. . . cause of many losses.
(The polite description!) Assumptions are a constant paradox:
some seemingly trivial ones, can cause catastrophic losses, yet we
have to make them all the time. Are
assumptive losses inevitable? Not
if we keep a few preventive thoughts in mind.
We often make assumptions because information isn't available or we lack the time to get the required data. But overconfidence, ignorance, naïveté, laziness and stupidity can also be factors. Regardless of motive, we end up guessing about outcomes, based on mere perception of the probabilities. And those perceptions can easily be faulty. Assumptions are essentially declarations made, explicitly, implicitly or even subconsciously, without the supporting proof that we would normally demand. They are simplistic and value-laden. And they can be dynamite!
It’s not just this insidiousness that make assumptions risky: they can actually pack three punches in one: first, the consequences of the original faulty assumption; second, the consequences of all subsequent decisions based on the original (flawed) assumption; third, with each additional assumption, we muddy the waters and are less able to establish clear cause and effect. With many permutations and combinations possible, it becomes very difficult to learn from our experiences. Unwittingly, we continue taking risks that we wouldn't knowingly take. This is a hallmark of many big losses.
There are formal techniques for flushing out critical assumptions. Since we don’t have space to cover them here, see a summary at www.cadmus.ca/assumptions.htm
So, how can we protect ourselves from assumptive losses?
(e.g. "How do we really know . . . ")
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Mike Murphy has been a risk management consultant for the last five years. Prior to that, he spent 17 years (78-96) with Transport Canada, his last five as Regional Director General, Aviation in Winnipeg. Originally trained as a professional pilot, he is the author of an internationally acclaimed 500-page report entitled "An Evaluation of Emergency Response Services at Airports in Canada." He is also the Chairman of the Air Passenger Safety Group (APSG), a Director of Transport 2000 Canada, a Director of the Ottawa Chapter of Christian Businessmen's Committee (CBMC) and the Secretary General of the Peugeot Club of North America (PCNA).
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