Presentation made at the 4th Workshop on Strategic Crisis Management (Paris, 28-29 May 2015). For more information, visit the meeting webpage: http://www.oecd.org/gov/risk/4th-workshop-strategic-crisis-management.htm.

1. Strategic Warning and Risk Analysis
Concepts
Ken Knight
kenknight2@cox.net
703-220-8445

2. What is Warning?
The Dictionary definition:
• An alert prior to a threatening act,
event, or behavior
2
In practical terms, that means:
• Productive, continuing interaction with decision-makers …
actionable foresight … enabling better decisions, broader
options, increased resiliency
— Shape outcomes to achieve objectives
— Prepare for outcomes that cannot be fully shaped
— Mitigate impacts of outcomes that cannot be fully
prepared for
— Avoid Complete Surprise (the enemy is at the gate)
!
!
Strategic
Tactical

3. Common Causes of Surprise
• Deliberate hostile actions
• System shocks
• Under-estimating or mis-
estimating trend implications
• Confusing assumptions and
uncertainties
• Not recognizing complex
linkages
• Technological/operational
changes
• Natural events

4. Enduring Challenges
• A tough business, even under the best circumstances
– complex issues, set in the future, significant uncertainties, high stakes
• Defining your mission
• Maintaining the mindset
• Training, time, resources
• Product/output
4
• Finding the right place to
‘plug in’
• Success metrics
• ‘3 Bears’ expectations
• Not wanting to be wrong

5. Temptation to Warn of Everything …
5
… Or Report Anything

6. Common Pitfalls
• Consensus cultures (don’t rock the boat)
• Functional specialization (experts rule)
• Integration (old/new, regional/functional, etc.)
• Imagination (that hasn’t happened before)
• Mirror imaging (they’ll do what we would do)
• Perception biases/pattern matching (seeing what we
expect to see)
6
• Inappropriate analogies (true
before, so true again)
• Depending too much on the
information we have
• Ego (You can’t fool me)
• Negativity bias … remembering
the bad more than the good
• Holding on to entrenched beliefs

7. Not Possible to Completely Eliminate Surprise
7

8. But We Can Improve the Odds
• Conscious, deliberate, systematic efforts … not just
the by-product of daily activity
• 3-dimensional capabilities
– Rapid detection for rapid response
– Persistent surveillance of known threats
– Strategic reconnaissance of emerging issues
8
• Extensive collaboration and engagement
… well beyond ‘your team’
• Energizing and focusing the entire enterprise
• Specific training and tradecraft
• Senior leader endorsement (‘partnership’ with analytic
organizations)

9. Warning System Essentials
• Understanding and articulating
‘normal’
– Patterns, developments,
conditions, behaviors, actions,
etc. that define the ‘steady state’
• Being able to recognize
important deviations
– Sources, metrics, analytic
criteria, etc. that help you detect
significant change
• Knowing when (and when not)
to warn
– Reporting thresholds … how far
away from ‘normal’ before you
tell somebody 9
Normal
Elevated
Significant
Concern
Critical

10. Elements of a Systematic Process
• Continuous effort to identify
existing and anticipate emerging
threats
• Conscious evaluation of
likelihood, impact, capacity to
leverage/influence key factors
10
• Consistent monitoring of critical factors
impacting the warning/risk/opportunity event
• Regular communication with leadership and
other stakeholders
• Generate, evaluate mitigation options?

11. Evaluating Risks
• Should include:
– Clear articulation of the risk/warning
event
– Examination of how it could ‘plausibly’
materialize
– Likelihood that it will occur within
specified timeframe (with confidence
statement)
• Problematic, but maybe most important
– Potential impact should it materialize
• Not strictly an analyst function
• Nature of the threat/risk and our
exposure/vulnerability
• Local, regional, enterprise implications
– Potential points of leverage/influence
– Follow-on actions
– Critical uncertainties; emerging topics
– Potential for additional warning
11

12. Probability Assessment
• Beware of the usual pitfalls
– Availability … Anchoring … Overconfidence
• Many approaches, none fool-proof
– Quantitative Methods – probability theory,
descriptive and inferential statistics, statistical
modeling … when you have the data
– Expert Judgment – individual experts or groups of
experts assess likelihood based on available
information and their experience
12
– Timeline/Indicator – probability is assessed according to the gap between
detected/expected threat/risk activity levels
– Alternative Analyses (ACH) – specifically examining alternative scenarios/
hypotheses; matching those to existing evidence
– Drivers-Constraints – probability is assessed according to the relative number,
strength, and weight of individual factors that would make the risk more or less
likely to occur
– Decision Games – probabilities assessed using iterative models of stakeholder
decision-making

13. Impact Assessment
• Expert analysis of potential impact on
strategic interests should risk materialize
– How does the event itself affect our interests?
– How is (are) the issue, place, region, world, our
interests different in the aftermath?
• Combines threat characteristics and
institutional vulnerability/exposure
• Can be relatively simple and subjective …
– High, Medium, Low
13
• … Or more complex and quantitative
– Weighted values, algorithms, models, numeric scoring
• Requires clear, understandable ranking values

14. Assessing Analytic Confidence
• Complexity
• Information
• Analytic Expertise
• Plausible
Alternatives
• Time
14

15. The Ideal Analytic Output
• Timely
– Detects the earliest signs
– Within customer timelines and processes
• Credible
– Uncertainties, gaps, assumptions and confidence are transparent
– Considers and examines plausible alternatives
– Convincingly delivered (sound, concise, tailored)
• Actionable
– Evaluates impact (the event) and implications (aftermath)
– Addresses context, direction, speed, completeness
– Anticipates (posits) next steps … and potential triggers?
– Identifies potential points of leverage/influence
– Assesses potential for additional warning
15

16. Many Different Methodologies
Evidence-Based
• Timeline-Indicators
• Trend Analysis
• Modeling
• Simulations
• Drivers-Constraints
• Backcasting
• Scenarios
• Visioning
• Structured Games and Workshops
• Brainstorming
Possibilities-Based
• Analysis of Competing Hypotheses
• Deception Assessment
• Devil’s Advocacy
• ‘What If’ Assessments
• Team A/Team B
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Others
• Challenging Assumptions
• Horizon Scanning
• Red Teams
• Delphi
• Wild Card Assessments
• Expert Surveys

17. Matching Methodologies to Problems
• Where is the issue on the analytic continuum (known? …
knowable? … complex? … chaotic?)
• What information would you like to have to address your
issue with high confidence? How does that compare with
the information you have or are likely to get?
• Who is your primary intended consumer? What is his/her
decision ‘space’ … time horizon … risk tolerance?
17
• How much time do you have?
• How do you plan to deal
(explicitly) with uncertainty?
• What is the best (or most likely)
method of conveyance?
• What methodologies are most
appropriate to your issue?

18. 5 Useful Things to Have in Place
• Structured analytic approaches tailored to
the problem
18
• Comprehensive
information strategies
• Communities of interest
effectively linking
stakeholders
• Regular dialogue with
customers
• Designated analytic leads

19. Challenging Expert Thinking
• What is the likelihood of XX … in XX
timeframe?
• Why do you think that? (assumptions,
evidence, rationale, uncertainties)
• How confident are you in your assessment?
• Does anyone disagree with you? … What is
their argument?
19
• How recent is your most critical information?
• Has your assessment changed over time?
• What is the ‘newest’ big thing you have had to factor in?
• What evidence or developments would change your assessment?
• What would you most like to know that you don’t?
• How are you most likely to be wrong?
• What are the implications of your being wrong?
• When was the last time you were wrong?

20. Communicating Warning
• Detailed, iterative
interactions with leadership
20
• Risk assessments, not
predictions
• Partnership throughout
the process
• Use any surrogate access
• Trust trumps most everything else
• What you (and they) know, don’t know, think
• Work hard to make this a productive relationship

21. Not So Easy to Get Right
Assuming you see it coming …
• The audience is pre-occupied … they might not be receptive
• They have biases too … and other sources of information
• You’re asking them to embrace a major discontinuity … potential
harm … that may never materialize … a very tough sell
• Your case may rest more on rational possibilities than evidence
• You hope to leave them worried (thanks!) … they may just be
complacent … or angry
• They expect you to get it ‘just right’ … not too early or too late
21
• Other experts disagree … they may try to
push you toward consensus
• An ounce of prevention is hard to measure
• Nobody, especially you, wants to be wrong
• ‘Crying Sheep’

22. So …
22
You will need to be:
• Thoughtful
• Deliberate
• Calculating
• Persistent
• Tough-minded
• Persuasive
• Creative

23. What Does Your Decision-Maker Need?
• What would you most like to know if you could
know anything?
• What is your definition (strategic vision) of
success?
• What are the top several things you most want
to accomplish? … most need to avoid?
• What are your biggest concerns/fears?
23
• What are the dangers of not achieving your vision?
• What needs to change in order for you to be successful?
• What developments (successes and failures) over the recent past
are most instructive?
• What must be done now/next (the top priority first step)?
• What one thing would you do if you could do anything?

24. Deciding When to Warn?
• Likelihood and Impact
• Are we approaching a
threshold?
• Do other analysts share
my concern?
• Is the policy community
aware?
24
• How long has it been since we last engaged?
• Are other narratives overly optimistic?
• Has the risk narrative been fragmented?

25. Questions to Consider
• What is the critical information
I must convey … in initial and
subsequent interactions?
• What factors are causing me
concern … how do I track and
measure them?
• Who is my audience?
25
• What are the principal obstacles to my effectively communicating
this warning?
• What if I am not successful?
• What opportunities/advantages do I have?
• What is my most likely/effective means of conveyance?
• What questions can I anticipate?
• What are the main counter arguments?

26. A Useful Writing Style
26
•Chapeau paragraph
provides ‘bottom
line’ assessments
•Bulleted sub-
paragraphs provide
supporting evidence
•Examples can be
found at:
http://www.dni.gov
/index.php/about/or
ganization/national-
intelligence-council-
nic-publications

27. Stop Light Charts
27
Indicator Status
Normal Elevated Significant
Concern
Critical
C2 Garrison Status Two Strategic CPs
Deployed
3-4 Strategic CPs
Deployed
More Than 4 Strategic
CPs Deployed
Logistics Stocks in Depots Local Depots Out-
Loaded
Regional Depots
Out-Loaded
National Depots Out-
Loaded
Maneuver
Forces
Garrison Status 20-25% Out of
Garrison
25-50% Out of
Garrison
More than 50% Out of
Garrison
Strategic
Forces
Deterrent Status 25% in Ready
Status
More than 25% in
Ready Status
Fully Mobilized and
Dispersed
Civil Defense Peacetime Status Reserve-Ready
Status
Reserve Call-up
Underway
Full Mobilization
National
Reserves
Peacetime Status Single Sector
Mobilization
Multiple Sector
Mobilization
Full Mobilization
• Nuanced perspective on a dynamic, evolving situation
• ‘Proof’ that something larger is not yet taking shape
• Inspires confidence

28. Indicator Charts
28
Indicator
Status
15 Aug 12
Status
15 Sep 12 Direction
Alawi Cohesion (Overall Assessment)
Additional attacks on senior leadership
Key security elements unwilling to act
Desertions/defections among Alawi leadership or rank and file
Redeployment to Alawi heartland
Non-elite Alawi opposition to Assad
Evidence of palace coup/attempt (arrests, purges, etc.)
Military/ Security Service/Key Leader Loyalty (Overall Assessment)
Desertion/defections
Recruitment (conscription numbers)
Casualties
Unwillingness to act
Coup/attempt (arrests of officers)
Military/Security Service Effectiveness (Overall Assessment)
Declining effectiveness of key units
Shortages (numbers, arms, equipment)
Logistics shortfalls impacting operations
Capacity to seize/hold territory
Capacity to project forces anywhere
Dependence on militias
Opposition Effectiveness (Overall Assessment)
Numbers (recruits, arms, operations, etc.)
Reducing capabilities gap in relationship to regime forces
Clear structure/command and control
Capacity to repel regime offensive operations
Improved coordination
Geographic scope of ops
Intelligence capacity
Capacity to establish safe-havens
Assad’s Perspective/Outlook (Overall Assessment)
Public profile
Visible signs of strain/isolation
Family posture

29. Integrated Risk Plots
I
M
P
A
C
T
Lower L I K E L I H O O D Higher
Iran Nuclear
Surprise
WMD
Terror
Attack
Israel-Iran
Reversal in
Afghanistan
Sudan
Violence
Major Cyber
Attack
NK Minor
Provocation
NK Instability
Escalating
Mexican Drug
Violence
US-PRC
military
event
I-P Conflict
Pakistan
Instability
Lebanon
Crisis
Reversal
In Iraq
Russia-
Georgia
Saudi
Instability
Egypt
Instability
Yemen
Collapse
Haiti
Instability
911-like
Terror Attack
China-
Taiwan
Major Mil –
Tech Surprise
Mexico
Instability
Double-Dip
Recession
Higher
Nigeria
Instability

31. 2-Axis Scenario Output
(How Country X Evolves)
31
Looks Like
Revolution
Blood, Sweat
and Tears
Amplified
Authoritarianism
The Long
Twilight Struggle

32. Dashboard Charts
Direction:
Current Status
Velocity: MediumHigh Low

33. Helping with Mitigation
• Do we have the capacity to affect risk
likelihood and/or impact? How?
• Do we have the option of doing nothing? … or
of ‘getting out of the business’ altogether?
• Can we share or deflect the risk?
33
• Do we have a warning system in
place for this risk?
• Do we have contingency plans?
• Can we adapt? … or hedge
against it?

34. And Still They Don’t Listen …
34

35. … So Keep Your Sense of Humor
35

36. 36
Questions?