Beyond Binary RAG: Enhancing Decision-Making with Nuanced Risk Assessment
The all-too-familiar Red, Amber, Green (RAG) system has become a staple in risk management and decision-making processes across various industries. However, an over-reliance on this binary approach can lead to oversimplification of complex issues, resulting in inadequate risk assessment and suboptimal decision-making.
The Problem with Binary RAG
The traditional RAG system categorizes risks into three distinct states:
- Red: High-risk or critical situations that require immediate attention.
- Green: Low-risk or stable situations that require minimal attention.
- Amber: Medium-risk or uncertain situations that require monitoring.
While this system provides a basic framework for risk assessment, it often fails to capture the nuances of complex issues. The binary nature of RAG can lead to:
- False negatives: Critical risks being overlooked due to their classification as Amber.
- **…
This post was originally shared as an AI/ML insight. Follow me for more expert content on artificial intelligence and machine learning.