CRYSTAL BALL ARTICLE

Selling Risk Analysis to Management

Make managers aware that decisions based only on intuition can have dangerous consequences.

Risk analysis is like the proverbial good news and bad news joke. The bad news is that business, science, engineering -- and life itself for that matter -- are fraught with uncertainty. The good news is that there are excellent tools like Crystal Ball available to help analyze and forecast risk, but how do you communicate the benefits of these products to management?

Any good salesperson will tell you the most effective tactic is not simply to state a problem but to offer a solution at the same time. "You need to make managers aware of the danger of basing decision on the gut feel and intuition," says Will Ozier of the International Risk Analysis Advisory Group. "Once you've done that you can then offer risk analysis as a realistic solution."

Hands-On Likely to Yield Success

Customized presentations that address specific needs have worked for Robert Eskew, a management professor at Purdue University. Management should be shown how to interpret an income statement using risk analysis. This lets them see exactly how that income statement will be affected by a number of variables.

Group participation has been a useful approach for Robin Simpson of Federal Express. "The way to go is through quality circle action teams," he says. "Such teams are groups of employees that brainstorm on different product ideas. The best people to contact in such instances are engineers. They are the prime source of contact because they often serve as consultants for the quality action team. They will keep decision support products as part of their tool kit."

While the people we've quoted above come from different fields they have several things in common. They're all Crystal Ball users and they have all successfully sold risk analysis to others. But their methods vary in different situations and so should yours. So keep a few important points in mind before you begin.

State risk analysis as a solution to specific problems.

Stress the benefits of risk analysis
Use a hands-on approach
Sell to the right people