“In 1938, thousands of Americans confused a radio adaptation of the H.G. Wells novel The War of the Worlds with an official news broadcast and panicked, in the belief that the United States had been invaded by Martians. Is it possible that the Internet could be the source of a comparable wave of panic, but with severe geopolitical consequences?” [p11]
This is taken from The World Economic Forum’s Global Risks 2013, the Eighth Edition of this report, and introduces one of their “risk cases” – Digital Wildfires in a Hyperconnected World.
Once again this years report makes interesting reading, especially as they discuss the concept of resilience. It should be compulsory reading for all professionals in management fields as it talks about the risks that may be on the horizon scan for top level strategic management – rather than the mundane fodder we normally find consumed in “Operational Disruption Administration” (aka BCM).
The bulk of the report introduces three risk cases. These cases capture the idea that many of the top 50 risks are inter-related. These three “interesting constellations” are presented as important cases for leaders to consider and expand upon via discussion and debate. I have mentioned the Digital Wildfires, misinformation spreading with lightning speed on the internet, the other two are;
- Testing Economic and Environmental Resilience
- which discusses the challenges of responding to climate change in the context of economic crises.
- The Dangers of Hubris on Human Health
- which addresses the threat from antibiotic-resistant bacteria.
In addition to the different risk scenarios they identify, the report is also interesting for its use of cultural dimensions to highlight the potential issues in dealing with these risks.
While discussing the Economic and Environmental Resilience case the the problem of cognitive biases are highlighted as “significant hurdles to be acknowledged and overcome” [p20]. The result of these biases is that we may reject information because it conflicts with our view of the world, because we discount longer-term risks/impacts compared to the short-term or simply we choose ignore the idea of risk because we want to promote a “can do” culture.
Similar ideas apply to the Digital Wildfires risk case, where information (either true or false) circulates “within a bubble of likeminded people” [p25], such as the many online risk/BC discussion groups. Even incorrect, or misleading, information that supports our current ‘world view’ (or even professional practice view) is hard to counter and dislodge.
“Thirty years ago, chloroflourocarbons (CFCs) were seen as a planetary risk, while threat from a massive cyber attack was treated by many as science fiction.” [p14]
We all hopefully notice that the nature of our risks is constantly changing. Effective ‘horizon scanning’ means moving outside our comfort zone. As such I encourage people to read this report and reflect on the potential need for new perceptions and different realities in the practice of risk management.
By the way, the “Digital Wildfire” risk was realised in Australia in recent weeks, when an anti-coal activist wiped A$180 million from the value of Whitehaven Coal by issuing a hoax press release.
Perhaps you should read it for no other reason than your Top Executives may be reading it, rather than what you may currently be using to scan the horizon.
Later posts in this series will address the section of the report on National Resilience to Global Risks, which talks about resilience in terms of 5 components, and the alternative risk framework model that underpins much of the Global Risk report.
How wide, or narrow is the horizon that you are scanning?