Risk and Decision: The ‘When’ rather than the ‘How’ (Olav Maassen)

Abstract

While HOW to make decisions is important, the WHEN to make decisions is critical to your chances of success. Olav and Chris present Real Options, an approach they have been working on since 2006 that focuses on the “When” rather than the “How” of decision making. Timing is everything, however deferring commitments causes stress to many people. Real options helps you manage that stress by creating bounded uncertainty in an context of total uncertainty. This is not a simple process that you copy and learn to adopt through practice. This is a new way at looking at the world around you that starts by learning to differentiate between options and commitments. Olav and Chris help do this through an interactive exercise. It turns out that the way you manage your options is to focus on commitments and attempt to avoid or defer them. After identifying commitments, Olav and Chris discuss creating options to turn the commitments into reversible commitments. Olav and Chris have recently creating “Commitment”, the first graphic business novel about managing project risk. Because they eat their own dog food Real Options plays a big part in the creation part of the book as well. They present the creation process as a case study about applying Real Options and how that leads to different behavior. Finally they present a number of mini case studies where other people have applied Real Option thinking in “out of the box” situations. Once you get it, it will change your life.

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