Before choosing a problem to solve or a solution to use, it is vital to first survey the entire landscape of assets and risks.
Assessment enables us to notice and choose issues that actually matter. Skipping assessment ("problem-centric" or "solution-centric" approaches, below) is one of the most common and most harmfully negligent mistakes. For example, our current world situation (and thereby our effects on future generations) is so poorly known that we lack any comprehensive understanding of what we have lost, how fast we are losing it, or how to measure risks to future life.
A comprehensive assessment not only lists the assets and risks of which we are already aware, but makes a reasonable effort to discover unknown ones, as well as develops our models of the assets and risks to the point that we have an objective method for assigning scores that are more reliable than subjective opinions (although, as usual, the interpretations of these scores must be used within an understanding of the limitations of the underlying model).
Problem-centric and solution-centric approaches
A common mistake during risk management is to pick a problem that obviously needs to be solved, and then set out to solve it. This is called the "problem-centric approach." A related mistake is the "solution-centric approach," which is to become dedicated to one solution. There are two main drawbacks of these approaches:
- the opportunity cost: the effort could have gone towards identifying and pursuing more important issues
- unforeseen or ignored consequences: e.g. in a bigger picture, some problems are not really problems; some solutions create more problems than they solve (solving near-term problems at the expense of the future is a classic example of this)
Reduction of flexibility and justification of choices
In addition, becoming dedicated to a solution or problem can reduce our flexibility. It can be difficult to accept information that our cherished problem or solution is not worth our time, or that our cherished mental models (about the problem or solution) are ineffective.
Problem- or solution-centric approaches encourage the use of information to justify
the priority of our favored problem or solution, instead of using that information to create a more accurate picture of the world. This tendency can directly undermine assessment.
Ignoring problems we cannot handle
An even more pernicious consequence of a problem- or solution-centric approach is the tendency to ignore any information if we cannot do anything about it, creating a distorted picture of reality.
The Space Shuttle Columbia disaster is a classic example. Assessment of potential damage caused by foam debris was curtailed because "It's not really a factor during the flight because there isn't much we can do about it.
The correct sequence for risk and asset management
To avoid overlooking the most crucial issues to the future, the correct approach towards risk management is to integrate it with asset management:
- assess assets and risks — both those that already exist, and those which are potential. Enumerate problem definitions
- explore possible responses — enumerate the various solutions and their impacts on assets and risks
- choose the most sensible options — assign priorities to these possible solutions. This is a more complex task than a simple ranking, because they interact with each other, and near-term results may need to be sacrificed for long-term concerns. For example, capacity building (which increases assets) may even be preliminary to dealing with urgent risks.
- perform the most urgent or important actions