Over at the Riskczar blog, Trevor Levine posted some references to the work of John Adams. Professor Adams has been described as Britain’s leading academic expert on risk. He is Emeritus professor of Geography at University College, London.
His work was previously unknown to me, but I have found it really interesting and worth sharing.
CRAP – “Compulsive Risk Assessment Psychosis” is taken from an essay by Adams. Psychosis is defined as “a severe mental disorder in which contact with reality is lost or highly distorted”.
Through a number of his writings Adams divides risk into 3 different types;
- Perceived Directly
- these are the common risks we all manage, crossing the road, driving a car
- we manage these through the application of ‘judgement’
- judgement is a combination of instinct, intuition and experience
- Perceived through science
- Adams argues that most of the published literature on risk management falls into this category (see “Risk Management – it’s not Rocket Science – it’s much more complicated“
- The range of scientists who help us to see these otherwise invisible risks include chemists, physicists, statisticians and actuaries
- This is the realm of institutional risk management – where there is pressure to replace judgement with calculation (formal, probabilistic risk assessment).
- He rather colorfully refers to risks to which numbers can be attached as “the realm of quantified ignorance”.
- Virtual Risk
- This final category is seen as a much larger and more challenging category.
- Adams suggests that another name for this is uncertainty.
- Here science cannot settle the issue, so we can argue the toss based on our own beliefs, convictions and superstitions
- So when science is not able to help, we fall back on judgement to manage risks in this category
- These risks are virtual, they are socially constructed – but can have real consequences.
Perhaps somebody should have brought this to the attention of the Federal Minister for the Environment here in Australia – who has had some real trouble with risk assessments that perhaps fall into that “virtual” category.
Adams talks about “the circle illuminated by the light of science”, wherein we can make well informed decisions, however as the light grows dimmer the “ratio of speculation to evidence increases”. When we try to apply the methods of science to the questions they cannot answer we enter the realm of CRAP and potentially lose contact with reality.
I recommend taking a look at John Adams’ Blog – Risk in a Hypermobile World. You will also find links to his various other works on the site.
Uncertainty is the entire reason that the BCM profession/industry exists in the first place. The extent and potential impacts of uncertainty, the fact that you cannot identify all possible threats and mitigate them, is why the concept of resilience is gaining momentum.
A humorous and self critical look at the idea of risk management is rather relevant. My question today is in the same spirit as Adams’ writing.
Do you know the difference between nominal and ordinal data?
Do you label your ‘risk matrix’ with (for example) values 1-5 (or One – Five)
Unless you are using statistical probabilities for your ‘likelihood’ – it is ordinal data. Four x Four does not equal 16.
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