AUGUSTA, Ga. (WJBF) – The Means Report takes a look at life beyond the COVID-19 pandemic and the transition that we will all make as we return to our former lives. It’s going to involve a lot of risk and we need to figure out how to assess that risk, so that we can take the right approach during that transition. To help figure that all out, from the Hull College of Business at Augusta University, is Roger Duke.
Brad Means: Roger, thank you for joining us and for helping us as we make these tough choices. We appreciate it.
Roger Duke: My pleasure.
Brad Means: So here we go, we’re trying to decide when and how to go from being in our pajamas all day to going back to some sense of normalcy. You say that with different people comes a different level of risk appetite. I had never heard of that before but I know I’ve felt it before. What is risk appetite? And while you’re answering that, how do you define risk?
Roger Duke: Risk appetite is simply the willingness to accept risk. And what point I want to make for everybody, is that everybody’s risk appetite is different. It’s not wrong, it’s just different. And so, everybody has a different willingness to accept risk but an interesting thing that I learned as being a project manager, is what is the definition of risk? If I ask a person, could you take a risk today? Nine times out of 10, they’ll say, “I drove my car.” Well, driving a car is not a risk. A risk is defined as an uncertain event. And so, driving a car is certainly something that they had planned to do but having that wreck is the uncertain event. So, a risk is the uncertain event. And I think, what we should talk about today would be an uncertain event, which would be catching the virus.
Brad Means: Yeah, I mean, we know that we have to go back. If the boss calls and says the office opens on Monday. Be there. You have to be there. So, if returning to work isn’t the risk, you’re saying it’s of going back out into the world and catching the virus?
Roger Duke: That’s right, the event is the risk. So, one thing you need to do before you create a risk management plan is to define the risk. So, most people right now are defining the risk, as they do not want to catch the virus. So, catching the virus is the risk.
Brad Means: Well, how do you mitigate that? How do you make sure that you’ve done everything you can before you take that first step to protect yourself and really, by extension, your family?
Roger Duke: Well, risk is simply a combination of two terms. Probability and impact. So, if you look at each event, you would then say, what is the impact associated with that event? And, of course, it would be different for different people. If you’re a senior citizen living in a nursing home, the impact of catching the virus would be, could be totally different than if you’re a healthy 20-year-old. So, you must determine what is the impact to you and then you say, what is the probability of catching the virus? And then you combine those two factors, then you wind up with a measure of the risk and for a person with a large number of factors to catch the virus, that might be a very high impact, medium probability but a high risk compared to a young individual who may not have those high risk factors.
Brad Means: I’m sorry to cut you off, I was just going to say, so let’s try to reach some sort of place where we have piece of mind when we accept this risk and we go out and try to navigate the real world once again. Can we do anything, Roger, before we leave our homes to reduce the probability that you talked about or lessen the probability that something bad’s going to happen?
Roger Duke: Absolutely. The stay-at-home order was an attempt to, for everybody to avoid catching the virus, totally avoid it but we had to go out to go grocery shopping
Brad Means: Mm-hmm
Roger Duke: So one thing you could do to reduce the probability would be to go when it’s not crowded. So, you might pick time where there’s not a crowd. Then you might choose to wear protective equipment. So, you just need to decide how much, and what kind of protective equipment you want to use. So that would reduce the probability of catching the virus. It does not affect the impact but it reduces the probability. So to get out, what I would strongly suggest is that you’ll look at things that could mitigate the risk by reducing the probability.
Brad Means: What about the impact side of things? How can we make sure that whatever happens to us doesn’t happen to the loved ones in our lives? You have a couple, one does the risk assessment and goes back into the real world but something happens, that impacts that household. Should we, once we do return to work, for instance or school, or church, or restaurants, stay separated from our families in the house to make sure we don’t infect them? Is that a way to reduce the impact?
Roger Duke: There are always numbers of ways to reduce the impact. Again, you’ve got- well, what is the impact? For a family that might be in that situation, the impact might be getting sick and not being able to go back to work. So, you might want to avoid contact at work, minimize contact at work so that you reduce the probability, you reduce the risk, and you reduce the impact of not being able to return to work.
Brad Means: It sounds like it would be easy, and you tell me if I’m thinking about this the correct way, to come up with an actual response plan. Before you even make that first move, to write down some of the things that you’ve talked about. Probability; impact; risk assessment. And really look at pros and cons. Is that kind of a good way to get a road map for all this?
Roger Duke: Absolutely. The whole goal of this is to create that response and once you’ve, look, keep it simple Brad, that’s the whole point I’m trying to make, is don’t mix a whole bunch of different risks together. Just focus on one risk at a time. It could be a health risk, it could be a financial risk, it could be a spiritual risk but just focus on one risk to find the probability and the impact, based on your risk appetite, and then look at your responses. Then you’ve got four choices. You can either totally avoid it, which is [what] the stay-at-home policy was supposed to do. You can transfer the risk. Instead of both of you going out to go grocery shopping, you send one person out to go grocery shopping. You can mitigate the risk by wearing PPE or you can just say the heck with it and accept the risk. So you would go through this process of measuring the risk, define the risk and assessing the risk, and then pick your response that you’re comfortable with. And if you’re limited to those four choices, you’re going to then decide which way you want to go but you got to close with one thing. And this is what the country’s going through right now and that is, what is the cost of your response vs. the benefit? So when you’re done doing that cost-benefit analysis, it’s really important.
Brad Means: You’re also big on acceptance too though, Roger, once you’ve gone through all of these things on your checklist and you’ve made your move, you, kind of, have to accept the outcome, right?
Roger Duke: Absolutely. You’ve made some assumptions. There are things you believe are going to be true. You must- well, once you’ve gone through this process and that’s what I like about the process, is a logical way to get to an answer. Once you’ve arrived at an answer, you have to accept your assumptions and then execute your plan. Once you execute your plan, there’s still probabilities. You’re not perfect, okay. It’s not going to totally prevent you from getting it but you’ve done everything you can to make you feel comfortable to implement that response plan.
Brad Means: Yeah, I think that’s they key takeaway here, too, Roger. If you do everything, if we do everything you’ve recommended we should probably be able to walk away knowing that we’ve done everything we can to make a smart decision as we all go through this re-entry. I told you our time would fly by. I knew it would.
Roger Duke: It did.
Brad Means: I’m so grateful for your advice. I know a lot of viewers appreciate it too, Roger Duke.
Roger Duke: Well, it’s been my pleasure, Brad, and I hope it’s been some help.
Brad Means: It’s been a huge help, for sure, and I know people will take this advice and use it immediately. Roger Duke, from the AU Hull College of Business, we appreciate you.