Tuesday, October 7, 2014

Risk assessment vs risk analysis, and why it doesn't matter

Over the last decade I have witnessed heated debates about the terms risk assessment and risk analysis. In most cases, the outcome of these debates is not a richer understanding of the risk domain but rather a fruitless exercise in politics and getting (or not getting) along. This got me to thinking about the circumstances under which these and other risk definitions are important and those under which they are not.

On Audience

We could speak the truest sentence ever spoken by using exactly the correct words, but in doing so with a non-native speaker visiting in a foreign land, it would be futile. This may sound absurd if we think of foreign tourists, but I have seen security and risk people do this often enough with non-practitioners to cringe. It’s as if shouting ‘risk analysis’ over and over is any more effective than shouting ‘go 1.2 miles west’ to a tourist over and over. Hanging your communication hat on the necessity of others' understanding of your specialized vocabulary is a sure-fire way for your audience to get lost.

I propose that when dealing with audiences who are not risk practitioners you should do as you would with a non-native speaker: don’t expect them to know the nuances of a particular word or phrase and base everything you’re saying on that understanding. Instead, use a greater variety of words, use examples, draw pictures and use your gestures. Keep on doing that until it’s apparent that everyone in the room gets it and wants you to move on to the discussion and decisions at hand.

Of course, when communicating with risk peers in your sub-specialty, it is acceptable and necessary to use the terms and concepts appropriate to that sub-specialty.

On Authority

After I drafted this article, I happened to pick up the July 2014 issue of the Risk Analysis Journal. It contains the special series, “Foundational Issues In Risk Analysis”. The first paragraph of the first article, “Foundational Issues in Risk Assessment and Risk Management”, states, in part, “Lack of consensus on even basic terminology and principles, lack of proper scientific support, and justification of many definitions and perspectives lead to an unacceptable situation for operatively managing risk with confidence and success.” This statement comes from authors who are researchers in the field, one of whom is an area editor for the Risk Analysis Journal - in short, knowledgable people. With this situation being the case for a field that had its beginnings in the 1980’s, how likely and how important is it that your organization develops the perfect definition for these terms? It is probably not.

What I have seen work reasonably well is to settle on working terms collectively, under the leadership of the highest level risk management function in your organization. Yes, that means that the terms and principles they propose and that are ultimately adopted do not account for the nuances of your specialized risk area, but the alternative is that parts of the organization won’t effectively communicate with one another. That is worse, overall, than being stymied in your effort to translate the details of your speciality into business concerns.


Pick basic and simple definitions and move forward. In a few years, your organization just might iterate enough to arrive at rigorous and thorough definitions and, more importantly, to achieve an organization-wide understanding. Who knows? The field could settle on formal definitions for basic terms that work across organizations and sub-specialties at about the same time.