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Is it possible to communicate risk issues successfully?

06.01.2011  |  Goble, W.,  exida LLC, Sellersville, Pennsylvania

Keywords: [safety] [risk analysis] [communication] [safety systems]

A safety project has a better chance of being approved if the person making the payback decision understands the concept of “risk cost.” If there is a likelihood of a $1,000,000-cost event happening once every 100 years, then the risk cost/yr is $10,000. A project gets approved when the cost of the safety project is less than a reduction in risk cost. However, one big problem is that risk cost is well not understood by many people, and the concept is hard to explain. Often, the risk is estimated to be “noncredible,” therefore the risk cost is extremely low. Therefore, no risk cost reduction, no payback. One time when I tried to explain risk cost, I was asked, “Who do I pay the $10,000 to each year?” Many a good safety project has been shot down because the concept of risk cost was not well communicated.

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