Anticipating Surprises by Expanding a Risk Assessment's Possibility Space Into the Unknown With C – K Theory

What should a risk assessor do if she suspects the possibilities derivable from presently available knowledge are incomplete? Risk analysts often encounter this problem when assessing risk in open systems that produce novel outcomes leading to surprises. The solution is to expand the possibility space into the unknown. Yet the novel possibilities then included cannot be mere figments of the imagination; they must be tethered to presently available knowledge to be credible. This may seem paradoxical: to go beyond presently available knowledge by assessing novel possibilities, which, to be credible, must be grounded in presently available knowledge. Yet it is not quite as contradictory as it may first seem. C-K Theory (CKT) was developed to explain how innovators overcome a similar problem when designing a new product. An innovation involves creating something that has novel features. Some of its components may, therefore, not yet exist, and there may even be uncertainty about whether they are technically feasible. This lack of knowledge makes it difficult to determine the innovation's possibility space-a difficulty similar to that faced when assessing risks in open systems. CKT describes how innovators overcome this problem by iteratively moving between a knowledge space comprising established facts and decidable propositions and a conceptual space representing novel, as-yet-undecidable propositions. As illustrated herein using the cases of the credit crunch and the 9/11 terrorist attack, CKT can help anticipate surprises by generating, expanding, and integrating the possibility space within the extended (C, U) risk-assessment framework.