The Estimate Nobody Wants to Hear
You are preparing a quarterly threat assessment for a manufacturing firm expanding into a new region. Your draft rates the risk of organised cargo theft at the new distribution hub as 'high,' based on three factors: two comparable hubs in the region suffered thefts in the past 18 months, the planned site has a single access road, and local law enforcement response times average 40 minutes. The commercial director, who championed the expansion, argues the rating is 'alarmist,' points out that the comparable hubs used different security contractors, and asks you to 'soften it to medium so it doesn't derail the board approval.' Your assessment is due to the board in 48 hours.
1. How do you handle the request to change the rating, and what do you put in front of the board?
Read the worked answer
The request is to alter an analytic judgement for a non-analytic reason. That is the line you cannot cross, but the way you refuse matters.
Reasoning:
- Separate the rating from the recommendation. The commercial director may have a legitimate point about contractor differences. That is an input to confidence, not a reason to change the rating. You can state lower confidence without lowering the rating.
- Do not soften to 'medium' under pressure. If you do, and a theft occurs, the assessment becomes evidence that the risk was known and misrepresented. That is worse for the director than a 'high' rating.
- Make the rating defensible. Show the three factors explicitly, state the assumptions, and state what would change your mind. 'High' with transparent reasoning is harder to attack than a bare label.
- Give the director what they actually need. They need board approval to survive. Pair the 'high' rating with a costed mitigation set (access-road monitoring, response-time contingency, contractor vetting standards) so the board sees a managed risk, not a blocker.
- Escalate if pressed. If instructed to change the rating, record the instruction, escalate to your line manager or the audit/risk committee, and note the dissent in the report.
Model answer: keep the rating, lower confidence if warranted, attach mitigations, and document any pressure to alter it.
2. The commercial director says the comparable-hub thefts are irrelevant because they used different contractors. How do you respond, and does your rating change?
Read the worked answer
The point is partially valid and should be absorbed, not dismissed.
Analysis:
- What the comparison does support: the regional threat environment (organised cargo theft is active in the area), the target profile (similar goods, similar hub model), and the structural vulnerability (single access road). Those are independent of contractor choice.
- What it weakens: the inference that this site will be hit at the same rate. Contractor quality is a real variable.
- So: the threat and vulnerability components of the rating stand; the likelihood component becomes less certain. That is a confidence adjustment, not a rating change.
- State it explicitly: 'High risk; moderate confidence, because contractor selection is an unproven variable. If the contractor meets vetting standard X, confidence rises and residual risk falls.'
- Do not let a single variable carry the whole argument - the single access road and 40-minute response time are unchanged by contractor choice.
Model answer: acknowledge the variable, adjust confidence not rating, and specify what evidence would move the rating.