Strategy Survival Guide

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events. There are a number of different techniques for identifying risks, these include check lists, prompt lists, workshops, questionnaires and brainstorming. Work from the organisational analysis should also feed into the development of the criteria, particularly those looking at suitability, feasibility and acceptability. Understanding the organisational structure and culture of the department can help in understanding the ease or difficulty with which new strategies can be adopted. Some consideration should also be given to whether the Department has the resources and competencies available to deliver a new strategy. The key areas to assess include: • Availability of and sources of finance • Skills: organisational, leadership, technical expertise • Availability of physical resources e.g. buildings, offices etc • IT capacity • HR capacity. The criteria should also encompass a range of different perspectives on the policy problem, including the following (where applicable): • economic • social • environmental • ethical • legal • scientific. Sponsor, stakeholder and public attitudes should be reflected, together with relevant local, national (including the devolved administrations) and international perspectives. It should also include any specific values or principles that could underpin the success of future policy. 3. Assess options against criteria using quantitative or qualitative data Once the options have been agreed and the criteria determined, assessing each option against each criterion brings them together. All available evidence should be employed, both quantitative and qualitative. The results are then typically presented in a matrix format. If a wide range of criteria is employed, then the quality and type of information available to make each assessment will vary considerably. This will mean that the results in turn will vary in nature, including: • monetary values • other quantified data • rankings • naïve descriptions (e.g. positive/neutral/negative). In principle, the MCA could stop at this stage (though preferably including stage 6) and the matrix presented in its raw form to decision-makers. The exercise has added value by presenting and appraising options in a systematic and comprehensive way. But unless one option clearly dominates all the others, implicit judgement is still required. Subsequent stages help to make the judgements involved in decision-making much more explicit. 4. Score options against criteria on a consistent basis Scoring takes place primarily as a pre-cursor to weighting, and is designed to present in a common format all of the results generated in stage 3. A typical approach is to decide a range of scores for each criterion, for example 0 (the lowest score) to 100 (the highest score). The end points are then fixed in relation to the raw results. Example A: if the cost to the Treasury of an option varies from £1m to £10m, then a score of 100 may be assigned to £1m and a score of 0 assigned to £10m. Example B: if options are ranked as "positive, neutral or negative", then a score of 100 may be assigned to "positive" and a score of 0 assigned to "negative", with "neutral" scored as 50. Once end points are fixed for each criterion, intermediate scores are assigned, usually on a linear scale. The matrix can then be re-written using this common scoring basis. Strategy Survival Guide – Strategy Skills Page 170
5. Weight criteria and compare options The next step is to determine relative weightings for each criterion. This is in many ways the most difficult stage, and may be where public and stakeholder input is most crucial – different groups will have very different weightings. There are a number of approaches. One often-used approach is to divide a number of points (typically 100) between the criteria, in line with their perceived weighting relative to each other. Alternatively, a more qualitative approach may be used (e.g. "essential" versus "desirable" versus "irrelevant"). Once weights have been assigned, they are used to adjust (quantitatively or qualitatively) the scores from stage 4, so that options can be compared. This should enable an explicit ranking of options to be carried out. 6. Carry out sensitivity analysis and revisit conclusion The ranking emerging from stage 5 may well be sensitive to some relatively small variations in data, scoring or weighting. The presence of uncertainty makes it almost inevitable that the assumptions and judgements employed in the analysis are less than firm. Hence before any decisions are taken, it is essential that sensitivity analysis is carried out on each of these aspects of the analysis. The question to be addressed is: "Do the rankings stay the same when data, scoring and weighting is adjusted within reasonable bounds?". Strengths MCA can typically incorporate a wider range of criteria (e.g. social, environmental, ethical) than that employed in a typical financial analysis, and unlike a cost-benefit analysis, does not require monetisation of all costs and benefits. At the same time, it brings a systematic approach to appraising and comparing options with a wide range of quantifiable and non-quantifiable impacts, and is a more robust process than the implicit judgements that may otherwise be made. Weaknesses The main disadvantage is that – if carried out to its fullest extent – it can be a very time-consuming process. References HM Treasury’s Green Book Multi-Criteria Analysis – A Manual, appraisal guidance prepared for DETR by NERA, The Stationery Office (2000) ISBN 1 85112 454 3 The Office of Government Commerce Policy to Successful Delivery site provides some useful guidance on appraising options Strategy Survival Guide – Strategy Skills Page 171
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Building an Evidence Base 113 Data
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in The Magenta Book) are rigorous m
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