Managing Your
Public Risk

March 2000

Digital Deliverance or Deception?

Statistics can be very helpful in managing risks. They can also be used to hide major risks from the uninformed. Managers need to see through any ignorance, error or deception that can easily lurk in the numbers or graphs.  You don’t have to be a statistician: common sense and simple math are all you really need.

Data must first be analyzed, interpreted and presented before management can use it.  (A diagnostic control function - see MYPR October 1999)  Each step requires action that can introduce errors or allow manipulation.  

Data are meaningful only in context – if you don’t know the subject intimately, get some trustworthy help fast!  You should always be wary of sources – ask who, what, when, where, how?  Have definitions changed? (See MYPR June 1999)  Beware if the source is an interested party or is not shown.  Make your own rough estimates.  Read the fine print and watch for words like ‘estimated’ or ‘suggests.’ Surveys and polls require special attention. 

It is easy to confuse requirements or goals, which are the voice of the ‘customer’, with variation, which is the voice of the process. Similarly, signals and noise must be separated: don’t waste your time on the latter.  It is not enough that your process meets specs – your managers must also know how their input affects that compliance. 
Managers should be sensitive to the fact that improper goals can easily cause distortion in the system or the data, especially if there is a strong incentive (positive or negative) to meet goals. The temptation to misrepresent outcomes can be very high – even among otherwise ethical people. 
Graphs are useful, but they too can be distorted: if the vertical axis doesn’t begin at zero, stop right there.  If a formula seems complicated, get an explanation. If you still don’t understand, assume it is too complex.  Simple is usually better.  Even good stats are rarely a precise account of anything: they are a representation of the truth but not truth itself.

Ask questions, check everything and take nothing for granted. It is your duty to ensure statistics are not misused, especially if the safety of an innocent and trusting public is at stake.  Good statistics can provide deep insights, but they can never replace the wisdom born of a healthy degree of skepticism.

Recommended Reading for Risk Managers  

Understanding Variation: The Key to Managing Chaos by Donald J. Wheeler. Don’t be put off by the hyperbolic subtitle: this concise little account on interpreting statistical process information delivers.  So does Misused Statistics (Second Edition)  by Herbert F. Spirer, Louise Sprirer and A.J. Jaffe. The latter is a treasure of techniques for seeing who you can trust and who is trying to bamboozle you with numbers. Both are mercifully short (135 pages and 263 pages respectively) and seasoned with cultured wit.  Both illuminate the subject brilliantly to help you separate your statistical signals from the noise. 


As a professional pilot, Murphy’s first exposure to statistics was the strong desire to avoid becoming one! 


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Mike Murphy spent 17 years (78-96) with Transport Canada, his last five as Regional Director General, Aviation in Winnipeg.  Originally trained as a professional pilot, he is the author of an internationally acclaimed 500-page report entitled "An Evaluation of Emergency Response Services at Airports in Canada," currently in its second revised edition (August 1999) and is undergoing a  third major revision.  He is also the Chairman of the Air Passenger Safety Group (APSG) , a Director of Transport 2000 Canada,  a Director of the Ottawa Chapter of Christian Businessmen's Committee (CBMC) and the Secretary General of the Peugeot Club of North America (PCNA).  

In his volunteer role at the Air Passenger Safety Group, Murphy has investigated and found several air safety documents that misused statistics to make points that had nothing to do with aviation safety.  It requires a bit of detective work, but can be satisfying when the imposter is finally exposed.  He is of the view that if everyone read statistical reports with a skeptical eye, the authors of such dubious reports might mend their dubious ways.  Challenge and dialogue are integral to good risk management.  Murphy welcomes the challenge of any idea or statistic posted here. 

(Available in Word 97 by email or by fax from):

e-mail: Michael Murphy

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