The Ice cover – the ideal metaphor for risk

As soon as the temperatures fall below zero, an ice cover forms on water. In standing waters faster than in wild ones. Over time, more and more ice crystals arise and the ice cover is getting thicker. The rule of thumb indicates that a single person can enter an ice cover of at least 5 cm. About 18 cm is sufficient for cars to go onto the ice surface. From the shore you can neither see the bearing capacity nor the depth of the underlying water. Whether and where it is safe is pure speculation. In this respect the ice cover is similar to a risk.

Although it is possible to imagine ice covers and risks, it always is only estimation whether the worst will happen or not. In both examples, the following aspects should be considered.

  • Probability
    In all cases, the probability of occurrence is 100% as soon as the worst happens and the risky initiative fails, which actually is no longer a prediction – be it crossing a frozen lake or building a new airport. A reliable prediction is possible, if you even do not put yourself in that danger. Then the probability of occurrence is 0%. The remaining incidents can not be predicted reliably in terms of time or space. There is no choice but to prepare appropriate contingency plans depending on the foreseeable case. Hedges on the ice cover can be a safety rope or a prepared ladder, which bring you out of the danger zone. In business, appropriate measures are put in place to reduce the occurrence probability. Alternatively resources are prepared to counteract in the event of a crisis by shortening the damage duration and reducing the damage.
  • Possible damage
    The consequences of an adverse event differ according to their level of damage. An incident can in the worst case cost the life – by drowning in the water, because you can not breathe in the required time frame; or when you lose in business due to wrong speculations, because you have misinterpreted the signs of the times, ignored the Internet with your mail-order business and eventually the entire company faces bankruptcy. If there is no incident, then the potential size of the loss does not matter. The actual damage that can occur between these two extremes is hard to predict, because most of the time you cannot see the real consequences. The size of contingency preparation depends on the player in the decision maker – more or less rope and ladder on the ice cover or provisions in the business.

Dealing with the thickness of the ice cover and risks burdens. On the one hand, you are hampered by a rope and burdened by the transport of the ladder. On the other hand, resources are blocked in case of the worst and thus are no longer available for daily business. In both cases, preparation ensures viability.

Bottom line: Dealing with frozen waters and with risks consists of similar issues. On the one hand, it has to be estimated what the probability of an incident is. On the other hand, the possible amount of damage has to be assessed. Both are estimates that could be wrong. From the outside, the ice surface gives no indication of possible dangers. Exactly as the daily business does not provide indicators that it can come to a surprising slump. It is irresponsible when no presuppositions are made, because then you will be surprised by the harmful event – you break in the ice or suffer serious business losses. These similarities make the ice cover the ideal metaphor for a risk.