Decision Making / 7 / 7.5 / 7.5.1

7.5.1 Establish The Context

Assuming there is a logical beginning to the process, we would start by establishing the context. This is a most demanding stage in that to do this well assumes that a considerable amount is already known about:

• The strategic context —for example, this includes the nature of the environment in which an organisation operates or a project will be delivered or some purposeful human activity will be undertaken.
• The organisational context —for example, this includes the way the organisation is structured and how it operates, including the extent of operative knowledge managers have of their relevant domains of action. This context may be technical³ or non-technical.
• The risk-management context —for example this includes the nature of operational, technical and regulatory frameworks and the nature of what is being done—indeed this might include any matters which impact upon the way risks could develop and play out.

Much of this book has concentrated upon the complex and perplexing task of establishing the context. To establish the context demands prior knowledge, experience and considerable skill. Unfortunately, no manager can have the necessary prior knowledge and experience unless they have been subjected to extensive training or have served a form of apprenticeship during which their mentor has passed on their experiences. Even this is insufficient if such training has not included training in systems thinking and methods for developing heightened situation awareness. This is the fundamental reason why, in this book, considerable effort has been directed towards investigating the nature of complex, dynamic and systemic risky situations. It is only when armed with such knowledge can a manager competently navigate through each of the stages of the process. There are two important outputs from the process of establishing the risks. They are:

• Develop criteria— the criteria against which subsequently identified risks will be evaluated are developed. Again the nature and form of these criteria can only be derived from an understanding of the context because the context will determine the priorities for the allocation of managerial, risk-mitigation, efforts. For example, the bare systemic structure identified in the Black Hawk case, Figure 2-6, provides insight into which nodes should become the focus of management efforts. Knowledge and understanding of that structure are essential to the subsequent task of establishing the importance of risks, that is their priorities and, hence, the priorities for their treatment. Senge (1990: 114) explains that the bottom line in systems thinking is leverage, that is, seeing where actions and changes in structures can lead to significant, enduring improvements. Often, leverage, follows the principle of economy of means; where the best results come not from large scale efforts but from small well-focused actions. We use this to help in developing the criteria, which we will use later when we evaluate risks. At this stage, once we have developed the criteria, we set them aside for future recall.
• Decide the structure —once we understand the structure of the risky situation, the activities of identifying what can happen and how it can happen become meaningful. The contextual maps, in whatever form we choose to develop them, become roadmaps and checklists to guide subsequent analysis.