Decision Quality Frustration Scenario 6

There is so much uncertainty that we end up ignoring it. We make arbitrary assumptions and look at just the downside or just the upside.

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  • Leads to

    • Poor decisions that ignore major risks and opportunities. Company is blind-sided by foreseeable futures.

    Possible Causes

    • Management is uncomfortable with uncertainty and demands unrealistic "certainty" from analysts. Analysts lack understanding and tools to quantify, calculate, and explain uncertainties.

    Potential Solution

    • Identify key uncertainties, including risks and opportunities. Explore multiple scenarios. Hire or train analysts who can address uncertainty using probabilities. Adopt software tools that support decision trees and simulation to analyze and communicate uncertainties. Identify robust alternatives.
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