Managing Risk and Performance: A Guide for Government Decision Makers

Chapter 5

Creating and Keeping Your Options Open—It's Fundamental

Brian Barnier

Principal, ValueBridge Advisors, LLC

As a public health program manager responsible for protecting people from influenza, you know the mission objective is to reduce the cases of flu by severity category (including death). You also know that effective flu vaccines are a guess, made months in advance of knowing the flu strains the following season, effectiveness will degrade as the flu strains change during the season, and not everyone (by risk group) will get a flu shot and at the best time. What do you do?

As a regulator responsible for goals of both safe and sound banks and economic growth, you know that detailed objectives (e.g., exact level of earnings, loans, or growth rates) have trade-offs. Further, the system in which banks work is rather unclear, and regulatory actions (such as capital modeling) have led to many complicating side effects in economic and bank health. What do you do?

This chapter illustrates a five-step approach to help leaders manage risk to mission. This includes: categorizing the uncertainty,¹ clarifying the cause, creating options, focusing or spreading the use of those options, and iterating improvements.

The Real World Is Rarely Simple and Stable

For government program managers, it would be ideal if policy goals and more specific objectives were completely clear; the environment in which to achieve those objectives was well known, simple, and stable; and the capabilities ...