Risk or uncertainty

This is interesting: Results of an experiment in risk and uncertainty management.

Short version: talking about risk narrows the amount of information you will gather; talking about uncertainty leads to richer (and more optimistic) conversations. My own spin is that it’s really good to acknowledge nay embrace, uncertainty. The language of risk tends to close us down to opportunity.

Slightly longer version from the report itself:

For good reasons a debate has been raging among risk management specialists about whether risk management should concern itself with unexpectedly good outcomes and favourable events as well as bad outcomes and unfavourable events. Linked to this has been a debate about what words or phrases to use to communicate this change of scope.

One suggestion has been to talk about “uncertainty” management instead of mentioning “risk.” In theory this should have two beneficial effects: (1) It is open about whether things are negative or positive, and (2) for some people it suggests a more general kind of ignorance than “risk” and should encourage more information gathering. Both effects help encourage people to get their mental blinkers off and see more of the possible futures.

The results of this experiment, based on 36 participants across four alternative wordings, are that asking people for “areas of uncertainty” did indeed lead to a dramatic fall in the proportion of purely negative outcomes considered. There was also a tendency to list more actions that involved finding out more, suggesting a greater interest in reducing ignorance.

4 thoughts on “Risk or uncertainty

  1. Michael Wagner

    Interesting. This reminds me of the pragmatic questions that Peter Block notes shut down exploration of opportunity:

    How do you do it?

    How long will it take?

    How much does it cost?

    How do you get those people to change?

    How do we measure it?

    How have other people done it sucessfully?

    Block doesn’t say these are bad questions, just that they get in the way of finding what is really worth doing if you begin with them. Note that these “how” questions are about dialing down risk.

    Have you read “The Answer to How Is Yes” by Block?

    Reply
  2. Johnnie Moore

    Hi Michael, good point. I read Block a few months ago and found him very thought provoking. What he seems to point to, and what I often experience, is that it’s easy to reduce motivation by getting too preoccupied with apparently rational “tools” for making things happen. As you say (and he does) the measured approach isn’t wrong – it depends on context.

    Reply
  3. russell

    This is only slightly related, but your mention of ‘unexpectedly good outcomes’ reminds me of some of the (possibly apochryphal) stories about the development of communications pre-testing methodologies by people like P&G.

    So many companies use these tools these days to try and avoid bad results (foolishly in my opinion) without really bearing in mind that they were also created to try and prevent/predict unexpectedly good results – because it was almost worst for an ad to do surprisingly well, resulting in the need to add production lines at the last minute, rejig logisitcs etc.

    That may not actually be true, but it feels true, because so many of those ‘predictive’ tools seem to be designed to force communications into a narrow band of potential – where they won’t perform too badly, but also won’t perform too well.

    Like I said, only slightly related, but kind of interesting. (I hope)

    Reply
  4. russell davies

    This is only slightly related, but your mention of ‘unexpectedly good outcomes’ reminds me of some of the (possibly apochryphal) stories about the development of communications pre-testing methodologies by people like P&G.

    So many companies use these tools these days to try and avoid bad results (foolishly in my opinion) without really bearing in mind that they were also created to try and prevent/predict unexpectedly good results – because it was almost worst for an ad to do surprisingly well, resulting in the need to add production lines at the last minute, rejig logisitcs etc.

    That may not actually be true, but it feels true, because so many of those ‘predictive’ tools seem to be designed to force communications into a narrow band of potential – where they won’t perform too badly, but also won’t perform too well.

    Like I said, only slightly related, but kind of interesting. (I hope)

    Reply

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