(Part of the 31010 Series of posts on Risks & Ventures. For more information on this series please follow this link).
” Consult the wise ” (1)
In mid-2016 in the run up to the referendum vote on whether the United Kingdom should leave the European Union in 2016, Michael Gove, the British Conservative party politician and leading member of the Leave campaign (2) was asked in a media question and answer session to name some economists who supported the idea of Brexit, that is to say, any that viewed the idea of the United Kingdom leaving the European Union positively from an economic perspective.
It was a deliberately challenging question because the journalist asking it very likely would have been aware that the majority of economists who had at that time expressed an opinion on the issue publicly had indicated that it was in the country’s economic interests to remain in the European Union or retain a very close economic alignment. However instead of answering the question, and it’s worth pointing out that there were still some names he could have potentially offered in response, Gove responded by questioning the role and validity of expertise itself and suggested that “people in this country [the UK] have had enough of experts“.
It’s not unusual for politicians in high office in leading economies to ignore or dispute the advice of experts, but there aren’t many other occasions that we can think of recently when a politician has directly suggested that people with expertise should not even be part of a debate on an issue. (3)
This is a bit of long preamble towards introducing the Delphi Technique, and this is because the Delhi Technique is all about gathering and using the insight of experts.
It is one of a number of risk assessment techniques which involve members of a group sharing their views and in ISO 31000 it is intended for use as a tool for eliciting views from experts and stakeholders; however the main difference with other group discussion techniques like Brainstorming and the Nominal Group Technique is that although these techniques acknowledge the importance of bringing in subject matter expertise when it is needed, the Delphi Technique instead explicitly requires the risk owner or facilitator to find people with subject matter expertise to contribute.
Let’s illustrate this with and example, and say you are working in a private investment fund that acquires and develops properties, and probably this fund follows one or more particular themes or market segments in terms of the size of investments it makes, the locations it invest in, and the types of properties it is most interested in, whether residential, commercial, industrial and so on. If the fund is successful then there is a good likelihood that they understand this theme well, and that they have a good knowledge of the market and other factors that are relevant to this type of investment.
However let’s also say that something happens so that this familiar niche doesn’t look seem so profitable anymore, let’s say maybe the fund mainly normally concentrates on higher-end residential properties but there is now a bit of oversupply and property prices in this segment have stalled.
At this point their options include choosing to do nothing, although their investors might not like this choice; choosing to continue to pursue this less profitable part of the market that they know well, although this is a choice to accept an opportunity cost; or choosing to find a bit of the market that is potentially more profitable that they don’t know so well.
The danger of the third option is that they lack some expertise in this area and this increases the likelihood that they might not make good decisions, and to mitigate this hazard they could potentially solicit advice from subject matter experts, maybe realtors, lawyers and financiers who have knowledge of other investment areas, such as different geographical areas or different types of properties. There would be a cost to this in consultancy fees but this would probably be worth it versus the potential of buying the wrong types of properties.
How To Do Expert Decision-Making with The Delphi Technique:
Step 1
A panel of experts would be sourced.
Step 2
The panel would all be given the same information, issues for consideration and questions as each other, and they would be asked to provide their opinions individually and independently. They would not necessarily be told who else was in the panel, and in fact anonymity is an important part of an authentic Delphi process.
Usually these opinions would be gathered in a written form to allow circulation without attribution of comments to any particular individual, but qualitative responses based on survey-style questions are possible too.
Step 3
The responses from the panel members would be collected and shared amongst the rest of the panel for a second round of responses, perhaps with some additional facilitation as appropriate.
This step allows the experts to see what the others think and (re)consider their responses again based on this information.
- Do any of the other responses make them change their views at all?
- Can a consensus view emerge?
The second round of written responses would then be circulated.
Step 4
The process continues until the hosting organization or risk owner decides either that either a consensus has been reached and / or enough insight has been provided and / or they have used up enough budget or other resources on the process. If there are still strong minority positions after rounds of the technique that are not moving towards a consensus view, these should be examined in further detail before any final decisions on the issue are made.
The Delhi Technique has a lot of positive aspects about it:
- The fact it is done anonymously takes away a lot of the problems with dominant personalities, seniority or professional rivalries that some of the other group discussion and decision-making methods in ISO 31010 have to be careful of.
- The technique can be used to identify context, threats and opportunities, relevant issues and possible mitigation measures or solutions in all sorts of situations.
- It can be done with a flexible timescale (i.e. a short process or go on for months).
- It can address long- and short-term forecasting.
- There is no requirement for the experts to ever be present in the same place at one time. Which is good because genuine experts in any field tend to be busy people and it isn’t easy to collect them together repeatedly at the same time.
The negatives include:
- You need to source the right types of expertise that you need. Creating balance and having diverse opinions in a pool of expertise is usually a good thing, but the outcomes of any group technique are going to be effected by who is in the group.
- You need to ask the right questions. Be clear about what you are trying to find out.
- Expertise comes at a price. If you are sourcing experts you may have to compensate them, and unless there is a social or potential reciprocal motive than you might have to pay them, and expertise often isn’t cheap.
- Some “experts” have a tendency to make recommendations just to sell their services. It might not stop them having genuine expertise but expertise doesn’t necessarily remove biases either. Good ones who are asked to provide neutral opinion will do so, but you need to be careful about this. Good experts will also tell you if something is outside of their areas of expertise.
- The process can be a bit difficult administratively.
- You still need to make sure their advice works for you. They don’t everything about your situation, only what you have decided to include on their brief.
- Experts or not, you may still need to qualify their advice. In our real estate example perhaps they recommend a particular geographical area to look for investments in: you would still need to go out there and take a look at it, speak to more people in that area and do your own due diligence.
Using the Delphi Technique in Practical Risk Management
Although this technique is suitable for use in complex research questions it can absolutely be applied in practical situations in personal situations and by all sizes of businesses too. In fact, most of us already do something very similar when we need advice and we seek out a variety people whom we trust with experience in different areas of life. The Delphi Technique follows the same kind of idea but just with a bit more structure behind it.
It might be harder to convince these people to put down their advice on paper, but let’s say you had a personal business idea or plan that you were presenting separately to a few trusted people, with more knowledge about aspects of the topic than you. One option would be to collect the comments that you had received and present these to each of those individuals after they had given their own feedback, to see if they agreed or disagreed; and then continuing to circulate all of the comments as developed your plan and concept further; remembering that it is important that you do not circulate names attached to those comments.
Or more simply when you are asking for advice just trying to say phrases like “one person we asked about this said…” versus “this is what [that named person] advised me to do…” because this already creates a particular perspective and set of biases in the mind of new person you are asking for advice.
Software and Online Tools for using the Delphi Technique
There are a number of tools available which can help support a Delphi Technique process. At it’s most simplest these could include online survey applications like Survey Monkey or a Google application like Forms, and it can absolutely just be done by email too as long as the facilitator of the exercise takes steps to ensure anonymity as feedback is being shared.
There are some specifically designed apps for the Delphi Technique including Welphi which has been specifically designed to do online surveys in a Delphi-style, and Calibrum, which gives options for both rounds of insight and real-time, single-round sessions. A free Delphi Technique tool is also currently available from the Wharton School at UPenn too, which might be a good option for students want to incorporate this technique into their research projects.
(1) An inscription from the Temple of Apollo at Delphi, Greece and one of 147 inscriptions known as the Delphic Maxims. The most famous of these is Σαυτὸν ἴσθι / Know Yourself.
(2) The campaign which was trying to persuade voters that the United Kingdom should leave the European Union, which was ultimately successful.
(3) R&V tries not to take sides in politics but if you are British and reading this, whether you were for Brexit or against it we hope that you would still see the value of subject matter expert opinions in complicated issues.
We are opening comments on this one, and so if you can think of any occasions recently when politicians haven’t just ignored subject matter opinion but actually discouraged it from being part of an informed debate we’d be happy to hear about it in the comments.
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