How Framing the Action Can Help You Manage Risk

By John Ager, Kepner-Tregoe 

Critical Thinking begins with framing the issue at hand so we can assess how much we already know, how much we don’t know, and what questions we need to ask to know enough to take effective action. When the issue at hand is explaining a change in performance, stating the problem can be quite straight forward, name the thing whose performance has changed and describe the change in performance, for example “cabinets have paint gaps”. When the issue at hand is making a choice, stating the decision can also be straight forward, name what you want to have when you are done and include a choice word, for example, “choose packaging for TM tablets”. However, when the issue at hand is risk, the frame is less intuitive. Although the focus will ultimately be on the risks, if we don’t frame the context in which the risks might occur, we might fail to address all of the risks or become overwhelmed by too many interwoven risks.

The context of risk is always an action. Typically, we think of action in terms of implementing a change of some kind, for example “launch a new product”, “install a new line”, or simply “change over from one product to another”. But, doing the same thing, for example “maintain product on the market”, is also an action and making no change can have risk associated with it. These action statements consist of an  action (verb), end result (noun), and modifiers (adverbs or adjectives). When considering how to define action, end result, and modifiers it is useful to recognize action statements necessarily derive from decisions; someone has chosen to do something and we want to manage any risk associated with implementing that decision. As we discussed above, decision statements consist of a choice word (verb), result (noun), and modifiers (adverbs or adjectives). So, when writing action statements, we need to begin with the chosen result and then consider the action required to transform it into an end result. So, mechanically, if my decision statement is “choose a family vacation” my action statement might be “take a family vacation”. This might sound simple and intuitive, but if not done well can diminish value of the risk analysis. And, to do it well, we need to consider the intent of stating decisions and stating actions.

The intent of stating decisions is to establish an appropriate frame for identifying alternatives to consider, not too narrow and not too broad. If we are too narrow, then we might rule out creative alternatives that could work. If we are too broad, then we might spend time evaluating alternatives that can’t work. In basic terms, we adjust the breadth of decision statement to consider the appropriate range of alternatives by changing the result or the modifiers. For example, if we are prepared to spend the time required to consider additional, perhaps creative, alternatives for achieving the fundamental purpose of our vacation, then we can change “choose a family vacation” to “choose how to spend time with family”. Or, if we want to streamline the decision making process and spend less time on the decision by considering fewer alternatives, then we can change to “choose a summer family vacation in the mountains”.

The intent of stating actions is to establish an appropriate frame for identifying preventive actions, contingent actions, and triggers, not too narrow and not too broad. If we are too narrow we might not identify sufficient countermeasures, preventive actions to reduce the probability of potential problems or contingent actions to minimize seriousness or triggers to increase detectability. If our risk management frame is too broad we might get overwhelmed peeling the onion, trying to manage cause of cause of cause, or resorting to ineffective and inefficient generalized counter-measures. We need to adjust the breadth of action statements to achieve appropriate focus by changing the Result or the Modifiers or the Action. For example, “Complete Family Vacation in N.C.”, consists of several related but separate actions and end results: “Drive to N.C.”, “Stay in N.C.”, “Drive to N.J.” Furthermore, “Stay in N.C.” can be further separated into: “Go to Camp”, “Go Hiking”, “Go Horseback Riding”. Because each of these Action Statements may be subject to different Potential Problems with different Likely Causes and Likely Effects, by separating and clarifying them, we will be better able to identify Preventive and Contingent Actions and Triggers specific and appropriate to each.

So, although risks are ultimately the focus of risk management, before we can appropriately identify them, we need to understand and frame the action(s) we are trying to protect. To understand the action(s) we are trying to protect, we need to understand the decision that led to the action(s). With an understanding of the decision, we can then frame the context in which the risks might occur, so we can address all of the risks.