Martin Pergler shares an article that explores risk appetite and how to address it as we move into phase two of COVID-19.
Act I of COVID response has been about broad societal measures to stop the pandemic from overwhelming the health system, e.g. physical distancing, pausing the economy, cutting travel; all to slow exponential spread. While Act I isn’t over, it’s increasingly clear a long Act II, balancing reopening and personal freedoms with stubbornly continuing COVID risk, will follow. That’s before Act III, a full-fledged recovery (vaccine? antibody tests? herd immunity?…), can truly start.
For Act II, we need to start having clearer, more nuanced, and non-judgmental discussions about risk appetite. This is a concept from (institutional) risk management, specifying* how much of what type of risk an entity is prepared to take, and under what circumstances, including for what benefit. One of the challenges in risk management is reaching consensus on risk appetite, and reflecting that different individuals and groups in the entity may have different risk appetites. This risk appetite concept is also applicable to individual and societal risk-taking, though less often discussed explicitly. In any case, it’s going to be very important for COVID Act II, and we’re already seeing it rear its head, in ugly, unstructured, politicized fashion.
Key points covered include:
- Objectively different personal risk
- Different personal risk tolerance
- Lack of rationality
- Selfishness vs altruism
Read the full article, Getting serious on COVID risk appetite, on LinkedIn.
Martin Pergler summarizes the assessment of comparative risk levels from two recent press articles and compares them to simple-minded risk assessments to identify the value of the information.
As we gingerly try to “unfreeze” economic and social activity after this first wave of COVID, there’s a lot of prognostication what formerly normal activities are more or less risky. Two recent U.S. press articles thoughtfully assess comparative risk levels, but also fall into several pretty typical risk assessment traps. What did they do well, what could they have done better? (This article focuses on methodological lessons learned and risk management best practice. Apologies; I have nothing to add as to how risky it truly is to have your hair cut next week!)
The New York Times surveyed several hundred epidemiologists when they expect to feel personally comfortable doing 20 activities. So e.g. only 3% expect to feel comfortable attending a sporting event, concert, or play this summer, 32% in 3-12 months, and 64% in more than a year.
Points covered in this article include:
- Analysis of commentary
- Assumptions about risk mitigation
- Risk assessment
Read the full article, COVID risk by activity: how to (not) do risk assessment, on LinkedIn.
Martin Pergler shares a couple of files on understanding COVID-19 contagion dynamics, and some of the tradeoffs of managing spread vs long term social/economic impact.
People seem to be increasingly internalizing and accepting efforts prudentially required to slow down COVID-19s exponential infection rates. And hopefully we’ll converge even more from the poles of “barricade ourselves behind hoarded toilet paper” and “what me worry, I don’t see a problem yet” behaviour. However, given differences in, and evolution over time of, testing and reporting around the world, we also need to get ahead of monitoring the evolution of the outbreak and its containment in different geographies. We’ve all seen the “buy time to flatten the curve” graphic many times by now, but I think we all hope we can minimize the area under the curve, not just flatten it.
With this in mind, I’m happy to see a paper on statistical time series modeling applied to localized contagion dynamics cross my desk, from Italy no less! Pretty technical in nature, and frankly there isn’t truly enough data to draw any actionable conclusions yet, but we’re going to need analysis of this type to be able to extrapolate sensibly going forward, and to judge to what extent containment approaches — including different intensities of social distancing — are working.
Read the full article, Coronavirus: monitoring change in contagion dynamics, and access links to the files on the Balanced Risk Strategies website.
Martin Pergler begins a conversation on corporate culture to identify the pros and cons of working for the corporate world, small business or the public sector.
Putting considerations such as the work itself, employer values, career trajectory, benefits, job security, etc. (all covered by others) aside, there is the elephant in the room. Inhabitants of the corporate world, small business (including startups), and the public sector are all fond of rolling their eyes — with a bit of envy mixed in — at the other sectors’ working culture.
During my time at a major consulting firm, my employer and my clients were mainly in the corporate sector. These days, as an independent consultant, I work with institutions of all 3 kinds. I think there are characteristics, by which I mean frequent but not universal, strengths and weaknesses of each. But I think there’s no clear winner in terms of overall effectiveness (or personal warm-and-fuzziness), however one could define or measure it.
Read the full article, Who’s “better” to work for? Corporate world, small business, or public sector?”, on LinkedIn.