Bacon sandwiches increase your risk of getting bowel cancer by 18%. That was the headline.
In 2015, the World Health Organisation classified processed meats as a Class 1 carcinogen, putting them in the same category as cigarettes and asbestos. The detailed report said that of 100 people who don’t eat processed meats, six will get bowel cancer; but of 100 people who eat a bacon sandwich every day, seven will get bowel cancer – an increase of 18%. However the absolute risk to you as a bacon sandwich eater has gone up from 6% to 7% – just one percentage point higher – which sounds very different and may cause you to react differently. The probability of the risk may also be expressed as odds. For those that don’t eat a bacon sandwich every day, the odds of getting bowel cancer are 6/94; but if you do go for the bacon, then the odds are 7/93, which may or may not mean that much to you.
In managing a risk and in deciding what if anything, you might do about it, you really have to understand it. In an organisation that means that the decision-makers and supervisory functions (e.g. the Board) need to understand it, too. Understand the likelihood and what drives that likelihood, and does it change under certain conditions (economic, social, meteorological..)? Understand the potential impact (what and why and when and how and where and who), any triggers that bring it closer, and any other factors or changes that might influence it. Understand what you have in place to prevent or reduce the risk and whether you are confident those things are in working order, and what your tolerance or appetite for this risk really is. And it all needs to be communicated to those responsible, communicated clearly – not just a headline.
Communicating risk is one of the key steps in the risk management process. How well that is done will affect what you do about the risk, whether you need to do anything at all, or if you do, whether you manage it effectively or whether you fail to deal with it, and in that case, it just might hurt you badly.
Data Source: The Art of Statistics – David Spiegelhalter