Robust Decision Making under Deep Uncertainty

Revision as of 11:32, 19 February 2022

Abstract

The uncertainty is highest in the beginning of a project but is also here decisions are made of crucial importance for the project's outcome. The world is constantly changing, making it impossible to make reliable decisions based on prediction of what the future holds. There is a need to move away from prediction of the future to calculating the most robust decisions.

This article describes how to approach decisions under deep uncertainty as a project manager or project stakeholder using robust decision making (RDM). It is a set of methods and tools developed over the last decade, primarily by researchers associated with the RAND Corporation. The article explains the XLRM Matrix for RDM and the Iterative Steps of RDM as well as how to apply these through exemplification.

It is inevitable to encounter uncertainties in projects, but you can do your best to investigate which strategies will perform best under these uncertainties. RDM is an iterative framework that offers a data-based assessment on future scenarios on which stakeholders and decision makers can base their decisions.

Overview

Foundation of RMD

XLRM Matrix

Application of RDM

1. Decision Making

2. Evaluate Strategy across Futures

3. Vulnerability Analysis

4. Tradeoff Analysis

5. New Futures & Strategies

Example of application

Limitations and Challenges