Latest revision as of 16:56, 10 August 2017

[edit] Rumfeld's unknown unknowns

Former US Secretary of Defense, Donald Rumsfeld has gained some sort of notoriety amongst Risk Managers due to something he said in a news briefing in February 2002 regarding the lack of evidence linking the government of Iraq with the supply of weapons of mass destruction to terrorist groups.

While mr. Rumsfeld most probably was not aware of it, what he said made actually a lot of sense in terms of risk management.

We observe certainty whenever we know exactly what will happen in the future. I have a known causal chain, stable prices, reliable schedules etc. Therefore, given that I know my preferences, I can easily weigh the options with regard to how they fit my preferences and make informed decisions.

Whenever we know, that there are uncertain variables regarding our decisions, we are dealing with uncertainty respectively risk (in case we can put numbers on these uncertain variables). We know that we do not have the full information or cannot fully predict the outcome of a decision, but we are aware of the possible scenarios and the area of risk/uncertainty. So we know, that there are unknowns to our decision equation.

And finally, there is ignorance, when we are not even able to design possible events and scenarios where the outcomes of our decision might deviate from the plan. Although we usually can imagine that something is not going according to plan, it might be very hard to define the actual threats or events that may lead to this deviation from the plan. In that case we are ignorant of the possible – or as Mr. Rumsfeld put it, there are things we do not even know that we do not know.

Although it may seem like decisions in this last case, when there is ignorance of threats and risk events, are not possible, even then informed decisions and risk orientated operations are possible and that we need not to stumble blindfolded towards the unknown." (Stingl, 2016, lecture notes)

Rumfeld's matrix