Navigating the Risk Landscape Randstad Risk-Controlreflex Conference 26 April, Bussum Donald Macrae

Public Risk The UK’s Risk and Regulation Advisory Council explored the management of “Public Risk”. “Public Risk” is those risks that may affect any part of society and to which government is expected to respond It is defined by the public’s perception, not by subject. It saw the public’s heightened anxiety over various issues as a complex adaptive system, with multiple players having an interest in escalating the level of anxiety. Failing to regulate did not necessarily leave people free to manage their own risks, because of these other “Risk Actors”.

They Identified Five Crucial Trends Risk Actors and Risk-mongers –not a simple issue of regulate / don’t regulate Too much data and information –so consultants interpret / advise / escalate Intolerance of failure –linked to one-dimensional problems Pressure for announcements –you almost feel sorry for Ministers Community resilience –Impact on personal responsibility

Four “Risk Issues” The RRAC investigated and reported on four Risk Issues: The public risk from trees Building resilient communities Health and safety at work Risk aversion and Policing

Tools - The “Risk Landscape”

Tools - The Risk Forum The RRAC invited a range of stakeholders to work together in a 4 hour interactive forum, with professional facilitators who run these for the World Economic Forum in Davos. All voices were heard – not just the loudest – and people listened. Each stakeholder had a chance to explain each perspective and the group was steadily moved through a well designed space, with posters and comments to stimulate ideas. A series of plenary discussions focused on gradually approaching consensus on the key issues, if not solutions.

The Risk Landscape for Policing

The public are not waiting for government to do something. They are already engaged in their own solutions and interests and their concern about this issue may change. It is a moving target. Government is just another actor – and not always the most important. Government does not provide a “solution” but just another factor that the various actors will then use according to their own interests. The change which follows the government’s action can be unpredictable, because of the way that actors adapt to it. So, Avoid BIG SOLUTIONS and avoid long term solutions (if you can). Lesson 1

1.Identify the hazard / damage. 2.Assess the chances of it happening. 3.Decide which risk strategy to adopt: –Accept the risk (probability is low or level of damage is low) –Transfer the risk (e.g. take out insurance or delegate responsibility) –Mitigate the risk (reduce the probability or reduce the impact) –Avoid the risk (try to remove the factors that give rise to the risk) 4.Implement the strategy, including communicating the decision. Risk Management

All policy starts with the most difficult question – what is the real problem? Many policies try to solve the wrong problem. They tackle symptoms rather than causes or pick a small detail and miss the big issue. The problem will be at different levels, so may be different problems. –A political issue, where the proposed “problem” is a factor in a broader political battle. –A value / belief issue, so a rational, evidence-based approach may miss the point. –A technical issue, so a rational, evidence-based approach is vital. –An international or EU issue, so options will be limited. –All of these. So, do not accept someone else’s version of the problem. Decide it yourself, after consulting people with other perspectives. Identify the hazard

This can be the most difficult option for a politician to choose but is often the right one. This option can be extended to developing contingency planning, i.e. we won’t try to stop it happening but, if it happens, we will have some things ready to deal with it. Huge resource is often wasted trying to manage a risk that never materialises. The word that should worry you is “safety”. Everything can always be made a bit safer but often is not worth the cost of doing it. Sometimes, the extra safety is just an illusion or an abstract calculation. But politicians are terrified of taking risks with “safety”. Accept the risk

This is very difficult for government to do. It can try to transfer risk to insurers or to contractors but it cannot transfer political risk. The public will still blame it if something goes wrong. That is the political challenge – and it can be met. Government has to persuade the public that something is not its responsibility but that of another organisation. The risk-regulation reflex puts that in reverse – government taking responsibility away from someone else. So the first step is to stop volunteering to transfer risk to the government! Avoid a single-issue presentation of the problem. Help somebody to present the other side of the issue. Then the politician becomes a statesman, making a choice between two sides, rather than opposing the popular but simplistic version. Transfer the risk

This involves trying to reduce either the chances of the risk materialising or reducing the impact if it materialises, or both. In the “avoid” form, the risk is reduced to zero by removing the key conditions for the risk materialising. It is what most people assume “risk management” is about. These are the most difficult options to do but the ones that politicians like. It gives the impression of being able to manage the future (politically attractive but unlikely to work). But, if you’re lucky, it can be obvious what the problem is and easy to change it. So don’t ignore these options. Just don’t think they are the only options. It is these options that give you new regulation – this is the reflex. Mitigate / Avoid the risk

Implementation and Communication Using the Risk Landscape You are already engaged with the actors and so you work with them on implementation. Communication is already part of that engagement. Engagement is two-way. You see how the landscape responds to what you have done and you can then try to adjust further. Traditional approach This is all one-way. The policy is a final “solution” and communicating it is an announcement. Either it works or it doesn’t because it is one-way and a one-off. Very often, it doesn’t work but you hope that people will have lost interest by the time they realise it didn’t work.

Political problems are still real problems. In a democratic society, politicians have to respond to public concerns – even if they seem ridiculous, irrational or out of proportion. The opposite of “rational” is not always “irrational” – it may instead be “non-rational”, i.e. based on values, not evidence. Policymakers often underestimate the importance of values and overestimate the value of evidence. All risks involve balancing different outcomes. The danger of the reflex is where that balance is not seen and there seems to be only one answer. All crises have another side to them. When the public become aware of both sides, the anxiety eases and there is a better chance of a useful decision. Lesson 2