Tool for Risk Identification, Assessment, & Display (TRIAD)
Overview
Organizations take many actions are taken to reduce risk. However, not all risks can be avoided. To effectively manage risk, managers and regulators must evaluate and compare risks associated with different threats. Yet, it is frequently difficult to obtain reasonable assessments of these risks. Traditional approaches often produce unsatisfactory results when the probability of failure is low but the costs of failure are high. Attempts to use a single dimension to evaluate threats often lead to unreliable and contentious assessments. Many risk assessment heuristics and displays can yield misleading and sometimes mathematically incongruous assessments. Furthermore, increases in costs caused by people’s reactions to failures are often ignored or grossly underestimated. The Tool for Risk Identification, Assessment, and Display (TRIAD) is designed to address these problems.
To effectively manage risk, one must be able to evaluate the risks associated with different threats and compare them. But it is frequently difficult to obtain precise assessments. So, managers often rely on informal “seat-of-the-pants” risk assessment procedures. These are often inaccurate and subject to a variety of common group and individual decision biases. Occasionally, formal probabilistic risk assessment (PRA) methods are used. However, these methods are complex, costly in time and resources, and highly dependent on having precise estimates of the probabilities associated with the various threats and the costs of the potential damages that could accrue. In some cases, this assessment can be accomplished simply and the obtained result matches our intuitions. However, in many cases (e.g., when evaluating the risks associated with a new endeavor) this is impossible. TRIAD charts a “middle way” designed to guide the risk assessment process towards more accurate and reliable assessments than can be achieved by informal methods without the costs and problems associated with PRA. To accurately assess the risk associated with a potential failure or other threat, one must consider the possible outcomes that could occur, the likelihood of each outcome, and the consequences that may be associated with each outcome.
Assessing the risk associated with a possible failure or other event becomes more difficult when: 1) the event of interest (e.g., a failure) can have many possible outcomes, 2) the event under consideration is not repeatable or there is no data from which to directly estimate the probability of the event, 3) the event could lead to different types of damage that cannot be easily measured on a common scale and 4) the cost of the potential damage or the likelihood of the event is extreme. TRIAD addresses all of these issues.
What TRIAD does:
Structures and focuses the assessment process
Accommodates both “hard” data and expert judgment
Goes beyond the “5 X 5” likelihood by consequence risk matrix
Facilitates likelihood judgments using both operations per time (day/week/month/year) and probability estimates
Separates consequence judgments by type of consequence to avoid false equivalences across types
Uses modifiable consequence dimensions (life/health, financial costs, operational disruption, social amplification are standard)
Guides assessment risks of secondary effects due to public reactions to events
Captures and displays uncertainty in likelihood estimates
Allows organization-specific customization
Overall Design
Risk is a function of likelihood and severity of consequences. Assessing risk is a matter of identifying the possible untoward events that could happen, estimating their likelihood, and judging the severity of the possible consequences of each event. Then these must be combined and displayed in a meaningful way. TRIAD leads you through this process and produces several different displays. A central tenet of this approach is to ensure that each component of the process is clearly accessible and that uncertainty as well as “best estimates” are displayed. This allows discussions of risk to be focused on real issues such as determining how likely an event is to occur or what the consequences of the event would be, rather than devolving into a debate over what the ultimate risk estimate “should” be.
Why TRIAD?
Managers, safety officers, engineers, and other individuals charged with making risk assessments often feel that the systems they are asked to use to make those assessments give them too little support. They report that the processes used are too vague, discussions of risks devolve into arguments over risk levels instead of the likelihood and consequence of possible outcomes, and the final results often seem arbitrary.
Sophisticated risk assessment techniques can be used, but the effort and expense required to conduct full-fledged probabilistic risk assessments can rarely be justified under tight budgets for all of the risks that an organization must confront. So risk assessments are often made informally, looking at a “5 X 5” risk matrix.
TRIAD was designed to be a “middle way,” a different approach to risk assessment, that could guide individuals to follow a well-structured transparent assessment process which could be used to make both relatively quick rough assessments and more refined assessment when time permits. Sometimes a quick rough but accurate idea of attendant risks is what is needed to determine whether or not to invest more time, effort, and resources to develop more precise estimates.
Using TRIAD
The TRIAD program is designed to be used by informed individuals with minimal training. Throughout the program, brief descriptions of the components, helpful hints, and context sensitive help can be easily accessed. The program is divided into a set of worksheets. Each worksheet is devoted to a specific component of the assessment process. Although the program is arranged to encourage you to work through the risk assessment sequentially by tasks, in most cases, the order in which you enter information is not constrained. You can work through the process in whatever manner you find most efficient. If you find it necessary to return to a worksheet to change an entry, you can do so and all of the associated entries will be changed automatically.
Adapting TRIAD
Although the general approach to risk assessment embodied in TRIAD will be useful in many domains, for maximum utility the tool should be adapted to your specific domain and operational environment. In particular, the default likelihood values, consequence dimensions, and additional decision criteria included in the tool may need to be adapted to fit the particular circumstances encountered in your domain and operational environment. In addition, to obtain the full benefits of TRIAD and to use the approach efficiently and effectively some training in conducting risk assessments in general and using the TRIAD process in particular is needed.
More Information
For more information regarding TRIAD, to arrange a demonstration, or to discuss consulting with a Decision Research scientist about risk assessment and TRIAD, contact Andrew Quist at andrew@decisionresearch.org.