Perceptions of Risk

I was reminded of this topic last week while attending a state training council meeting at the Ohio Emergency Management Agency. A county director lamented how national response scenarios are geared around major cities such as New York or Washington D.C. and have little in common with what most counties in Ohio face.

What the director was getting at is a two-way communication process that identifies consequences that matter to the stakeholder. A dirty bomb is of concern to planners in New York but has little meaning to county planners in Southeastern Ohio. The same principle applies whether you are in the private sector or the public sector. Risk has to be perceived through a credible message. For the public sector, the challenge is to inspire confidence in the message being sent. This becomes difficult in the event warnings are sent out about attacks that do not come true (regardless of the reasons). For the private sector, the challenge is not to be perceived as putting their own personal interests ahead of their stakeholders (which could be investors, customers or the public at large). Regardless of the sector, a consistent and believable message about risk is essential to getting the stakeholders to recognize it.

While this post is about risk, it is also about communication. The communication platform for informing your stakeholders (whether citizens, customers, or board members) needs to be concise and informative enough so that the necessary choices can be made. Think about an order to evacuate a building that is on fire. People will understand the risks and will usually follow orders rationally. Shareholders will support the expenditure of funds to reduce risk at the work center if they understand the communications. They will act rationally however if the communication is unclear or imprecise, the will act irrationally and not provide the necessary funding. Actions are both the result of the information being communicated as well as how it is being communicated.

The risk facing an organization or community must be credible and understood by the majority, otherwise support for recommended courses of action will not be generated. People’s desire to spend on means to avoid risk is directly proportional to their perceptions of how likely that risk is to occur. As we move further away from 9/11 there is a tendency to feel this risk is less likely to occur again. Any expenditures of funding or effort must result in a reduction of risk otherwise stakeholders will begin to doubt the message.

Withholding information is a natural tendency when the facts still aren’t well understood or the situation is still dynamic. Officials at the Three Mile Island nuclear power plant tried this tactic with disastrous results. In a similar vein, it may be tempting to dismiss or trivialize the concerns of stakeholders. Concerns of stakeholders should be treated with respect and not condescension. Other times there may be a desire to manipulate fact to exaggerate facts or magnify risks to advocate a specific course of action by the stake holders. The Bush administration is still reeling from claims of weapons of mass destruction that justified the invasion of Iraq.

Reports are now beginning to surface that Al Qaida may be in a position to oust Pakistan's Musharaff and thus gain control of nuclear weapons. The United States has to evaluate the risks posed by this possibility. Musharaff may lose power but Al Qaida may not necessarily ascend to power. If Al Qaida does ascend to power in Pakistan, their primary concern will be to maintain power which does not automatically mean threatening the US with a nuclear attack. If an attack seems possible, certain targets will be more vulnerable than others. The DHS and Department of Defense will have to collaborate on intelligence estimates to provide the President and citizens alike with a credible risk assessment. It remains to be seen how well DHS will provide the necessary information to the public.