I have set up a page on this blog where I intend to write up summaries of book I have found worth reading. This post contains the introduction to some notes I did on a book by Greg Ip titled “Foolproof”. I don’t agree with everything he writes but I do think he makes a very important point about the potential for successful risk management to create the preconditions for larger risk management failure in the future. This may seem counter intuitive but his point is that a sense of danger can often be useful in that it promotes good risk management while a feeling of safety can promote behaviour that results in risk reemerging often in new and less obvious forms.
“Stability … may … be illusory, hiding the buildup of hidden risks or nurturing behavior that will bring the stability to an end”
“Our environment evolves, and successfully preventing one type of risk may simply funnel it elsewhere, to reemerge, like a mutated bacteria, in a more virulent fashion.” (Chapter 1)
Ip is not arguing that attempts to improve safety are pointless. All other things being equal, there are many ways in which systems and processes can be made safer, but all other things are rarely equal in the real world. The potential for unintended consequence is also increasingly being amplified by the complexity and inter linkages that characterise the environment, economy and financial systems we have created in the pursuit of growth and efficiency.
Ip also sounds a timely warning on the dangers of seeing adverse events as a morality plays in which the required response is simply to identify/punish the guilty and then devise more rules to stop the specific behaviour that caused the problem. The desire for justice and to punish the guilty is a deeply embedded human behaviour but the risk is that these distract attention from the underlying systemic issues that will see the risk manifest via another avenue.