'Not in my term of office'
Q: This week's nuclear summit presents one of those difficult leadership challenge: focusing attention and resources on a low-probability problem that would be disastrous if it occurred. Global warming, 100-year floods, financial meltdowns are other examples. How can a leader fight the natural tendency among followers to put off dealing with what seem like such abstract and complicated threats?
"Not in my term of office" - NIMTOF - is one of those predictable human tendencies, and one that unfortunately is as widespread and as it is pernicious. Its first cousins are common as well: If we perceive the likelihood of a disaster to be below some arbitrary threshold of concern, we assume, "It won't happen to me -- at least not on my watch."
We seek confirming evidence and ignore conflicting data. We focus on a disaster only after it occurs -- but not long afterward -- and we avoid preparing for or preventing future catastrophes because the event is not salient to us anymore. Many homeowners, for example, purchase flood insurance only after suffering damage in a flood and then cancel their annual policies when several years pass without flood damage. Consider one such flooding event in northern Vermont in 1998. Of the more than 1,500 victims of the disaster, FEMA found that 84 percent of the homeowners in flood-hazard areas did not have insurance - even though 45 percent had been required to purchase such coverage.
The art of leadership includes preparing for the unexpected, and the value of leadership thus becomes more important when the world becomes more unpredictable. Leaders face special challenges with respect to low-probability, high-consequence events: By definition, they occur rarely and are especially difficult to predict.
Preparing leaders in advance of catastrophes is an essential step for prevailing over them. One of the first obligations of leadership is to recognize our behavioral shortcomings and create means of reducing the impact of the worst of them.
One way of doing this is to transform dry statistics into graphic dangers. The chance of a 100-year flood occurring over the next year is just one percent. But the chance that such a flood could severely damage a home over the life of the home ownership -- say 25 years -- is greater than one in five. People will pay more attention to an event that is presented in terms that make it appear to be more likely to occur.
In normal times, our natural shortcomings are worrisome and grating but usually not perilous; in catastrophic times, such flaws can become magnified and dangerous, as evident in the avoidable loss of life and damage in the 2005 landfall of Hurricane Katrina and the preventable failure of American International Group in the 2008 financial crisis.
Taking steps to anticipate and transcend human shortcomings is one of the responsibilities of anybody in a leadership position. The calling of President of Barack Obama and other leaders at the nuclear summit is to graphically, tangibly, and starkly persuade all of us that the threat of a nuclear night -- the mothers of all catastrophes -- is low the but the consequences of such an event so enormous that NIMTOF and our other behavioral shortcomings must be recognized and overcome now.
Note: This post was co-authored with Howard Kunreuther, professor of Decision Sciences and Public Policy at the Wharton School, University of Pennsylvania, and co-director of the Wharton Risk Management and Decision Processes Center. He wrote previously about 'Overcoming our disaster myopia in Haiti.'
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