exploring the social in social risk

PURPOSE

The fundamental nature of social risk merits rethinking given the pervasive impact of social media technology, conversational computing and generative algorithms. ^[1] This website describes our work exploring the potential value added to social risk management with key perspectives borrowed from the social sciences.

In Part 1 of this series we look at how risk identification, viewed as a subjective social construct, focuses attention on the planner and their predictions, and exposes points of risk in social environments. Part 2 explores the concept of risk events as behaviour linked to difference in belief systems, and how this might be anticipated with scenarios and in natural language. The goal is to provide strategists and risk managers with tools to test strategic and operational plans for their robustness against social risk.

Four things to consider

What I mean by words is here. Why I'm here is here.

PART 1 - Social is risky business

The focus of social risk herein is the subjective risk of groups forming and doing real things, such as ruining brand reputation, but only because of commonly held individual beliefs. ^[3]

Social involves individuals and groups of individuals. Being social involves communication and feedback, sending and receiving messages. Individuals have their own interpretation of messages- what they mean and how to respond. ^[4] All of which results in some level of uncertainty, the irritation of doubt. For a sender the uncertainty is about the response to their message or action; will they be misunderstood? For the receiver, uncertainty is about deception; does the message contain fake information? Has the context been tampered with? The interpretation of communication is based on beliefs hidden to the interpreter. To be social is to risk.

Risk emerges naturally, inevitably as part of human behaviour. Just as someone learning to fit into a social group risks rejection, a company marketing a new product risks its reputation.

Communication involves communicating signs- symbols such as a word, gesture or action whose meaning is arbitrary and learned by each individual.[5]

RISK ... of what?

Rather than risk of "an untoward event", we explore the risk of "misprediction" of something untoward, placing attention squarely on the beliefs and expectations of the planner. The feeling of uncertainty arises from a mismatch between the patterns predicted of the future, and the patterns of an unfolding present. A risk is a subjective pattern, a missing piece that completes the puzzle of the uncertain future. ^[5]

A risk manager has little to offer an uncertain stock market sensing something might happen, but a market characterized with a 10% risk of dropping 20% is focused and active.

Points of risk

With risk as of misprediction, the mental model of a planner, as observer, becomes a communication road map to identify points of risk.^[6] It may be simple or very complex especially when augmented with technology.

Misprediction can present at any point on a system map. [7] For example, a risk engineer (Observer) might predict 3 points of risk: in product design from a researcher (individual); in design review from a external consultancy (Group); with popularity of the product in the market (Society).

Points of difference

The number of possible risk events at any point of risk is limitless; what else could happen?. However, by asking why anything untoward might happen, stepping into the belief system(s) that resulted in the event, we find a more stable structure that is closer to the root cause of many risk events.

Whilst the relationship between belief and behaviour is complex, the planner and risk manager are fundamentally interested in simpler questions; do they think like us? Do they think like we think they do? Are they different? Following this, we examine risk as of misprediction of difference.

PART 2 - Estimating the difference

Estimating the underlying belief system at a point of risk would be a complex task. However, we intuitively sense potential kinship or misalignment, and the possibility of some kind of disruption. ^[8] Our focus here is to explore the value of framing social risk as misprediction of the difference between the beliefs of two groups, between for example, the beliefs that frame an organization's behaviour or product and those of their customer.

Traditional scenario-based risk identification provides an event-based structure where scenarios are defined by major objective trends in the environment. This reduces a limitless number of possibilities to something useful and manageable. Semiotic scenarios go deeper by following sign posts of difference.

Semiotic scenarios estimate the compatibility of belief systems, which then can be used to test the robustness of critical assumptions and to plan mitigation strategies aimed at reducing the mismatch. They provide additional, more enduring insight into unspecified emergence of untoward events/trends; a deeper structure within which to think about the future. More ...

Communication in natural language provides a unique opportunity to estimate the thinking behind the words. Discourse reduces complex mental activity to a series of words available for analysis.

The meaning of a message in natural language is to be found in the relative distribution of words and the contexts in which it was constructed. To the extent such distributions represent their constitutive belief systems, a comparison of word distributions is a differential measure of beliefs. More ...

Examples of recent projects, work in-progress and curious ideas are here. Comments and feedback are always appreciated.