Asking the right, sometimes difficult, questions is a key ingredient of framing. When structuring a large strategic investment decision, it is crucial to understand how risks and uncertainties may affect the investment decision. One useful question to ask stakeholders is: “How could we be wrong?” This requires participants to analyze or otherwise consider the assumptions underlying the decision and explore how the investment might turn out differently than expected. Using a premortem question can also help identify and frame risk factors: Assume it is three years in the future and the capital project has failed, and ask the stakeholder group to create stories that would result in this outcome. It is generally accepted that it’s easier for team members to talk about risk factors in a hypothetical story than to speak critically of the project.
Authors: Charles Alsdorf, Elayne Ko, Igor Heinzer
Source: Deloitte Review
Subject: Decision Making