Are We Overconfident? – Part 1

Overconfidence has led to many a downfall: Tony Hayward was overly optimistic about BP’s timeline for containing the oil spill, New Orleans overestimated its levees, and home buyers nationwide took out loans for more house than they could afford. It won’t happen to us, right? We’re all in the business of reducing risk. We know the dangers of overconfidence. We’re prepared, we’re realistic, and we’re ready. Or are we?

Are we squandering improvements in risk reduction? Author Malcolm Gladwell argues in his article “Blowup” that we sometimes “consume” risk reduction by being less vigilant or less careful in other areas. The measures we put in place to protect ourselves and our organizations become a safety net, perhaps providing a false sense of security. As a result, we tend to take more risks, expecting our safety nets to catch us should we fall. We come to rely on those plans and safety measures not as a back-up, but as a de facto first level of defense. Can this theory, called risk homeostasis, be applied to business continuity and public safety? I believe so. The emergency notification fallacy. When it comes to emergency communication, I contend that we (and by “we” I mean the collective “we”) are also in danger of being overconfident to the detriment of the organizations and people we protect. Incident communication can be a tricky matter. Most organizations have wisely abandoned call trees and limited messaging systems in favor of robust emergency notification systems, which certainly help mitigate risk and make emergency communication much easier and more effective. Problem solved, right? Not so. There are several common assumptions that can cause your plan to unravel. Today, we’ll take a look at the first one: Assumption #1: “We have an emergency notification system; that’s all we need.” Yes and no. Technology is critical, but it’s not enough. Simply having an incident notification system in place means we can check the box on having basic communication capability, but if we over-rely on the technology without addressing the other components – the people, processes, and messaging – we run the risk of failure when we expect technology to compensate for gaps in people or planning. Are people aware of your system and its intended use? Do they know how to respond to your messages? Is your team trained to use the system most effectively? Do they know when to use it and when not to? Have you crafted out messaging in advance so it’s clear, concise, and actionable? Are you adhering to best practices for communication transparency? Are you tailoring messages based on information needs? Stay tuned. Tomorrow, we will explore Assumption #2: “We can reach everyone using social media.”