“Ignorance is the softest pillow on which a man can rest his head.”
-- Michel de Montaigne
It is good to be back in the classroom again – a seminar of bright graduate students in Risk Management, searching for wisdom among the host of examples where business, the professions and policy-makers have botched up in large and highly consequential ways.
Relevant to the current news cycle is this syllabus topic: among the shared lessons from such disasters as the Costa Concordia, MF Global and H-P/Autonomy, is the realization that harm and damage increase exponentially as events “scale” in size.
That is, a huge hurricane is more than ten times as destructive as ten small windstorms; a car crash at 100 mph is far more deadly than twenty fender-benders; urban pathology in a city of a million people is more than ten times as complex as in ten towns of one hundred thousand.
Of immediate relevance: no number of over-heated personal computer batteries in the internet cafes could match the potential for incendiary catastrophe of a single lithium-ion meltdown in a Boeing 787 (here).
Nor could all the saloon fist-fights and domestic arguments in a whole police precinct generate the grief of a fatal drive-by shooting. And however impactful to the victims and their families, all the dispersed one-off weekend homicides lack the societal impact of the 26 deaths in the Newtown massacre.
What follows, by way of lessons?
First, there is no “average” harm among a set of events – whether natural disasters or vehicular accidents or civil violence – that are distributed for frequency and impact not on a bell curve but on a graph shaped like a hockey stick.
And for the same reason, the very rare, front-page events are inherently beyond precise prediction, identification or prevention on a “top-down” advance basis.
Instead, risk identification and mitigation of potential catastrophes can only occur at the lower levels of the “pyramid of close calls,” where symptoms of potentially deadly problems can be teased out and nipped in the bud.
As Boeing may be learning -- under whatever belated enlightenment emerges from the realization that its Dreamliner quality program apparently came “batteries not included” – the weakness in its deficient design approach escalated exponentially. By separately outsourcing the lithium-ion batteries and their chargers to different suppliers (here), Boeing forfeited the “bottom-up” quality testing needed to reveal battery flaws far back at the pre-assembly stage.
Other examples abound. The standard commoditized auditors’ report, widely derided for its obsolete and limited message that financial information is “mostly right, most of the time,” proves less and less valuable either to identify, warn of or avoid the large, rare but too-common outbreaks of global-scale corporate chicanery and abuse.
Likewise, providing weapons to every school teacher can be no more effective against the threat of an unidentifiable deranged shooter – but would be just as wastefully costly and fraught with unintended consequences – as the mandating of universal mammograms or colonoscopies above age forty, or the construction at public cost of an individual apartment for every single member of the urban homeless.
As for the challenge of reducing gun violence in America – it cannot reside with the futile attempt to isolate or disarm specifically dangerous individuals – who, like the potentially harmful white-collar criminals or breast cancers or faulty batteries, are too dispersed and lurking beneath detection in the general population.
It is, rather, to act on as many of the “close-call” factors as possible, across the entire spectrum of contributing factors: bans on non-recreational assault weapons and high-capacity magazines, registered transfers with universal background checks for issues of criminality or mental health, mandatory licensing and training as with automobiles, buy-backs and turn-ins, and required insurance and liability for manufacturers, sellers and users.
To achieve the elusive next “massacre that doesn’t happen,” none of these alone is a certainty. Nor can they all add up to perfect elimination of risk. As with the catalog of other examples, that is impossible in a complex and humanly fallible environment. The achievable goal instead is the accretion of incremental opportunities to interrupt the chain.
Just as it took an iceberg to “failure test” the complacency of the Titanic’s design flaws, the slaughter at Newtown illuminates society’s obligation to re-engineer its approach to gun violence, from the ground up.
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Jim - An interesting example of complex organization system design and its affect on risk. Unless there is full trust and sharing among outsourced suppliers, you are correct to say organizational learning is forfeited. Thanks for the insight, enjoy class!
Posted by: Robert Hurley | January 26, 2013 at 08:04 AM
Jim - Excellent piece. Appreciate your willingness to take a stance on tough issues like gun control.
Posted by: Stan Watt | January 27, 2013 at 02:29 AM