How precise is your company's evaluation of risk?Getting more precise
Doug Hubbard of Hubbard Decision Research offers the following advice to beef up risk-assessment systems:
1. Remove ambiguity. Instead of rating "technology risk" on a scale of 1 to 5, drill in on the variables. Is there a chance the vendor won't be around to support the software in two years? Could implementation costs exceed the approved budget?
2. Bet on it. Pretend your risks are tied to hard-money wagers. People are better at assessing odds when dollars are involved, even if it's a simulated exercise.
3. Study past forecasts. Work from historical numbers, not memory. People remember when they're right, not when they're wrong, which leads to overconfidence. Reviewing actual track records will temper that.
4. Find the experts. Recruit the statisticians in your company—actuaries, ratings specialists, market-analysis experts—who are already trained to do sophisticated statistical analysis.
Tools: Quizzes 
