The Missing Piece in Good Risk Management

A study into the targeting of public health campaigns has significant – and far reaching – implications for the current school of thinking in relation to risk management.

Have we inadvertently come across the missing piece in good risk management?

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Public health campaigns intended to reduce unhealthy behaviors like binge drinking and eating junk food often focus on the risks of those behaviors.

The study in the August 2008 edition of the Journal of Consumer Research suggests a relatively simple but surprisingly effective strategy to improve consumer health.

Authors Jonah Berger (University of Pennsylvania) and Lindsay Rand (Stanford University) found that linking a risky behavior with an “outgroup” (a group that the targeted audience doesn’t want to be confused with) caused participants to reduce unhealthy behaviors.

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The studies began by identifying groups of people who study participants liked, but with whom the participants would not want to be confused—”outgroups.”

In the first study, the participants were undergraduates and the “outgroup” was graduate students.

When participants were led to believe that graduate students (seen by undergraduates as overly serious) consumed more junk food, they chose 28% fewer junk-food items than participants who thought their group ate more junk food.

In another study, researchers placed fliers in freshman dormitories on a college campus.

In one dorm, the fliers emphasized the health risks of binge drinking. In another dorm, the fliers linked binge drinking to graduate students. Participants in the dorm with the second flier consumed at least 50 percent less alcohol than those who saw the health risk fliers.

In a third study, students on their way to a campus eatery were surveyed about perceptions of the media. A control group read an article about politics and pop culture, and a second group read an article associating junk-food eating with online gamers (an “outgroup”).

When research assistants observed the two groups ordering food, they found that the group who had read the article about online gamers made healthier choices.

These studies highlight the importance of identity in health behavior and suggest promising directions for future health promotion appeals, the authors believe.

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The study has ramifications for the current execution of risk management.

Have we focused as a politic of people interested in its proper execution only on the “supply side” of the equation (ie – the risks and benefits that a decision maker is exposed to of a particular event, control, process etc) to the exclusion of the “demand side” of the equation (ie – the identity that a given choice communicates to others).

If this hypothesis then holds true, corporations should expend greater efforts on linking undesirable corporate behaviors to outgroups either within the corporation or within the broader business community.

How does this work out without ostracizing Joe – the poor, underperforming clerk in Accounts?

Perhaps choose as an outgroup either a type of person within the organisation (eg – a lazy or unproductive employee who wont be given a bonus … that is a grouping that rationale thinking employees are not likely to aspire to) or seek out such examples in other environments (ie – the acknowledged non team player on the local sporting franchise).

In the end proper risk management isn’t any one strategy – to date, however, could it be argued that corporate risk management theories have focused more on the outcome of the action than on the signal that the action sends?

Food for thought for when you next choose an apple because you just saw an online gamer eating a donut!

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