Ever noticed how easy it is to sell fear? Do this or else....! We see it all the time in politics, in religion, and even in risk management. And, with fear comes power and influence. We're all to ready to sign up to follow whomever will lead us away from our fears.
The leader is the apex and we are their pyramid--bigger is better. And, of course, we're usually all too ready to pay for the leadership--just make it all go away.
So then we have the toxic mix of fear, power, and money: it's enough to bring on the Declaration of Independence to separate ourselves from the inevitable corruption of absolute power.
Where am I going with this in a blog on project management? Towards risk management, and how we manage some of the risks of our fears. We see it (fear mangement) manifest itself in risk attitudes:
- First we have what some call the cone of uncertainty: in a few words, this is simply a metaphor for the temporal aspects of our fears. Close in, we fear the most; farther away (in time and space) we are more optimistic. That's not too hard to understand: farther away puts more options on the table; there's both time and space to deal with alternatives and mitigations. Close in, our options are more constrained by the environment.
- Second, there's the idea of prospective outcomes. Being a prospect brings utility into the frame. Utility is all about perception, and of course perception is a big part of the fear business. Managing perception is in part a marketing issue, a framing issue, and a values issue.
Many of these ideas are captured in "prospect theory", first advanced by Amos Tversky and Daniel Kahneman, two guys I mention a lot in these pages.
There are four main ideas behind prospect theory:
1. Our perceptions are not linear with circumstances; make a small change in circumstance and perception may correspondingly change a lot, or it (perception, or perceived value or fear) may not.
2. Change relative to a reference point is more important than the absolute change. This about the utility of a change in circumstances. A $5 change to a person with $10 is much more important (has higher relative utility) than a $5 change to a person who has $1000.
3. We fear loss of what we have more than we are manic about an opportunity. Thus, we exagerate the possibilities of loss, and underrate the benefits of opportunity (relative to a reference point)
4. How you frame the question prejudices the decision making. Framing a question in terms of loss (or fear) always gets a response. "How much are you willing to lose to have the opportunity of ....?"
Are there any obvious immunities? Sure! The first is awareness of the whole concept: forewarned is forearmed. Second, change the framing; there's always a way to reframe for a less fearful outcome. And, third, get in touch with your real sense of value so that you are not led astray by perceived value or false utility.
Fear sells! Be aware!