Everything we think and do is guided by our bias. Every meeting, every environment, every conversation is steeped in the idea of the exact conditions of the world around us at the time. Even the most standard of conversation topics, such as “how’s the weather?” or “how’s your day?” are based on that context. If I’m a risk management professional who spends a majority of my days thinking about and analyzing risk, I want to talk about that with others. Contextually, though, I should understand that others have a different understanding and knowledge of risk aspects, so I should change the way I speak with them to be more (less) technical/jargon-y when discussing risk. How good I am at framing the topic of the discussion impacts quite strongly how successful I am as a risk manager.

The idea behind this context is the idea of framing–that is, the concept of explaining a topic’s stats, figures, and more in a certain way to focus conversation or comprehension in an appropriate manner. It’s a social sciences concept, used in various fields like philosophy, communications, sociology, or political science, to help make rhetorical points or give reference points for an undereducated audience. For example, if I want to discuss car fatalities, I frame it in the number of deaths and the reason for those deaths, as opposed to talking about how many people either don’t get in accidents or how many survive crashes. While those are related statistics, they don’t provide the correct focus to continue the conversation productively.

How Risk Managers Benefit through Structured Framing

The concept of framing should be applied to risk management. As you know, the core idea of risk management is planning for negative outcomes and reacting to the consequences when those negative events occur. Considering that definition, let’s talk about the benefits framing can have for risk.

If we want to discuss risk, the framing needs to be around areas like the monetary value of a risk or the impact to the organization/individual and the likelihood of the event. If, instead, we were to focus on the savings (money, lives, organization, etc.) while not addressing the risk or likelihood it doesn’t happen, the point of focus becomes lost. Though there are benefits to viewing it this way (especially when choosing which risks to plan to mitigate), it’s not where a conversation regarding risk should begin, as it provides a focal point that isn’t dedicated to addressing that risk.

As risk managers, however, comprehension of this question of framing is key. When having meetings or conversations with stakeholders, utilizing knowledge of the concept of framing allows us to create the right conversational context for others to understand why certain mitigation strategies need to be planned (or don’t, if that’s the case). It’s a useful social tool to facilitate and encourage the appropriate response to a given risk-based scenario.

The Framing Effect

To further the point is the psychological phenomenon known as the framing effect, which is based on decision-making. Basically, this is a type of bias that explains that, in terms of the difference between gains and losses, a loss is “more significant than an equivalent gain.” It’s related further to the prospect theory, which shows that sure gains are preferred over probable gains, and that probable losses are preferred to definite losses.

These psychological concepts are simple beneficial ideas in the way that they help us understand the best way to frame risk to ensure they are given the right amount of scrutiny for their seriousness. If it’s a risk with a medium chance of serious impact, framing it as a definite loss in a scenario where it’s not mitigated makes those you’re communicating the risk to consider it a more serious (and likely more actionable) than they might if you were to frame it as a medium chance of doing nothing leading to potential “savings.” Analyzing which frame is most useful for describing your particular situation to ensure others have the right context to make the right decision.

A Word of Caution

We all carry bias into our analysis and decision making process. This is evident, for example, in the way social media’s algorithms find us “sympathetic” or “like-minded” people or sources of information. If you are unfamiliar with framing, it may seem as though this is a psychological technique to manipulate those around you towards your particular risk viewpoint, but that’s not the case. What I’m actually suggesting is that, when you in particular have a good sense of the context surrounding a risk and want others to understand that context, knowing how to present that in the most digestible way is key to ensuring others have the appropriate response. Not framing appropriately isn’t only a failure in communication, it also potentially results in misunderstandings and mishandled crisis events: the entire circumstance you’re trying to avoid in the first place.

Albert Einstein once said that “the framing of a problem is often far more essential than its solution,” and I believe that’s true. Without framing the problem in the proper way, not only is there a potential for framing the solution in a wrong way, but you may never convince the stakeholders that planning a solution is worth it at all. Without that agreement from others, we’re hamstringing our own ability as risk managers to help our institutions successfully prepare for and handle crises. Framing requires forethought and that forethought will also help to better understand the issue and how others might perceive it.