A giant tulip poplar fell in our yard. It’s girth was nearly twice my reach. A storm uprooted and deposited it precisely parallel to our house about eight feet from the west wall. If it had fallen east at almost any other angle it would have caused significant damage.
This happened two years ago. There are several smaller trees as close to our house. There is one even larger oak towering over the northwest corner. I have done nothing to mitigate the risk.
There is a program at Wharton that specializes in near-misses. In 2008 the Wharton researchers added two new layers to the bottom of a pre-existing Safety Pyramid and renamed it the “Risk Pyramid.” The two new layers are:
- Foreshadowing Events and Observations.
- Positive Illusions, Unsafe Conditions and Unobserved Problems – Unawareness, Ignorance, Complacency
(From Assessment of Catastrophic Risk and Potential Losses in Industry (2012) Kleindorfer, Oktum, Pariyani, and Seider)
I am not unaware or ignorant of the risk. I have observed the risk. I don’t hold positive illusions regarding the risk. I have observed near-misses and I recognize them as foreshadowing events. But I am complacent.
Why am I complacent?
According to Alan Berger et al there are ”Five Neglects” common in risk management:
1. Probability neglect – people sometimes don’t consider the probability of the occurrence of an outcome, but focus on the consequences only.
2. Consequence neglect – just like probability neglect, sometimes individuals neglect the magnitude of outcomes.
3. Statistical neglect – instead of subjectively assessing small probabilities and continuously updating them, people choose to use rules-of-thumb (if any heuristics), which can introduce systematic biases in their decisions.
4. Solution neglect – choosing an optimal solution is not possible when one fails to consider all of the solutions.
5. External risk neglect – in making decisions, individuals or groups often consider the cost/benefits of decisions only for themselves, without including externalities, sometimes leading to significant negative outcomes for others.
Some of these factors influence my complacency — especially consequence neglect — but my inaction is mostly a matter of avoiding near-term costs. It will certainly cost me money, time, and several beautiful trees (all current sources of enjoyment) in order to mitigate the uncertain, if very likely, future loss of (more) money, time and one or more fallen trees.
To overcome these neglects and short-term thinking, scholars at the Wharton School of Business have identified an eight step process:
Step 1 Identification and recognition of a near-miss
Step 2 Disclosure (reporting) of the identifiedinformation/incident
Step 3 Prioritization and classification of information for future actions
Step 4 Distribution of the information to proper channels
Step 5 Analyzing causes of the problem
Step 6 Identifying solutions (remedial actions)
Step 7 Dissemination of actions to the implementers and general information to a broader group for their knowledge
Step 8 Resolution of all open actions and review of system checks and balances
I have done everything except Steps 3, 7 and 8. In other words, I have done everything except make an explicit decision regarding priority and implementation. I am kicking the can. I am procrastinating. I am not actively choosing, I am passively choosing to accept the consequences of inaction.
This is not just a personal problem. This is at the core of many organizational, even national problems; even in the best organizations, even in the best nations.
Embedded in the links above are entirely reasonable recommendations regarding management processes to overcome this recurring problem. Mostly it comes down to variations on creative nagging. We use data to nag, processes to nag, required reporting to nag. We schedule meetings mostly as an elaborate way to nag. Laws and regulations nag… and throw in some threats for good measure. By writing this blog I’m nagging myself to take action.
As a colleague says, “Humans typically talk and talk and talk, and if they keep talking about something long enough they will actually do something about it.”
Resilience is enhanced by taking personal responsibility for recognizing and mitigating risks. Resilience is reduced by inattention, denial, lack of communication, and inaction. Ignoring near-misses increases the likelihood — and often the scope — of future loss.
What about other near-misses: floods, wildfires, earthquakes, power outages, communications failures, supply chain complications, and more? When are these stress events one-offs and when are they pieces of a pattern? When does an infrequent risk deserve sustained attention and action?
How about this: When a key asset (such as your home) is catastrophically vulnerable to a demonstrably recurring event (such as high winds) and this vulnerability is amplified by a specific threat (such as a giant tree), action should be taken to reduce potential consequences (take down the tree).
Excuse me, I’ve got some calls to make. How about you?