Everybody can manage risk, only few can minimise it.
Organisations use resources to try to achieve an aim. This can be very challenging even when all goes well. But there are risks everywhere. Not just the risks you can point at, identify and manage, but also the risks you can’t readily identify. As the organisation grows these unidentified risks (and the related uncertainty) only multiply. Does the organisation have all the right experts it needs to minimise risk in achieving its goal? Is the organisation able to provide the conditions to maximally utilise the available expertise? Is the organisation able to identify the relevant changes both within and outside of it?
To these uncertainties the principles of Risk Management cannot be applied. These uncertainties are risks which cannot be “managed” away. These uncertainties are, in fact, “unmanageable risks”. To deal with the emotional arousal of not being certain organisations use the familiar tools of direction, inspection, contracts and protocols. But what these familiar tools have in common is that they are either the result of, or tend to result in, decision making. Which increases risk.
Experts, by definition, minimise risk. Experts know what to do in order to achieve a desired outcome. They don’t come to “a conclusion or resolution after careful thought”, because to them the situation is transparent. Experts don’t make decisions. Experts make substantiated choices instead. But what does it take to become an expert?
In the DFS-textbook the term “expert” (noun/adjective) is defined as the ability to minimise risk in achieving a desired outcome. One of the key-words here is “ability”. To minimise risks decisions are to be avoided, which means that — to the expert — situations must be transparent.
In DFS an Event model is used which states that the outcome of any event is determined by the event conditions and “universal rules” which impact on these conditions. To be an expert with respect to an event means that these conditions must be identified and the universal rules known. As we are generally more interested in achieving a particular desired outcome, the expert has to be able to perceive the event’s information, and also know how to alter the event’s conditions so that the desired outcome can be achieved.
To become an expert, the information pertaining to an event (event conditions and universal rules) has to be perceived. It takes a combination of ‘perceptiveness’ and ‘experience’ to be able to do so.
With regards to perceptiveness:
- Perceptiveness is the ability to, in a given situation, see new information that wasn’t perceived before.
- Someone’s degree of perceptiveness (someone’s ability to perceive new information) may not be a constant, but from a practical perspective, for most events that occur in an organisation, a person’s or an organisation’s perceptiveness may be considered constant.
- Perceptiveness is rarely event-specific but generally applies to a broad range of related or similar events.
- Perceptiveness is qualified: some people perceive certain types of information better than other types. E.g. some have a high degree of e.g. ‘social perceptiveness’, others a high degree of ‘cognitive perceptiveness’, still others may have both, or different types of perceptiveness.
- Someone who is a ‘perceiver’ is an observer who is interested (curious) in the universal rule that lead to the new information what was just observed. Not all observers are interested in this. Not all observers, hence, are perceivers.
With regards to experience:
- ‘Experience’ relates to how often someone has been in a particular situation (the totality of identical or similar events lived through in the past). It is a measure of the number of opportunities had to perceive information and to learn universal rules in a particular field.
- Experience can be gained slowly or rapidly, based on the type of event. There are events which happen several times during the day (e.g. dealing with customers), and there are events which take months or years (e.g. projects).
- Some events may be unique occasions, for which no or only partial experience can be gained. When experience plays a lesser role, perceptiveness becomes all the more pivotal in minimising risks.
- Experience in itself does not communicate anything without outcome data. Experience doesn’t communicate expertise, experience combined with good performances does.
Everyone is an expert when it comes to gravity. We all know what will happen when a glass is knocked off the table. When it comes to organisations, to departments, to teams, to positions of management we are not all able to minimise risks in achieving the desired outcome.
Someone’s relevant experience may be relatively easy to assess, but someone’s ability to perceive can’t be directly measured. It can be observed, however. Which is another topic, and described at length in these two articles: “On experts and expert organisations” and “How to predict future behaviour of individuals as well as organisations.”
The approach of Decision Free Solutions uses four steps (DICE), five principles (TONNNO) and the role of the Decision Free Leader (DFL) to achieve this. An introduction to the approach of Decision Free Solutions is provided in a short article you will find here.Back to all explanations Message me about this explanation
The alternative to decision making is transparency.
Decisions are conclusions reached after careful thought. When something requires 'thinking' it is not transparent. Transparency allows organisations to manage by approval (instead of decisions).Read more
That decisions increase risk is not semantics, it is logic.
That decisions increase risk follows from the dictionary definition and use of logic. Few experience decisions in this way, for various obvious reasons. These reasons don't take anything away from decisions increasing risk. The risk is for real.Read more
To stay ahead, freeing up resources beats cutting cost.
To stay ahead relying on quality alone is not enough. But the approach of "cutting cost" results in reduced quality and margins. Utilise expertise to free up resources instead. Cost reduces, and margins increase.Read more
Het vrijmaken van resources is efficiënter dan kosten besparen
Om de concurrentie voor te blijven is het leveren van kwaliteit niet voldoende. Simpelweg “kosten besparen” leidt tot kleinere marges. Inzet van expertise doet het tegenovergestelde.Read more