Risk is something we live with everyday. It is part of our being alive. Every living thing has expectations. And when it acts on those expectations, it risks error, because nothing living is infallible. Any one of our expectations may be wrong at any time. None of us is so wise, or so favored, or so skilled, or so wealthy, or so lucky, that we can avoid error and the risk of it.  

The survivors of the great Asian Tsunami of 2004 know that even an infinitesimal risk, the risk of merely being in the affected areas, can be made manifest in unimagined reality. The families of those who died in the 9/11 attack have the same kind of knowledge of risk made manifest. Who among them, that fine sunny morning, had even an inkling of the risk their loved ones were taking, merely by going to work in the towering global center of commerce that was the World Trade Center? The top executives of Enron, Tyco, Worldcom, Lucent, Microstrategy, and Arthur Andersen realized to their lasting regret, that they risked, and suffered, consequences they never imagined were a real possibility at the time they made the various decisions that destroyed or severely damaged their companies. The "Neo-Cons", both in the Bush administration and outside it, urged the US intervention in Iraq, and provided estimates of its likely costs initially ranging from zero to $1.7 Billion in testimony to Congress. At this writing, costs are $300 Billion, and there is no end in sight for either these, Iraqi or Alliance casualties, or the growth of anti-Americanism and terrorist recruitment in the Muslim world partly resulting from the intervention.  

Recent history is all about people taking risks they did not know they were taking, and losing out, indeed losing big. In business, risk assessment and risk management are more important than they have ever been. The Sarbanes-Oxley Act has focused the anxiety about risk into a concern for compliance with Government regulations. But beyond this concern with SOX compliance, there's also a renewed concern, after the "go-go" days of the late '90s, about managing risk to avoid the fate of the Enrons and Andersens.  

In business, all eyes are focused on risk. The purpose of this report is to present some new instruments and models for measuring risk intelligence. 'Risk Intelligence' is an ambiguous term. In many quarters, the term means a particular kind of business intelligence. And business intelligence, in turn, according to some, refers to a kind of information situated on a continuum of increasing value ranging from data, to information, to intelligence, to knowledge, and finally to wisdom. Sometimes the term 'actionable intelligence' is used to describe information that is good enough to act upon, even if it has not yet reached the level of quality we see in knowledge. In this context, actionable risk intelligence is information about the risks we face that is good enough to act upon. 

This report is not about risk intelligence in the sense of information that is higher quality than ordinary information, but of lesser quality than knowledge. It is about 'intelligence' in the sense of ability to learn and solve problems. More precisely, it is about tests and metrics measuring the relative ability to solve problems and reduce the risk of error in one's decision model solutions. 

Five such tests and related metrics will be described in this report: 

• Chapter 1 presents a test for measuring relative risk intelligence of competing organizations entering a new area of activity;
• Chapter 2 presents a test for measuring relative risk intelligence of competing knowledge workers in solving problems and reducing the risk of error in a particular problem area;
• Chapter 3 presents a test for measuring relative risk intelligence of competing job candidates in solving problems and reducing the risk of error in job-related situations;
• Chapter 4 presents two tests. One for measuring relative risk intelligence of competing teams in solving problems in a particular problem area; and a second test for measuring relative risk intelligence of competing Communities of Practice (CoPs) in solving problems in a particular problem area.

 In addition, the main body of the report ends with Chapter 5 which considers alternative risk intelligence tests and explains how to develop additional ones. 

The report also contains a number of appendices: 

• Appendix 1 describes the Analytic Hierarchy Process and also discusses a tool for implementing it called Expert Choice Software
• Appendix 2 explains how to prioritize among risk areas to facilitate selecting among targets for reducing risk
• Appendix 3 presents the conceptual framework underlying the risk measures including chapters on:
  • What risk is and how you reduce it;
  • What knowledge is;
  • Seeking, recognizing and formulating problems;
  • Making new solutions; and
  • Killing your worst ideas

• Appendix 4 provides References and a bibliographical essay for further research, and
• Appendix 5 acknowledges the help I've received from others in developing this report.