Context and perception
For public sector risk managers here’s a poignant example of the difficulty of assessing risk, either threats or opportunities, on their own merit, stripped of the context. Context, while important, can make us blind.
The example below challenges our idea of what’s great versus what’s just … ho-hum. How do we know that something is great.
The story is based on a “stunt” that the Washington Post and Joshua Bell played on DC Metro commuters. Bell performed for commuters as might any street musician; not withstanding his reputation as a renowned virtuoso violinist, nor the fact that he was playing the world’s greatest music that few people can perform convincingly, nor that his instrument was a handcrafted Strad, made in 1713 by Antonio Stradivari.
A onetime child prodigy, at 39 Joshua Bell has arrived as an internationally acclaimed virtuoso. Three days before he appeared at the Metro station, Bell had filled the house at Boston’s stately Symphony Hall, where merely pretty good seats went for $100. Two weeks later, at the Music Center at Strathmore, in North Bethesda, he would play to a standing-room-only audience so respectful of his artistry that they stifled their coughs until the silence between movements. But on that Friday in January, Joshua Bell was just another mendicant, competing for the attention of busy people on their way to work.
The above passage is from the Washington Post article. It’s a great read. What happened? There was lots of great music making. You can listen to it! However, very few people that passed him on their commute recognized that they were hearing truly great music. Indeed, far fewer than the Post or Bell expected.
How does this apply to risk management?
- Context adds or subtracts significantly to our appreciation of an event or situation; we may need to strip the context away to reveal the heart of the matter
- The elements of the risk framework need to be in place: training, perceptiveness, interest or motivation and a supportive structure are needed to identify opportunties and threats, or to really hear the music
Curious to hear your thoughts.
[...] Context and perception [...]
Pingback by Risk Management in Regulation » Do we need to autheticate the source or what the source reports? — April 26, 2007 @ 8:09 pm
I think it depends on what you mean by context. If you mean the need to get at the heart of the “problem” then shouldn’t you be using root cause analysis techniques to determine what the real issues are.
This however, cannot occur without a thorough understanding of the context in which the risk occurs. You need to understand the Risk Management Context - what types of risk are you concerned about, and what level of risk are we prepared to tolerate. You need to understand the external risk (something which COSO ignores)because it is how your organization interacts with its environment which will determine the extent, if any of the level and types of risks; and you need to understand the internal risk context of your organization .
Without a thorough understanding and analysis of context you should not proceed with any risk analysis. Assessing risks in isolation can be futile because if the risk is not going to help or hinder your organization in achieving its objectives then worrying about it is frankly a waste of time and money. I work with many organizations who waste huge amounts of money mitigating risks that are “out of context” and forget those that are imperative to the success of their business plan.
David Smith
Managing Director
Risk Matters
http://www.riskmatters.com.au
Comment by David Smith — August 14, 2007 @ 1:04 am
Thanks for your comment David. I agree with your points about the importance of context. The example provided by the Joshua Bell “stunt” underlines this even more. The real context that was purposefully hidden was that he was a virtuoso violinist. If some of the witnesses to the event cared enough about great music to pay high ticket prices to see him in a live concert, you’d think they’d stop and listen and even ask a few questions. That didn’t happen.
In our area of risk practice, the area of regulation, fraud is an issue. Fraud artists who understand how to make the context seem what it’s not are the problem. The point we’re making with this example is that you can’t always believe what you see. The real context that may be hidden is critical.
Comment by Richard Page — August 14, 2007 @ 8:07 am