Risk Management
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Peter Sandman’s formula on risk communication

RIsk = Hazard + Outrage

This is a glacier in Greenland breaking off into the Atlantic


As risk advisor to financial institutions, my work on risk communication largely focus on the technical component of risk; How to accurately quantify risks, and then communicate it out in ways that people can relate to and act upon.

Risk = Hazard + Outrage


This interview of Peter Sandman in Freakonomics Blog is a revelation for me. At the first few paragraphs, I was ready to dismiss his formula as another consultants’ gimmic. But as I read on, I find it is a starting point of a very insightful analysis and discussion of the psychological side of risk communication. This is especially true for public-scale risk, like climate change, which is used as an example in this article. But I believe the idea should translate to risk discussion on organization level as well.

There are many gems in the article, but my favorite part is the following.

Yes, well you have two fundamental problems, and you have to decide which is the bigger of them, or when one is the bigger one, and when the other is the bigger one. One problem is apathy, people who are insufficiently upset about climate change, and the other is denial. People who are motivated not to be upset about climate change because they dislike something in the climate change message. … They dislike the source of the message, they dislike, as I suggested earlier, the remedies that you’re proposing; they don’t like being blamed, they don’t like how depressing and fatalistic your message is. There’s something about what you’re saying that is provoking denial. And apathy and denial look the same. And I have to stress because denial is used in the climate change literature to mean something else entirely, I’m not talking about denial in the political sense. I’m talking about denial in the psychological sense: people who can’t bear to take climate change seriously because it causes something that they can’t tolerate in the message. If that’s what you’re up against, then you need a set of strategies that are aimed at that.

The 7-point communication strategy he proposed at the end of the piece also resonate quite strongly with me. A highly recommended read.

Photo credit: Tim Norris / Ilulissat Icefjord – Greenland

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