Financial freedom by making decisions like a Police Commander13 min read

The Police National Decision Model - Cashflow Cop Police Financial Independence
(no. 040) – Photo Credit: Wesley Marçal

The Police National Decision Model

Policing in the UK use a model called the National Decision Model (NDM) to aid all our decision making.  Every Police Officer is taught to use the model, but the more senior an officer becomes the more ingrained this way of thinking becomes.

This is particularly visible when attending any briefing chaired by a Tactical Firearms Commander or a Public Order Commander.  The more it is used, the more this type of thinking becomes second nature.

Here is the model:

Police National Decision Model Diagram - Cashflow Cop Police Financial Independence
Police National Decision Model, Image Credit: The College of Policing, UK

Without realising it, after 12+ years of Policing, I find myself unconsciously making decisions using this model even outside of work.  I’ve also built in a number of contingencies in our FI Plan.  

It got me thinking.

Can the NDM be applied to help decision making to reach financial freedom?


Why is the NDM used in Policing?

The NDM provides a clear structure for officers of all ranks to record their decision making.  What they knew at the time, how they acted and why.

These decisions could then be reviewed to promote learning.

For big incidents such as a firearms operation, the decision making is also recorded on a digital recorder.

The Police is not alone here.  The military and other emergency response organisations also use similar models to aid their decision making.

Further details of how the Police use it is published by the College of Policing, UK.


How are Police decision makers supported?

One thing which might stand out is the risk of being judged by the ‘hindsight brigade’.  This is when individuals are used as a scapegoat.  Their decisions attacked by those with complete information when the outcome is less than desired.

This is why key decisions in Policing are recorded.  In theory at least, it helps decision makers recall their thinking at the time the decision was made.

To support this, we also have what are called Risk Principles.

There are ten approved risk principles aimed at encouraging a more positive approach to risk.  It helps officers by encouraging them to not shy away from making a decision just because a degree of risk is involved.

I mention them here because many of the points are applicable to important life decisions as well as investments.  Investing for any meaningful return requires an acceptance of risk. 

We all make bad decisions from time to time.  Some of these principles will hopefully help you be kinder to yourself and not take things too hard.

Here is a summary of the ten risk principles outlined by the College of Policing:

Principle 1

The willingness to make decisions in conditions of uncertainty (ie, risk taking) is a core professional requirement of all members of the police service.

Uncertainty is an inherent feature of operational decision making

Making decisions in an operational context is a form of risk taking

Risk taking offers the possibility of harm but also the chance of success

As professional risk takers, members of the police service must be willing to take risks rather than avoid them

Principle 2

Maintaining or achieving the safety, security and wellbeing of individuals and communities is a primary consideration in risk decision making.

The police have a duty to confront risks and to make risk decisions on behalf of the communities they serve

Fear of being criticised if harm results from a risk decision should not distract the police from their duty to protect the public

Although there is a duty to protect life, this duty is not absolute

Principle 3

Risk taking involves judgement and balance. Decision makers are required to consider the value and likelihood of the possible benefits of a particular decision against the seriousness and likelihood of the possible harms.

Risk takers should consider and compare the value of the likely benefits and the possible harms of their proposed decision

Greater consideration and mitigating action should be directed at serious risks where the likelihood of harm is high

The rigour of operational decision making must be proportionate to the seriousness of the risks involved and be supported by appropriate, considered and robust systems

Principle 4

Harm can never be totally prevented. Risk decisions should, therefore, be judged by the quality of the decision making, not by the outcome.

It is in the nature of risk taking that harm, including serious harm, will sometimes occur

The fact that a good risk decision sometimes has a poor outcome does not mean the decision was wrong

Similarly, it cannot be assumed that a decision was right just because no harm occurred

A risk decision should be judged by how it was made, implemented and managed rather than by the outcome

Good risk management can to help reduce potential harms and increase potential benefits

Good risk-making tools can help to ensure quality decision making

All risk assessment is affected to some degree by imprecision and subjectivity

Principle 5

Making risk decisions, and reviewing others’ risk decision making, is difficult.  This needs to take into account whether they involved dilemmas or emergencies, were part of a sequence of decisions or might appropriately be taken by other agencies.

The quality of risk decisions is inevitably affected by the many influences that decision makers are subjected to

When a risk decision is being reviewed, the full conditions and influences existing at the time should be identified and examined to determine whether the action taken was reasonable in those circumstances

Decision makers have legitimate constraints on the scope of their action to investigate crime and bring offenders to justice

Decision-making strategies that can be used in real-life, dynamic, high-stake situations may be significantly different from those that can be applied when the risk can be anticipated and controlled

The police service is not responsible for all forms of risk

Being helpful may create other risks for police

Principle 6

The standard expected and required of members of the police service is that their risk decisions should be consistent with those a body of officers of similar rank, specialism or experience would have taken in the same circumstances.

Total agreement between all members of the police service on the most appropriate solution in a risk situation is neither possible nor required

A risk decision does not have to be one that even the majority of officers would make

Police forces can use policies, plans, guidelines, checklists and rules to help with decision making but none of these can cover every eventuality

Rules, policies or guidelines should be as light as possible while still likely to achieve what is intended

Police officers and staff must, when taking risks, act reasonably

The police service should ensure that officers and staff as well as non-police individuals and groups understand the standard of care that underpins acceptable professional risk taking

Decisions must be judged against the standard that existed at the time they were made, not the standard that may exist at the time of a review

Risk decisions made by members of one agency may, quite properly, differ from those made by members of another

Principle 7

Whether to record a decision is a risk decision in itself which should be left to professional judgement. The decision whether or not to make a record, and the extent of that record, should be made after considering the likelihood of harm occurring and its seriousness.

It is impossible to record all decisions

Not all risk decisions need to be recorded

A record of decisions and their rationale will assist in ensuring risk decisions are defensible

Principle 8

To reduce risk aversion and improve decision making, policing needs a culture that learns from successes as well as failures. Good risk taking should be identified, recognised and shared.

More valuable lessons can be learned from examples of successful decisions rather than from the much rarer ones that lead to loss or harm

A selection of risk decisions, both those leading to benefits and to harm, should be examined openly and regularly to assist future decision makers

Identifying and learning from successful and good risk decisions will help the police service move from a culture of risk aversion

Principle 9

Since good risk taking depends on quality information, the police service will work with partner agencies and others to share relevant information about those who pose risk or those who are vulnerable to the risk of harm.

Sharing information about individuals between public authorities is essential to keeping people safe

All information sharing must be conducted in accordance with a relevant legal power or duty

Sharing information with other agencies should be consistent with agreed guidelines

Principle 10

Members of the police service who make decisions consistent with these principles should receive the encouragement, approval and support of their organisation.

Where their decisions can be shown to be defensible, decision makers deserve to be actively supported by their organisation

This principle applies even if harm results from risk decisions

Case law recognises the difficulties involved in policing modern societies


Using the NDM

As you can see from the diagram at the start, there are six elements to the NDM.  Decision making begins at the top and work its way around in a clock-wise direction.

  1. Information – Gather information and intelligence
  2. Assessment – Assess threat and risk.  Develop a working strategy
  3. Powers and Policy – Consider powers and policy
  4. Option – Identify options and contingencies
  5. Action and Review – Take action and review what happened

The sixth element sits at the core.  For policing, it is our Code of Ethics.  It recognises that all Police decisions must be consistent with the behavioural code every police officer is expected to abide by.


Applying the NDM to Personal Finance

This is how I use the NDM and Principle of Risks not only whilst I am on the path towards financial independence, but also beyond.

Police National Decision Model Diagram - Cashflow Cop Police Financial Independence
Adapted Police National Decision Model

Let’s have a hypothetical scenario.

The decision: should I invest further in property (real estate)?

Information – Gather information

  • What is happening? I am thinking of expanding my property portfolio and I find a property I am interested in.
  • What do I know so far? I have found the property on Rightmove.  Photos show it needs a bit of work.  I can see the location on the map and it looks promising.  The house is close to public transportation and easy access to main roads.  It is within my budget.  Most importantly, I have Mrs. CfC’s preliminary blessing.
  • What do I not know? I don’t know what the neighbours are like, the exact refurbishment that would be needed, how long it will take to realistically commute into the city, crime in the area, anti-social behaviour, why the owners are selling and so on.  There is much I don’t know.
  • What further information do I want/need at this moment? The key part here is: at this moment.  The decision I need to make right at this point is: should I book a viewing?  What I would do first is conduct some open source research about the area, the price the property last sold for, crime in the neighbourhood and so on.  This will help aid my decision making into whether this is worth thinking about further.

Assessment – Assess threat and risk.  Develop a working strategy

This is the analytical stage which include thinking about possible threats, risks and benefits.  It is about creating a clear plan and is worth asking the following questions:

  • Do I need to take action immediately?
  • Can this decision wait for further information or when I am thinking with a clearer head (less excited)?
  • Do I need to seek more information?
  • What could go wrong (and what could go well)?
  • How likely am I to lose money on this investment?
  • How serious would losing this money be on my family’s stability?
  • Is that level of risk acceptable?
  • Is there someone credible and reliable I can seek advice from?
  • Am I experienced enough to make such an investment?
  • What am I trying to achieve?
  • Why do I want to achieve this?

Legislation and Regulation – Consider legislation and regulation

This stage involves considering the legislation and regulation that could apply in this particular situation.

I would ask myself:

  • What legislation is applicable here?
  • How will the recent tax changes affect me as a property investor?
  • What new regulations are in the pipeline which will affect me as a landlord?
  • How will all the above affect my profit margin and the time I spend managing the investment?

Option – Identify options and contingencies

This stage involves thinking about the different ways to reduce the risk involved in making the decision.

Things I would consider:

  • the other options available: another property, another type of investment altogether or don’t invest and just save the cash.
  • the immediacy of any threat: what is the risk of me not investing in another property?
  • the limits of information to hand: political uncertainty, economic uncertainty etc.
  • the amount of time available: will I have enough time to manage another property?
  • the available resources and support: can I find a good property manager for that house?  Do I have enough money if the refurb goes over budget?  Do I know any reliable builders and contractors?
  • what action to take if things do not happen as anticipated: what will I do if the property does not cashflow well?  What is my escape plan?  How much time and money do I have to sink into this venture?  How much am I prepared to lose?  Do I have the capacity for such losses?  Is my family and wife aware of all these risks and accept them?

Action and Review – Take action and review what happened

This stage is separated into two.   The first is about taking action on what has been decided and implementing the plan.  The second step is the review what has happened and determine if more decisions need to be made. 

If there are further decisions, then I would go round the NDM again.  It is a continuous loop.

For me, at the centre of the NDM would be my ‘Stone of Life‘.  This will guide every decision I make.


Final thoughts

In real life outside of Policing, important decisions that must be made on the spot are rare.  When they do occur, it is not possible to sit down and go through the NDM in a methodical and detailed manner as described above.  However, with practice, anyone can structure their thinking in order to make better decisions even when time is limited.

Being taught this model has meant that I find it strange if I were to try and make a decision without using it.  It really clears my mind and makes me think properly about the consequences of what I am thinking about doing and to have in place adequate contingencies.

The ‘Risk Principles’ reminds me that just as risk cannot be eliminated in Policing, there will always be a degree of risk in any investment.  The decisions I make today is based on the information, the skills and the experience I have at the moment the decision is made.  Things might go wrong, but hindsight is a gift for the future, not a punishment for the past.  

Will you be using the NDM to help with future big decisions in life?


Note: Nothing I have shared here is sensitive or classified.  The information is publicly available at the College of Policing, UK.


More from the Blog

How to Apply a Detective’s Mindset to Protect Your Money

My Stone of Life: Lessons from the Chimp Paradox

Being a 1% – Guilt and keeping it real when making a ton of money

Humans of FI

What am I reading or listening to at the time of posting?
Subscribe to Blog via Email


4 thoughts on “Financial freedom by making decisions like a Police Commander

  1. Pingback: The Full English – Media narratives – The FIRE Shrink

  2. weenie Reply

    Hi CfC

    Fascinating to read about those principles, although I feel like my head would explode if my thought processes were like that all the time!

    That said, I guess I use something from work myself, a system I learned from being on projects, which I apply to my FI plan and investments – it’s the DMAIC system, namely Define, Measure, Analyse, Improve and Control. It was used at work to solve business problems and improve processes, so it was all about obtaining optimum quality for the customer but I found that I could apply the steps for my own benefit.

    I have a post sitting in my Drafts section from a couple of years back on this – perhaps I’ll finally get round to fleshing it out somewhat and publishing it!

    • Cashflow Cop Post author

      Thanks Weenie. Definitely not something to use for every single decision in life; like do I feel like having a tea now? What outfit should I wear?…

      I agree, it does blow your mind when you first start. It is a lot of effort to think like this. It takes quite a long time before it become easier and more natural. I still have the diagram in front of me at work to force myself to use it. It’s so much easier to just make a decision rather than slow things down and think through each step.

      Looking forward to reading your DMAIC article!

  3. Pingback: The Sunday Best (8/25/2019) - Physician on FIRE

Leave a Reply