Opportunity, experience, learning from mistakes and regrets

Opportunity, experience, learning from mistakes and regrets come up in many conversations. Examples generally start with a IF:

• I had known what I know now.
• It would be possible to start over again.
• A second chance would be possible.

It seems like we really firmly believe we can learn from prior mistakes. We can absorb lesson learned and profit from them.

However, there is abundant evidence that is not the case. We tend to repeat patterns, even if we know they bring negative results. Statistics of divorces and criminal recidivism are eloquent and we all know examples of individuals or even corporations displaying “serial-blunder” behavior.

Opportunity, experience, learning from mistakes and regrets

We have written about cognitive and behavioral biases and their impact on risk based strategic and tactical planning. Building the “right” experience and learning from mistakes have to follow disciplined approaches to avoid clouding the problems at stake even more.

We have also recently noted that in general we tend to learn what we should not do and forget about what we should do. That can be a very toxic guide to opportunity selection.

Working with a positive mind-set, i.e. looking at what one should do is way more efficient than listing the multitude of things one should not do. At the end it will minimize regrets while allowing to seize opportunities.

Risk prioritization helps design and planning

That is where focused risk prioritization really helps. If the risk assessment is properly focused it will help its users to understand what really matters and do the right things in a timely and orderly manner.

On the contrary, if the risk assessment lacks definition and thus focus, its users will feel the full impact of the “overwhelming syndrome” and slide back into “old habits”.

Of course, even if we know old habits are bad, they feel comfortable and reassuring: deep inside many prefer to be sure to lose rather than uncertain to win!

That is especially true in a world where “instant solutions” are sought at alarming rate.

Clients ask for solutions, but often step back as soon as they realize that studies are required to deliver them and may be they will have to deliver data they have no time to dig out of their files.

Patience and a little effort will help gaining immense benefits

Riskope’s ORE (Optimum Risk Esimates, ©Oboni Riskope Associates Inc.) constitutes a value-adding exercise insofar it can start where common practices risk approaches stop. It is scalable, drillable, meaning it can:

• grow together with its users,

• expand in areas of particular interest,

• deliver risk data as requested by clients,

• be updated.

Furthermore its structure ensures that users will never waste any effort.

ORE results focus on the right risks because the methodology is sound. Not because of a priori selection and framing bias. ORE will show you the path out of “old habits”.

Stakeholders can agree and adopt Corporate and Social Risk Tolerance thresholds. Furthermore numerous papers concluded that tolerance leads to more focused, justifiable risk prioritization and to a considerable leadership gain.

Any ORE deployment will:

• Identify system’s critical components.
• Use available data from previous designs and risk analyses, as applicable.
• Establish base condition for components.
• Define performance modes in terms of past levels of unsatisfactory performance.
• Calibrate models to experience and available data.
• Model reasonable maintenance and repair scenarios and mitigative alternatives, including of course risk transfers.

Tagged with: cognitive biases, experience, learning from mistakes, Opportunity, risk tolerance

Category: Risk analysis, Risk management, Tolerance/Acceptability