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Operational Risks: Uncertainty of Outcomes

Uni of liverpool

A lot of time and money is spent in assessing operational and organisational risk. What the safe roll-out price is for a particular service, or whether a specific product will require constant reviews. When it comes to investment or expansions, often risks can be quantified in terms of margins, thresholds or financial safety buffers.

But what about those decisions or choices that do not have a clear outcome? When the decision to approve a particular project or a new endeavour carries an uncertainty balance between risk and reward? These decisions can be about grand announcements for new government policies or bold investment ventures into a new untested area. These are all so-called ‘wicked problems’, which carry with them a higher degree of uncertainty, regarding the necessary processes required to achieve the desired outcome.

What are the stresses and pressures that affect the individual decision makers or teams, and how are these reflected in their ability to assess the uncertainty and ambiguity effectively? Further, what structures and processes are in place within an organisation in order to identify and addresses these affecting factors? And can these ever be fully countered or minimised?

It is important to understand how high-stakes and ambiguous environments affect traditional decision-making processes, and how they can affect strategies and procedures within an organisation. 

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