Guest Post by David Parishkoff (first posted on CERM ® RISK INSIGHTS – reposted here with permission)
If Knowledge is Power, then understanding the cascading factors that shape our destiny can potentially offer Disruptive Knowledge and Decisive Power. Cascade Effect Thinking (CET) is a new paradigm that dynamically discovers the truth about interacting threats and opportunities in unique, analytical and gamified ways.
What is Cascade Effect Thinking?
CET is a rigorous, analytical approach and tool set to identify, quantify, and mitigate cascading internal and external organizational risk factors. CET uses gamified analytics to identify pre-crisis (not post-crisis) cascading threats that can lead to unfavorable events. It solicits candid and anonymous inputs from all organizational levels – leadership, mid-management and non-management (triangulation). CET exposes systemic risks and best practices in an organization’s decisions, culture, processes, responses to critical situations and feedback loops. CET applies standard systemic risk assessment criteria within 40 families of patent pending and gamified analysis techniques.
We Never Saw It Coming
Too often, we misdiagnose tipping points and underestimate the collective effects of multiple triggers. We can’t see the slow accumulation of interacting threats can build up exponential levels of energy. This was the case with the 2007-09 housing bubble burst that triggered a global financial and economic meltdown. When these bubbles burst, we tend to blame the last straw that broke the camel’s back. We ignore the bad decisions and risky actions in the recent and distant past that set the stage for a calamity of epic proportions.
CET post mortem analysis of the financial crisis identified 8 different threat cascades that were individually considered as harmless, or at-best, a nuisance. However, collectively, these cascades had exponential destructive effects.
CET has helped many companies identify and transform hidden threats and root causes into massive competitive advantages.
Examples of where CET techniques including gamified process analysis have been successfully applied:
- War Game Facilitation at the Pentagon
- Product recall mitigation for a global beverage company
- To identify millions in savings for a Florida Hospital group
- Bankruptcy avoidance and business transformation for an automotive dealership
- Saved $38 million at a major Copper smelting operation
- To avoid the cancelation of a several hundred-million-dollar contract at an electronics supplier
- To diffuse disagreements between the owner of a large retail store and the management team
- To develop corrective actions for a failing Lean Six Sigma program at a major Aerospace company
- Identification of redundancies, inefficiencies and lack of communications across 24 different health plans in a health insurance company
Benefits of CET
- Improved observational resolution and clarity
- Identifies, assesses and reconciles the conflict between positive and negative chain reactions
- Ability to transform cascading threats into disruptive innovations
- Maximizes employee engagement and empowerment
- Provides leadership with an “early-warning” system
In a series of future articles in CERM Risk Insights, we will explore many facets of Cascade Effect Thinking and demonstrate how it can significantly improve and even disrupt many popular risk management and leadership paradigms.
David Patrishkoff is President of E3 – Extreme Enterprise Efficiency® and the Founder of The Institute for Cascade Effect Research®. He is a Lean Six Sigma Master Black Belt and the inventor of a Cascading Risk Management Methodology. Prior to starting his consultancy in 2001, David held many worldwide senior executive positions in the automotive and trucking industry. Author email: David.Patrishkoff@CascadeEffects.com