Risk and uncertainty

Visualising cause and effect in risk management

The other day I came across an interesting collection of visualistions around risk and uncertainty. It was produced by Nico Lategen as a demonstration, and his example was Brexit. (Clearly a favourite topic for those of us interested in uncertainty.)

Initially my interest was around his scale representing sovereignty. This reflects what I’ve written about before, that there is very little that’s black and white, and most things are a grey scale. He demonstrated this with sovereignty, and suggested not just that that topic wasn’t binary, but that both the Leave and Remain supporters are rather closer than they might think. In particular “no sovereignty” is when a region is entirely annexed by another—as is Crimea today by Russia—and total sovereignty is when there are no dependencies at all with foreign states—which is very close to North Korea. Considering those two extremes, the Leave and Remain are rather cosily close.

But of much greater interest was the diagrams showing cause and effect linked by arrows. This is a very simple concept, but also very useful. For example, when we refer to a “risk event” are we talking about an event which might cause an undesirable outcome, or a potential undesirable outcome itself? Or are we talking about the whole… or something else? By visualing the cause and effect we can point easily to the thing we mean, and recognise what we aren’t including.

Cause and effect visualisations are also a very good alternative to risk lists, especially considering that when we have a large number of uncertainties they are almost certainly inter-connected—something that wouldn’t be shown in a risk list.

Nico’s visualisations are also rather close to (but not the same as) stock and flow diagrams in system dynamics. These show boxes of “stocks”, which are quantities of things, linked by “flows”, which allow the quantities to move from one stock to another. I wonder how much closer his diagrams could be made to system dynamics diagrams. For example, in his diagram the European Court of Justice is a threat to sovereignty (a unit in itself) which in turn impacts Euratom and the chemical industry’s REACH regulations:

I rather suspect sovereignty is a more abstract concept which is an aggregation of several things, rather than something in its own right.

There are clearly lots of ideas to play with. What I’m most pleased with is that someone is demonstrating a more constructive way of showing the inter-connectedness of different areas of uncertainty. There is a huge amount of potential here.

Photo by Julz

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