Finally, consolidate the results by adding up the total of all the values for each of the options. You may want to convert these values into a percentage of the total score. Example: As a simple example, an entrepreneur is looking at ways in she can expand her business. She has limited resources, but also has the options she lists below: Expand into overseas markets Expand in home markets Improve customer service Improve quality Firstly she draws up the Paired Comparison Analysis table in Figure 1: Figure 1: Example Paired Comparison Analysis Table (not filled in): Overseas Market (A) Home Market (B) Customer Service (C) Quality (D) Overseas Market (A) Blocked Out (Step 3) Home Market (B) Blocked Out (Step 4) Blocked Out (Step 3) Customer Service (C) Blocked Out (Step 4) Blocked Out (Step 4) Blocked Out (Step 3) Quality (D) Blocked Out (Step 4) Blocked Out (Step 4) Blocked Out (Step 4) Blocked Out (Step 3) Then she compares options, writes down the letter of the most important option, and scores their difference in importance. An example of how she might do this is shown in figure 2: Figure 2: Example Paired Comparison Analysis Table (filled in): Overseas Market (A) Home Market (B) Customer Service (C) Quality (D) Overseas Market (A) A,2 C,1 A,1 Home Market (B) C,1 B,1
meetings. When running into difficulties because ideas are running dry, they may direct activity into Green Hat thinking. When contingency plans are needed, they will ask for Black Hat thinking, and so on. You can use Six Thinking Hats in meetings or on your own. In meetings it has the benefit of defusing the disagreements that can happen when people with different thinking styles discuss the same problem. A similar approach is to look at problems from the point of view of different professionals (e.g. doctors, architects, sales directors) or different customers. Example: The directors of a property company are looking at whether they should construct a new office building. The economy is well, and the amount of vacant office space is reducing sharply. As part of their decision they decide to use the 6 Thinking Hats technique during a planning meeting. Looking at the problem with the White Hat, they analyze the data they have. They examine the trend in vacant office space, which shows a sharp reduction. They anticipate that by the time the office block would be completed, that there will be a severe shortage of office space. Current government projections show steady economic growth for at least the construction period. With Red Hat thinking, some of the directors think the proposed building looks quite ugly. While it would be highly cost-effective, they worry that people would not like to work in it. When they think with the Black Hat, they worry that government projections may be wrong. The economy may be about to enter a 'cyclical downturn', in which case the office building may be empty for a long time. If the building is not attractive, then companies will choose to work in another better-looking building at the same rent. With the Yellow Hat, however, if the economy up and their projections are correct, the company stands to make a great deal of money. If they are lucky, maybe they could sell the building before the next downturn, or rent to tenants on long-term leases that will last through any recession. With Hat thinking they consider whether they should change the design to make the building more pleasant. Perhaps they could build prestige offices that people would want to rent in any economic climate. Alternatively, maybe they should invest the money in the short term to buy up property at a low cost when a recession comes.
should you pay maximum attention to a risk that has a 51% probability of occurring, with a loss of 51% of maximum loss? Tip 2: In some industries, you need to pay close attention to even very unlikely risks, where these risks involve injury or loss of human life, for example. Make sure you pay due attention to these risks. To use the Risk Impact/Probability Chart, print this free , and then follow these steps: List all of the likely risks that your project faces. Make the list as comprehensive as possible. Assess the probability of each risk occurring, and assign it a rating. For example, you could use a scale of 1 to 10. Assign a score of 1 when a risk is extremely unlikely to occur, and use a score of 10 when the risk is extremely likely to occur. Estimate the impact on the project if the risk occurs. Again, do this for each and every risk on your list. Using your 1-10 scale, assign it a 1 for little impact and a 10 for a huge, catastrophic impact. Map out the ratings on the Risk Impact/Probability Chart. Develop a response to each risk, according to its position in the chart. Remember, risks in the bottom left corner can often be ignored, while those in the top right corner need a great deal of time and attention. Read for detailed strategies on developing a risk response plan. Key Points To successfully implement a project, you must identify and focus your attention on middle and high-priority risks - otherwise you risk spreading your efforts too thinly, and you'll waste resources on unnecessary risk management. With the Risk Impact/Probability Chart, you map out each risk - and its position determines its priority. High-probability/high-impact risks are the most critical, and you should put a great deal of effort into managing these. The low-probability/high-impact risks and risks are next in priority, though you may want to adopt different strategies for each. Low-probability/low-impact risks can often be ignored.