Before making far-reaching decisions, you should plan to carry out a risk analysis. Depending on the decision-making situation, you determine the relevant criteria and methods for calculating your company’s consequences.

Risk analysis is a decision-making process. It is particularly necessary for far-reaching decisions that can have serious (negative) consequences for the company. Based on the decision-making process, the form in which a risk analysis should go is shown in this article.

Clarify the decision-making situation

In the first step, you have to clarify your decision-making situation, i.e., describe and delimit it as precisely as possible: What should a decision be made about? You have to think about or agree with the decision-making body on what should be decided. A decision-making situation often arises from specific reasons; there are reasons why to make a decision. Decision analysis services Houston first present and explain answers to these questions. From this, it can come up with what the decision is about. It would help if you also clarify who has to make the decision and which people are involved.

For risk analysis, you have to formulate a decision question – preferably in writing: It includes the following aspects:

Risk analyzes are carried out primarily for decisions that are associated with far-reaching consequences. This can mean that with the decision:

For example, it can be about introducing a new product, establishing a sales company in India, new forms of cooperation and far-reaching change projects, or the acquisition of a new production facility or a company-wide change in IT infrastructure.

Show options for action and alternatives

You can only make a decision if you have different options for action, alternatives, or possible solutions. For instance, you have to work out these and describe and explain them in a concept. The forms for possible alternatives and thus decisions are:

The form in which you work out and present your options for action and alternatives depends on the decision-making situation and the decision-making question. In addition, the explanations should make it clear which consequences and which evaluation criteria could be necessary for the risk analysis from your point of view.

Examples of different options for action are:

Selection of the criteria for the risk analysis

The risk analysis shows which opportunities and risks can decision for an option bring. It can provide important information on how you can improve your solutions and options or what you need to pay special attention to in the implementation to achieve the goals; these are the success factors and the criteria for your risk analysis.

To do this, check which criteria are decisive for how the decision will turn out. How do the decision-makers determine what is a good and what a lousy option for action? The company’s goals can derive from these criteria: If the goal is to increase profits for the company, then the option that promises the highest profit is chosen. If the company is to grow, the preference lies with the courses of action that develop new customer segments. Specifically, this can mean for the risk analysis:

Some decision criteria or parameters are fixed and more or less confident. It is challenging for others to assess what may happen in the future. This is why these “uncertain criteria” are varied within the risk analysis framework; several scenarios play their role.