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Decision Making: Risk Management, Systems Thinking and Situation Awareness

Risk Management, Systems Thinking and Situation Awareness

Alan C. McLucas

Contents

  1. Foreword
  2. Preface
  3. 1 MANAGERIAL COGNITION AND CAUSALITY
    1. 1.1 A PARADOX AND A POLAR BEAR
    2. 1.2 STAKEHOLDER INVOLVEMENT IN RISK MANAGEMENT
    3. 1.3 NEED TO UNDERSTAND MANAGERIAL COGNITION FIRST
    4. 1.4 MAPPING WHAT WE KNOW ABOUT THE PROBLEM AT HAND
      1. 1.4.1 Overview Of Cognitive And Concept Mapping Methodology
      2. 1.4.2 Personal Constructs Involving Fuzzy Logic
      3. 1.4.3 Fuzzy Logic Links Between Concepts
      4. 1.4.4 Building And Analysing Concept Maps—A Short Tutorial
      5. 1.4.5 Products Of Mapping
      6. 1.4.6 Robustness Of Mapping
    5. 1.5 KNOWLEDGE ELICITATION BASED ON MANAGERIAL COGNITION
      1. 1.5.1 Human Decision Making—Bounded Rationality And Heuristics In Quick Decisions
      2. 1.5.2 ‘Gut Feeling’ In Human Decision Making
      3. 1.5.3 Human Decision Making—When We Get It Wrong
      4. 1.5.4 Cognitive Failure
      5. 1.5.5 Confusion Over Correlation And Causality
      6. 1.5.6 Desire To Keep It Simple
      7. 1.5.7 Human Decision Making—Belief And Learning
      8. 1.5.8 Dynamic Environments—Misperceptions Of The Implications Of Feedback
      9. 1.5.9 Human Decision Making—Different Perspectives On The Same Problem
      10. 1.5.10 Masking The Reasoning Behind Decisions—Ratio Decidendi And Obiter Dictum
      11. 1.5.11 Systems Of Meaning
      12. 1.5.12 Summary Of Human Cognitive Limitations
      13. 1.5.13 Harnessing Human Recognitional Capacity
    6. 1.6 IMPORTANCE OF COMMUNICATIONS IN DECISION CYCLES
    7. 1.7 DYNAMIC AND COMPLEX BEYOND OUR INTUITION
    8. 1.8 DEVELOPING MENTAL AGILITY
    9. 1.9 SUPERIOR INSIGHTS LEAD TO SUPERIOR LEARNING
    10. 1.10 BARRIERS TO LEARNING AND EFFECTIVE DECISION MAKING IN DYNAMICALLY COMPLEX ENVIRONMENTS
    11. 1.11 SYSTEMS OF KNOWLEDGE-POWER
    12. 1.12 FINDING OUT ABOUT A PROBLEM SITUATION
    13. 1.13 LEARNING OPPORTUNITIES LOST
    14. 1.14 SUMMARY
  4. 2 WORST FAILURE - FAILURE TO LEARN ABOUT RISKS
    1. 2.1 MORE THAN A SIMPLE ACCIDENT
    2. 2.2 BLACK HAWK HELICOPTER CRASH—CASE STUDY OVERVIEW
      1. 2.2.1 Black Hawk Helicopter Crash—Executive Summary
      2. 2.2.2 Concept Mapping Of Factors Contributing To The Accident
      3. 2.2.3 Concept Mapping Methodology—By Example
      4. 2.2.4 Analysis Of Executive Summary—In Brief
      5. 2.2.5 A Call For Quantification Of Causal Linkages
      6. 2.2.6 Chief Of Army’s Report To The Minister For Defence
    3. 2.3 INSIGHTS DERIVED FROM FEEDBACK LOOPS
    4. 2.4 IDENTIFYING WHERE TO APPLY RISK-MANAGEMENT EFFORT
    5. 2.5 FOCUS ON CRITICAL NODES
    6. 2.6 BREAKDOWN IN MANAGEMENT OF RISKS
    7. 2.7 PITFALLS AND POINTERS OF CONCEPT MAPPING PRACTICE
    8. 2.8 SUMMARY
  5. 3 ROYAL CANBERRA HOSPITAL IMPLOSION AND FURTHER INSIGHTS
    1. 3.1 EVENTS GONE SO HORRIBLY WRONG
    2. 3.2 IMPLOSION INQUIRY: NO SIMPLE ANSWERS
      1. 3.2.1 Method Of Analysis Of The Coroner’s Inquest Report
      2. 3.2.2 Big Picture OR Little Picture—Working At The Appropriate Level Of Aggregation
      3. 3.2.3 Maps Produced From Coroner’s Inquest Report
      4. 3.2.4 Winding The Clock Back To An Earlier Time
      5. 3.2.5 What We Can Draw From The Completed Maps
    3. 3.3 IDENTIFYING CANDIDATES FOR QUANTITATIVE MODELLING
    4. 3.4 VALUE OF MAPPING
    5. 3.5 THE BUSINESS DYNAMICS CONTEXT
    6. 3.6 REFLECTING ON OUR DESIRE FOR SIMPLE ANSWERS
    7. 3.7 FAILURE TO LEARN—FAR TOO COMMON
    8. 3.8 MAJOR RISK KEY PERFORMANCE INDICATORS
    9. 3.9 OBSERVATIONS ABOUT THE USE OF CONCEPT MAPPING AS AN ANALYTICAL TOOL
    10. 3.10 DIFFICULTIES OF AMALGAMATING MAPS
    11. 3.11 SUMMARY
  6. 4 COMING TO GRIPS WITH 'WICKED' PROBLEMS IN RISKY SITUATIONS
    1. 4.1 REFLECTION ON DIFFICULTIES IN MANAGING RISKS
    2. 4.2 BRIEF REFLECTION ON THE BLACK HAWK HELICOPTER CRASH
    3. 4.3 AVERSION TO DEALING WITH EXCESSIVELY COMPLEX ISSUES
    4. 4.4 COGNITIVE DISSONANCE
    5. 4.5 CULTURAL IMPEDIMENTS—BEING INSENSITIVE TO RISKS
      1. 4.5.1 Apparent Insensitivity To Risks—An Example
    6. 4.6 WINNING THE INFORMATION NEEDED TO ENABLE ANALYSIS
    7. 4.7 STAKEHOLDER MANAGEMENT
    8. 4.8 WHY COMPLEX PROBLEMS ARE DIFFICULT TO MANAGE
    9. 4.9 CHARACTERISTICS OF WICKED PROBLEMS AND STRATEGIES FOR ADDRESSING THEM
      1. 4.9.1 Tame Vs Wicked Problems—Ability To Formulate The Problem
      2. 4.9.2 Tame Vs. Wicked Problems—Relationship Between Problem And Solution
      3. 4.9.3 Tame Vs. Wicked Problems—Testability
      4. 4.9.4 Tame Vs. Wicked Problems—Finality
      5. 4.9.5 Tame Vs. Wicked Problems—Traceability
      6. 4.9.6 Tame Vs. Wicked Problems—Explanatory Characteristics
      7. 4.9.7 Tame Vs. Wicked Problems—Level Of Analysis
      8. 4.9.8 Tame Vs. Wicked Problems—Reproduceability
      9. 4.9.9 Tame Vs. Wicked Problems—Replicability
      10. 4.9.10 Tame Vs. Wicked Problems—Responsibility
    10. 4.10 SUMMARY
  7. 5 ADDRESSING WICKED RISK-MANAGEMENT PROBLEMS
    1. 5.1 SEEKING EFFECTIVE PROBLEM-SOLVING METHODOLOGY
      1. 5.1.1 Reliance On Stakeholders’ Views
      2. 5.1.2 Role Of Management Teams In Addressing Strategic Problems
      3. 5.1.3 Principles Of Method—Initial View
      4. 5.1.4 Application Of Methodology
      5. 5.1.5 Unavoidable Complexity
      6. 5.1.6 Making The Most Of Cognitive Capability
    2. 5.2 SYSTEMS THINKING AND SYSTEM DYNAMICS MODELLING PRINCIPLES—KEYS TO UNDERSTANDING
    3. 5.3 UTILITY OF QUALITATIVE ANALYSIS
    4. 5.4 ITERATIVE AND INTERACTIVE STRATEGY DEVELOPMENT
      1. 5.4.1 IISD In Brief
      2. 5.4.2 IISD—Inputs And Outputs
      3. 5.4.3 Threats To IISD
    5. 5.5 SUMMARY
  8. 6 APPLICATION OF IISD: A TUTORIAL FOR REAL-LIFE PROBLEMS
    1. 6.1 DISAPPOINTINGLY INEFFECTIVE IN MANAGING COMPLEXITY
    2. 6.2 TUTORIAL—PREVIEW
    3. 6.3 NATURE OF THE TUTORIAL PROBLEM—BRIEF OVERVIEW
    4. 6.4 THE DIRECTORS’ QUANDARY
    5. 6.5 PUTTING THREETWOONE-READY BACK ON TRACK—FIRST STEPS
    6. 6.6 ACCOMMODATING STAKEHOLDER PERSPECTIVES
    7. 6.7 WORKING WITH SUBGROUPS TO ELICIT THEIR VIEWS OF THE PROBLEM SITUATION
      1. 6.7.1 Impediments To Reaching A Shared Understanding Of The Problem Situation
      2. 6.7.2 Results Of Workshops Conducted With Each Subgroup
      3. 6.7.3 Validation Of Concept Maps
    8. 6.8 PRODUCTION AN ‘EXECUTIVE SUMMARY’ CONCEPT MAP
      1. 6.8.1 Analysis Of Executive Summary Concept MAP
    9. 6.9 ANALYSIS OF DYNAMIC BEHAVIOUR USING CAUSAL LOOP OR INFLUENCE DIAGRAMMING
      1. 6.9.1 A Critique Of The Use Causal Loop Diagrams
      2. 6.9.2 Developing And Interpreting The Causal Loop Diagrams For Threetwoone’s Problems
      3. 6.9.3 Developing An Influence Diagram For Threetwoone’s Problems
      4. 6.9.4 Thinking The Problem Through In Detail Using Causal Loop Diagrams And Influence Diagrams
    10. 6.10 IMPLEMENTATION AND MONITORING
    11. 6.11 PITFALLS AND POINTERS IDENTIFIED DURING ATTEMPTS AT SOLVING THREETWOONE’S PROBLEM
    12. 6.12 REACTION TO IISD AND SYSTEM DYNAMICS MODELLING
    13. 6.13 SUMMARY
  9. 7 TAKING ACTION
    1. 7.1 ATTITUDES CONSTRAIN AWARENESS
    2. 7.2 MANAGING COMPLEXITY—BUILDING A MULTI-DIMENSIONAL JIGSAW PUZZLE
    3. 7.3 STRATEGIES FOR BUILDING THE RISK-MANAGEMENT PUZZLE
    4. 7.4 HIGHLY DESIRABLE ELEMENTS OF RISK-MANAGEMENT CULTURE
    5. 7.5 THE RISK-MANAGEMENT PROCESS
      1. 7.5.1 Establish The Context
      2. 7.5.2 Identify Risks
      3. 7.5.3 Analyse Risks
      4. 7.5.4 Evaluate Risks
      5. 7.5.5 Risk Treatment
      6. 7.5.6 Monitor And Review
    6. 7.6 NAVIGATING THE RISK-MANAGEMENT PROCESS AND MAKING THE ‘RIGHT’ DECISIONS
      1. 7.6.1 Problem Identification And Structuring
      2. 7.6.2 Model Building And Use
      3. 7.6.3 Development Of Action Plans
    7. 7.7 VIGILANCE AND CONTINUAL ITERATION
    8. 7.8 TAKING UP THE CUDGEL

Author

Dr Alan McLucas is a senior lecturer at the University of New South Wales at the Australian Defence Force Academy. He holds bachelors, masters and doctor of philosophy degrees in engineering, management and operations research and has had extensive experience in management, complex problem solving, and strategy development.