What are the chances that I'll fall off a ladder?

I was reminded horribly of our different attitudes to risk a few days ago, when we were roused just after 7.00 by a strange sound.  Turns out the wonderful man who's been cleaning windows in our street for over 15 years had fallen while washing our neighbour's windows. A--- was lying there in next-door's front garden, his arm bent rather alarmingly under him.

Neighbours gather round

We came to help A---, and so did other neighbours.  The emergency services were called, advice was provided by the 999 operator and soon A--- was being covered with blankets against shock, the ladder was put in a safe place, his car had additional parking vouchers put in it and sweet tea was dispensed.

Not on the same scale as responses after disasters like the recent tsunami or volcano, of course, but a reminder that people will help when there's a clear and present need.

Attitudes to risk

If you think an accident is never going to happen, then the cost of insurance seems like an unnecessary burden on the business. Likewise the cost of ensuring that systems and equipment are in place to make that accident even less likely may seem too high.

The accident in our street coincided with the world watching as the 33 Chilean miners were - remarkably and wonderfully - all brought to the surface safe.  The Chilean President Sebastian Pinera has promised a review of mine safety. Earlier this month, in the UK, a review was published into unnecessary health and safety rules, promising to get rid of 'nonsense'.

One of the interesting things that we often share with participants on the Post-graduate Certificate in Sustainable Business is an analysis of what makes up our attitudes to risk.  David Spiegelhalter is a regular contributor, and he blogs here.  You can find some great examples of our perception of likelihood being at odds with mathematical probability.

Our attitudes are a complex combination of our assessment of the likelihood of something happening, and our perception of the severity of the impact if it does.  So far, so rational.  This is the way a professional would address risk. I've been learning a lot about the detail of this in the massive and complex Climate Change Risk Assessment project, where I've been privileged to be helping out with stakeholder engagement. The stages which the technical experts are going through, gathering data and developing complex ways of handling it are truly impressive.

But as lay people, we discount some risks if we wish they didn't exist.  We intuitively factor in the 'pain' of doing something to reduce or manage the risk (both likelihood and impact).  So we consider what social benefits we'd miss out on by stopping smoking, or how silly we'd look in a cycle helmet. And we notice very clearly the cost of insuring ourselves and our business, without having much evidence to form a view of the likelihood or impact of a business risk occuring.

And we also consider who it is who is causing the risk, and whether we feel we can control our exposure to it.  This inability to control our exposure to the risks, and lack of faith in the benefits to us, are reasons why people are fearful of nuclear power or GM food. And there are other reasons.

Paul Slovic explains his view of the differences between professional and expert views of risk, and public perceptions of risk, in this paper.  The more 'dread' an impact is perceived to be (that is, the impact is horrific or unusual - think of it as a 'yuk' factor), the more 'risky' it is perceived to be by the public.  The less clear it is what the impact will be (once the causal event has happened), the more 'risky' it is perceived to be by the public.

Four rationalities

According to some anthropologists and political theorists, there are four cultural types and their attitudes to risk differ.  Individualists, egalitarians, fatalists and hierarchists will see risks (and what to do about them) in contrasting ways.  Our individual 'risk thermostats' have cultural filters in them.  John Adams puts it like this:

The contending rationalities not only perceive risk and reward differently, they also differ according to how the balancing act ought to be performed. Hierarchists are committed to the idea that the management of risk is the responsibility of “authority” - appropriately assisted by expert advisers. They cloak their deliberations in secrecy because the ignorant lay public cannot be relied upon to interpret the evidence correctly or use it responsibly. The individualist scorns authority as “the Nanny State” and argues that responsibility for decisions about whether to wear seat belts or eat beef should be left to individuals. Egalitarians focus on the importance of trust; risk management is a consensual activity, consensus building requires openness and transparency in considering the evidence.

The fatalists' motto is "duck if you see something about to hit you". Read more here.

Who tells us what the risks are?

And its worth bearing in mind that we doubt some people and trust others.  This recent paper shows that we make assessments about whether the communicator is 'like us', and then come to a judgement about whether we believe what they are telling us about risk.  If we don't identify with the messenger, we won't listen to the message.

Who's to blame?

Attitudes to risk also intutively take account of insurance and pay-back.

• If the worst happens, I will / won't have a source of support and help.
• If the worst happens, someone will / won't be held liable or accountable.

If blame is linked to the provision of help to those who have suffered, then perhaps those responsible for the risk will take measures to reduce its likelihood and its impact.  This is the logical chain which underlies campaigners' calls for discussions on liability, decommissioning and clean-up to be concluded before new technologies are introduced.

What about insurance?

A---'s unfortunate accident made me revisit what I've learnt over the years about attitudes to risk - the professional and the lay.

Turns out that apart from a broken arm, he is fine.  Phew.

But he doesn't have insurance and so he'll be without an income until he can work again.

So his accident also made me glad that, being a bit of a risk-averse and rule-bound person, I have always made sure my business is insured for loss of earnings, public liability and professional liability.   If you're in a similar line of work to me, then joining AMED is a great way to get access to a good deal on business insurance.  See here.