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Manage Complexity

We can't help that risks arise intrinsically from complexity, but we can help you build an organization that can prevent and manage them.

We teach firms to identify those risks and to deploy organizational practices designed to increase Organizational Risk Capacity--the ability to manage systemic risk and avoid the cognitive biases and institutional failures that can be found in the aftermath of many catastrophes.

By increasing Organizational Risk Capacity, firms improve their approach to risk even as their operations become more complex. In addition to the benefits of robustness, this capacity allows for more agile operations in complex environments and encourages innovation within complex processes, conferring a strategic advantage.


Build Organizational Risk Capacity to Manage Complexity

  1. Conduct risk assessments on a process or system
    1. Use structured protocols to assess systemic robustness
    2. Identify and address potential risks, intolerance, illusory redundancy, and unexpected potential interactions
  2. Provide Cognitive Organizational Coaching
    1. Deliver training focused on overcoming cognitive and organizational biases that make it hard to think properly about risk
    2. Provide tools to promote communication and skepticism
      1. Train employees to provide constructive skepticism
      2. Train managers to accept and facilitate holistic communication that encourages both the positive and skeptical flow of information
    3. Assess critical metrics like employee voice and psychological safety
  3. Tailor Near-miss analysis to your organizational needs
    1. Deploy a platform to record, track, and learn from valuable near-misses — when something could have gone wrong but did not.
    2. Integrate with Cognitive Organizational Coaching
  4. Conduct post-incident decision analysis
    1. Facilitate organizational learning when an unexpected event has occurred
    2. Investigate the technical facts and failure modes behind an incident
    3. Assess incident decision-making and communication

Understand Risks

It might not always be clear to your organization how understanding risks leads to effective strategy formation. Let us help you.

From foreign exchange volatility to the due diligence required of an investment or acquisition target, risk permeates business. System Logic teaches organizations how to integrate risk-based thinking with the challenges of strategic decision making. For example, by identifying the natural risks your firm owns and acknowledging and hedging other risks, organizations increase their competitive advantage and resiliency to unexpected shocks.

Managing complex projects and making decisions that yield consistently good results requires cognitive awareness and organizational structures that acknowledge biases and continually evaluate the divergence between predictions and outcomes.


Explore the Relationship Between Strategy and Risk

  1. Identify how risks integrate with strategic decision making
    1. Identify the natural risks--those that give you a competitive advantage--your firm owns
    2. Develop a strategy for acknowledging and hedging your external risks (e.g., energy costs, foreign exchange volatility)
    3. Develop a better metric for investment decisions.
      1. Traditional ROI calculations don’t properly capture low probability catastrophic events.
      2. Our external perspective supplements your quantitative models with Risk-Aware ROI
  2. Provide Cognitive Organizational Coaching
    1. Deliver training focused on overcoming cognitive and organizational biases that make it hard to think properly about risk
    2. Provide tools to promote communication and skepticism
      1. Train employees to provide constructive skepticism
      2. Train managers to accept and facilitate holistic communication that encourages both the positive and skeptical flow of information
    3. Assess critical metrics like employee voice and psychological safety
  3. Facilitate decision-tracking and analysis
    1. Deploy a platform to track decisions and the prior expected outcomes
    2. Only by recording predictions can one audit the actual outcome against our expectations[1]
  4. Identify the risks of an investment, acquisition target, or key business partner
    1. Provide training on organizational risk assessment for due diligence
    2. We also offer risk-based due diligence solutions
[1]  See, e.g., Roger L. Martin on The Opposable Mind: How Successful Leaders Win Through Integrative Thinking

Build Resiliency

Resilient organizations mitigate adverse consequences and transform uncertainties into opportunity. We can help you build resiliency.

The seizure of credit markets, a supply-chain failure, or a natural disaster can bring even the most competent and well-run business to a halt. As the world becomes increasingly complex, these disruptions occur more frequently and in an environment of tightly interconnected financial, transportation, and infrastructure systems. Furthermore, the drive to innovate, achieve greater efficiency, and meet the demands of customers and clients means that organizations have less of a buffer when disruptions occur. In short, today’s companies face increasing demands in an increasingly uncertain environment.

Our goal is to help organizations increase Robustness--the ability to withstand shocks and continue operating--thereby mitigating the adverse consequences of today’s increasingly risky world. Beyond mitigation, a resilient organization transforms these uncertainties into a strategic advantage by minimizing downtime and offering robustness as a selling point to partners, consumers, and suppliers.


Build Effective Resiliency

  1. Identify key risks and your firm’s ability to withstand shocks
    1. Combine our knowledge of hazard with your organization’s leaders to identify critical people, systems, and processes
  2. Provide Cognitive Organizational Coaching
    1. Embed skepticism in the organization
    2. Provide training to highlight common organizational errors like the production of fantasy documents —hyper-idealized and unrealistic plans developed then promptly forgotten about
    3. Train employees to provide constructive skepticism
  3. Nurture a robust and realistic contingency stance
    1. Avoid illusory redundancy—where a redundant component is unexpectedly vulnerable to the risk against which is intended to protect
  4. Craft scenario-based training
    1. Realistically test your organization’s true risk readiness
    2. Practice decision making under simulated emergency conditions
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