Wilhelm KrossIt can sometimes be difficult to talk with stakeholders about risk. However, project status reports should include information on the risks facing the project. Plejades partner Dr Wilhlem Kross spoke at Project Zone Congress in Frankfurt on real-life risk management. I spoke with him about a different topic: how to talk risk.
Wilhelm, let’s first clarify what we mean by risk communication. Could you please clarify it?
Risk communication is defined as “any purposeful exchange information about risks” or “any public or private communication that informs people about the existence, nature and severity of risks”. For decades, it has been clear that the problem in risk management communication is not whether a hazard exists or not but whether it is under control. Practitioners are well aware that there is a difference between perceived and actual risk. The perception of risk also varies depending on the information available.
Project managers should also be aware that if we don’t talk about risk, it makes it easier for stakeholders to accept mitigation plans.
Yes. Yes. Risk communication practitioners are well aware of the attempts to disclose as little information as possible that will result in the least fear and resistance.
What is stopping the recipient from hearing the true message about the risk?
Today, risk management relies on a solid understanding of hazards, failure modes and consequence chains. Some software tools allow for risk aggregation via simulation. Numerous standards and regulatory frameworks have integrated the controlling perspective.
Many soft and almost invisible factors play a part in determining risk. Risk is dependent on the nature of the risk, ethics, as well as the set of values that are held by the stakeholder group. Risk also depends on the likelihood of loss, whether it is voluntary or involuntary, the point of view (risk perception/attitude), the regulatory environment (compliance), the level of knowledge and the related learning curve, and divestment options.
Do you have any other suggestions?
There is a lack of solid information on the consequences of actions such as death, loss of life, time, money, and the many difficulties involved in making managerial tradeoffs such as the monetary value or ecosystems of life. Most jurisdictions are reluctant to define quantitative standards, such as the value for a human life that is at risk due to certain actions.
Risk management is often done without reliable data on human reliability and without professional standards. Risk management is done with unclear or overlapping definitions and no agreement on validity and relevance standards such as the acceptable level of risk.
There are many other factors that can influence how someone interprets risk messages.
Yes. It is known that certain common distortions play a role. Take, for example:
Acceptance of voluntary risks is more common than acceptance of involuntary risk.
Individual control is less risky than government control.
Fair risks are more acceptable that those that are unfair.
Trustworthy people or institutions are more likely to present risk factors and control measures.
Some ethically objectionable risks are more risky than others.
Natural risks are more acceptable than artificial ones.
Exotic risks are more risky than those that are familiar.
The media are also interested in strong stories.