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Risk Management, and the importance of the right words

August 2, 2011 by
Filed under: Governance, Risk and Compliance, Risk Management

Everybody who has ever been misunderstood knows: nothing more important than choosing your words correctly. I guess there is no need to provide examples here; it would only reveal my clumsiness, but I guess (hope) you have your own to think of now.

We're in the business of risk management, actually in the business of supporting technology for risk management. I know the importance of defining a proper risk language, using the right terms to make sure people have the same idea when they read about risks, about the mitigating measures. We spent many hours with our clients defining their risk language; what is the definition of a risk owner, which terms are used for the risk response, and so on.
Recently, it struck me that the most important thing in risk management is to use the proper wording for the actual risk. With that, I do not mean that a risk should be adversary to an objective, and that a risk should not be confused with a cause. That is an important topic, and something that goes wrong many times, but that is not what I want to address here. Let me give you the example that gave me this thought. Everybody is familiar with Global Warming, and is familiar with the (fierce discussions about the) potential risks associated. Problem is, there are huge political debates about whether there is actually such a thing as global warming, or not. Here is where I think the inventor of the term Global Warming made a mistake. It should have been called Extreme Weather.
This issue with Global Warming is that nobody has the physical ability to feel that planet Earth is warming of 2 centigrade in a hundred years. It is simply impossible for people to sense that, so this means you will have to look at data. And the trouble with data is, as you all know, that it depends on your model (or even your mental model in this case) what comes out of it.

So, if this phenomenon would have been called Extreme Weather, this problem would vanish. Everybody understands; not necessarily because it is scientifically true, but the general feeling is that there is more rain, worse summers, worse this and that, than in the 'old days'. The whole political debate would be very different; no longer do you need convince people of a phenomenon, and potential things that would happen in 100 years. One would have an explanation of things 'everybody always knew'.

In risk management, this means that the risk manager doesn't need to sell the importance of his work. He scares the hell out of everybody with well-chosen wording, and everybody carefully does what they need to do. I guess it is important to have a good understanding of marketing processes when you're active in Risk Management. Maybe a bit less scientific and a wee bit more marketing.

Ps. For those really into risk management: you will have noticed that Extreme Weather is an actually consequence of Global Warming. So, I guess this means you will have to think including well-chosen consequences into your risk description. Just to increase the recognition with the non-experts you're communicating with.

Tags: BWise, Risk, Risk Management, GRC

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