Friday, November 5, 2010

Info Management and Media Relations: Hedging one's bets

Ever played Roulette?

To me, it's an excellent way of teaching people about probability and the psychology of chance.

I raise this because a reader pointed out that the remark about storms that occur "once in 50 years" doesn't mean that the island is innoculated against a storm of such intensity for half a lifetime after such a storm hits.

The deluge could drench the island three times within half a century, or never at all within the next 150 years. This observation is correct, going by the laws of probability.

But most heartlanders probably do not understand such logic. And when the quotable quote is made on-the-record to journalists, it is likely that the man in the street will take the remark at face value.

You cannot blame heartlanders for ignoring probability. Neither should one crucify journalists for using the quote.

Guided by the notion that the storm occurs once every 50 years, people are likely to read the remark literally while ignoring the math behind weather patterns.

I observe similar behaviour whenever I watch people play Roulette. Some gamers will dutifully note down every winning digit, studying with great care the numerals that appear more often and in what sequence.

If you pause to think about things, the probability is the same every time the Roulette wheel is spun. The fact that 17 Black appeared three times in the past 20 minutes doesn't mean this is the lucky number to punt on.

But gamers do it because it's great fun and analysing the numbers gives them a sense of self-control over a game which is ruled by chance. (Some gamers are known to count the number of times the wheel spins before it stops and time the number of circuits the ball makes before it loses momentum, reasoning that these are finite values. They make their bets by watching when the dealer releases the ball, mentally calculating how many rounds the ball would make before dropping and guessing how many spins the wheel would make in the other direction. If only life was that simple.)

Looking at the backlash that followed after people's shops and property were drenched a month after that "once in 50 years" downpour, would you have said that to the media?

That remark is factually correct if you want to point out the drainage system's design parameters. But it should be backstopped by a statement qualifying that weather patterns don't always pan out the way we predict.

The crux of the previous post on information management on nuclear energy points out the danger of making definitive statements. Definitive lines such as "ruled out", "never" and framing a situation to a timeline (once in xx years etc) and so on should be banned from newsmakers' lips. These are the kind of lines that will come back to haunt you should circumstances change.

When I was a business reporter, I noticed that one could tell the media-savvy CEOs and CFOs from the not so good ones just by watching how they fielded questions on their future growth.

Well-briefed CEOs and CFOs tended to use safe harbor provisions to qualify their statements, guiding analysts and the media on the state of play while adding in the same breath the qualifiers that manage expectations. A line as simple as "barring unforeseen circumstances" gives the company precious room to manoeuvre should something unforeseen take place. The 9/11 attacks, for example, threw almost everyone's business models out of the window.

The better CEOs and CFOs don't even use such corporate-speak but couch their replies in layman's language which made them sound perfectly logical, while innoculating their company against public relations gaffes should they somehow fail to deliver.

They know how to hedge their bets - making them formidable players should they ever step into a casino.

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