification or at least evidence of enhanced decision making can be provided.

2 . If the equivalence argument is rejected, then the effort can be transferred to a strategic approach with, until it is successful, making the least possible (and least harmful) effort to keep the constraining party satisfied in the meantime.

The ultimate aim of the strategic approach is to bring about a change in the constraint obligation (for example, amended regulations or contractual obligations) at least to the extent of empowering the constraining party to accept an equivalence approach. This might be attempted via a joint approach with others in a similar position or via a sector or industry body acting as advocate and negotiator with expert support.

Hopefully too, this book ‘”ill help regulators see that the clunky artificial risk management compliance regimes that they are imposing, relying on and enforcing are actually supporting perverse and unhelpful behaviours rather than helping improve performance and safeguarding the regulator’s interests and responsibilities. They need only look at Boeing and Enron for evidence of that.

Most decisions that achieve their desired outcomes are made without the millstone of ‘risk management’. By contrast, the distraction of ‘risk management’ often leads to poor decisions. The universal method of decision-making enables Deciders to achieve sufficient certainty: there is simply no need for any version of ‘risk management’.

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Управление рисками

В этом коротком и очень увлекательном курсе, Алексей Сидоренко расскажет о причинах внедрения риск менеджмента, об особенностях принятия управленческих решений в ситуации неопределенности и изменениях в новом стандарте ИСО 31000:2018.


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