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Evidence-based Problem Solving for Manging Risk

decision making evidence-based problem solving

As a senior manager or risk manager, you face many challenges that can potentially derail important objectives and put your organisation at risk. Whether it’s meeting budgetary constraints, sales targets, or compliance with new laws and regulations, all of these issues can have significant consequences. There are many well known decision making tools available e.g. SWOT analysis, Decision matrix analysis, Pareto analysis and the Ishikawa diagram, However, there is a powerful tool that can help you mitigate these risks and make better decisions – evidence-based problem solving.

What is evidence-based problem solving?

Evidence-based problem solving is an approach that involves using data and research to inform decision-making. It’s a systematic and structured process that allows you to gather information, analyse it, and make informed decisions based on the evidence you have gathered.

The concept of evidence-based problem solving has been around for many years, but it has gained significant prominence in recent decades, particularly in the fields of healthcare, education, and social sciences. Some of the pioneers of evidence-based problem solving include Dr. Archie Cochrane, a Scottish epidemiologist who advocated for the use of randomised controlled trials in medical research, and Dr. David Sackett, a Canadian physician who is often credited with coining the term “evidence-based medicine.”

Since its inception in the medical field, evidence-based problem solving has been applied to a wide range of disciplines, including education, psychology and criminology. In education, for example, evidence-based practices have been used to identify effective teaching strategies and interventions for students with learning disabilities. In criminology, evidence-based practices have been used to develop more effective rehabilitation programs for offenders.

Overall, evidence-based problem solving has become an important tool for decision-makers in a variety of fields, as it allows them to make informed choices based on data and research rather than personal biases or popular opinion.

Using evidence-based problem solving to make better decisions

Let’s take an example of a common problem that many senior managers face – meeting sales targets. This is a critical issue for any business, and failing to meet targets can have severe consequences. One way to approach this problem using evidence-based problem solving would be to:

1. Define the problem: Identify the specific sales targets that are not being met and the reasons for this.

2. Gather evidence: Collect data on customer behaviour, market trends, and competitor activity to understand why sales targets are not being met.

3. Analyse the evidence: Use statistical analysis and other methods to identify patterns and trends in the data and to identify potential causes of the problem.

4. Develop solutions: Based on the evidence, develop a range of solutions that are likely to address the underlying causes of the problem.

5. Evaluate the solutions: Test the solutions in a controlled environment to see if they are effective and if they can be scaled up to the wider organisation.

By using evidence-based problem solving, you can make informed decisions that are based on data and research rather than assumptions or opinions. This approach can help you to reduce bias, identify risks more effectively and to develop strategies to mitigate them.

Application of evidence-based problem solving

Lets look at one example of how a business school used evidence-based problem solving to engage more students and meet an important objective.

The Problem:

Unlocking the power of Microsoft Office Excel is an essential skill for any aspiring professional, but not all students were taking advantage of the opportunity. One Business School offered the Microsoft Office Excel Certification Program as part of their suite of opportunities to improve student employability and career readiness. However, despite the program’s benefits, the majority of students did not completing it. Statistics revealed only 20% of students had completed the Program. Even with a reasonable financial budget, the low participation rates meant the program was not delivering its full value i.e. meeting its objective.

The Approach:

To help resolve the issue, evidence-based problem solving was utilised by the team conducting a thorough analysis of student feedback, program data, and industry trends to identify potential barriers to participation.

One key finding was that many students lacked confidence in their Excel skills and were intimidated by the certification test.  To address this, the team developed a series of optional Excel workshops and tutoring sessions to help students build their skills and confidence before attempting the certification test. Additionally, the team recognised that some students may not have been aware of the benefits of obtaining the certification, such as increased employability and the opportunity to earn experience points.

The team also implemented a targeted marketing campaign that highlighted the benefits of the certification and emphasised the value of including it on a LinkedIn profile.

In summary, through the use of evidence-based problem solving, the team was able to devise a targeted and effective solution to increase participation in the Excel Certification Program. By offering additional support and improving marketing efforts, they encouraged significantly more students to complete the program and enhance their professional skills and employability.

Using evidence-based problem solving to better manage risks

In today’s world, cyber security risks are a major concern for businesses of all sizes. These risks can result in financial losses, damage to reputation, and legal liabilities. Therefore, it is crucial for businesses to adopt a proactive approach to managing cyber security risks. Evidence-based problem solving is one such approach that can help organisations make informed decisions about cyber security risks.

The following are ways in which evidence-based problem solving can be used to manage cyber security risks:

1. Identify the problem: The first step is to identify the specific cyber security risk that needs to be addressed. This could include threats such as malware, phishing, ransomware, or social engineering attacks.

2. Collect evidence: The next step is to gather evidence related to the identified cyber security risk. This could involve analysing past incidents (internal and external), conducting vulnerability assessments, or gathering data from security tools.

3. Analyse the evidence: Once the evidence has been collected, it needs to be analysed to identify patterns and trends. This analysis can help businesses understand the root causes of the cyber security risk and develop effective strategies to mitigate it.

4. Develop solutions: Based on the analysis, businesses can develop evidence-based solutions to manage cyber security risks. These solutions could involve implementing new security measures, training employees on best practices, or developing incident response plans.

5. Test and evaluate: It is important to test the effectiveness of the solutions implemented and evaluate their impact on cyber security risks. This can help businesses refine their strategies and improve their overall security posture.

Evidence-based problem solving can be a valuable tool for managing cyber security risks. By collecting and analysing reliable data and evidence, businesses can make informed decisions and develop effective strategies to mitigate cyber security risks. This approach can help businesses stay ahead of potential threats and protect their assets, reputation, and customers.

This is example is relatively straight forward.  But evidence-based problem solving can be applied at a micro-level problem.  Here is an example.

Using evidence-based problem solving to enhance the risk framework

At one large organisation, we recently conducted a review of the organisations risk management framework.  The organisation had all the components required in the international standard ISO31000 (tick), there was commitment from the governing body and management (tick), there were quarterly risk reviews and risk registers (tick) , they were addressing current operational, strategic, project and emerging risks (tick) – but the underlying risk assessment criteria to support risk decisions wasn’t making sense.

We gathered evidence by looking at a number of reports describing risk implications, various risk assessments and met with a sample of decision makers across the organisation to identify the problem.  We found that the risk criteria used was well out of date, the consequences tables were no longer in line with the organisations strategy and financial and operational capabilities and risk appetite descriptors were hard to understand, interpret and apply.

Limitations of evidence-based problem solving

While evidence-based problem solving is a powerful tool, it’s important to acknowledge that it does have some limitations. For example, it can be time-consuming and resource-intensive, requiring a significant investment of time and money. In addition, there may be situations where data is not available or where it’s difficult to collect meaningful data.

Take aways

As a senior manager or risk manager, you face many challenges, and the consequences of making the wrong decisions can be severe. By using evidence-based problem solving, you can make informed decisions that are based on data and research, and that are more likely to be effective in managing risks and achieving your goals. While this approach does have some limitations, the benefits are clear, and it’s a tool that every manager should have in their toolkit.

Can We Help?

We are here to help strengthen your risk management capabilities, systems and processes.  Our risk management capabilities include:

  • Providing an interim Chief Risk Officer to backfill a vacancy.
  • Providing a dedicated Risk Officer on demand through our Virtual Risk Officer service.
  • Helping organisations take their first steps towards implementing a formal  risk management framework.
  • Performing an independent review of your existing risk management framework to identify gaps and level of maturity.
  • Conducting risk workshops covering strategic, operational and project risks.
  • Conducting risk culture assessments.
  • Supporting you across a range of risk management services including business continuity, crisis management, cyber risk, climate change risk, third party risk and fraud risk.

Take risk management to the next level and contact us to discuss your risk and resilience needs.