Complex humanitarian risk-based decision-making

Humanitarian action is, by its very nature, defined by risk. There are three types of risks that aid actors face: (1) contextual risks that they have very little control over; (2) programmatic risks in terms of failure to meet humanitarian programming objectives; and (3) institutional risks, including fiduciary and operational risks.

To respond to these risks, over the years, most international non-governmental organisations (INGOs) have put in place a raft of internal mitigation measures, including in relation to fraud and anti-terrorism financing. Increasingly, however, these measures are argued to be having a ‘chilling effect’ on humanitarian action. A more recent study confirms this view, contending that risk management across humanitarian response has been reduced to a ‘box-ticking exercise’ that is limiting humanitarian INGOs’ ability to meet humanitarian needs. The work highlights several risk-management traps, including a focus on systems and not people; poor risk forecasting and readiness; and a tendency for humanitarian actors to prioritise compliance over delivery. In other words, the balance of the humanitarian approach to risk management is increasingly tipping towards being ‘defensive’ with the aim of stopping bad things happening, rather than being as ‘progressive’ as possible where the objective is to make good things happen.

So why is risk management in INGOs falling into such traps? Drawing from Barber, part of the problem possibly stems from the complex and uncertain contexts within which humanitarian INGOs operate, where they inevitably encounter risks that are not documented, understood or managed. This may lead to a risk-management capability gap, where INGOs fail to fully understand those risks that may be ‘sensitive, intangible or multifaceted’. To address this gap, INGOs should not rely on risk reporting alone but must ensure ‘shared dialogue and collaborative work across the whole system of the organisation’.

Risk concerns not only the potential for failure, but also missed opportunity where a ‘diet of pure risk aversion will likely lead to extinction’. Risk intelligence, therefore, is the capability to both produce and effectively act upon the intelligence to make better decisions, even under the most uncertain and chaotic conditions.

Risk perception and human behaviour

People everywhere in the world use particular criteria to form their own opinions about risks. It is now generally recognised that it is a combination of cognitive and emotional factors that determine how different people perceive and assess risk. In other words, how people perceive and assess risk is driven by both their knowledge and understanding of different risks and their emotional reaction to risk. ‘Emotions can assist people in managing risk, or they can be a hindrance.’

Understanding the risk perceptions of internal stakeholders, whose differing expectations form part of the internal context of any organisation, is therefore a crucial aspect of risk management. In addition, styles and types of leadership are integral to how organisations make risk-based decisions. Leadership can be either transactional or transformational. Transformational leaders are ‘more emotionally intelligent and less biased’. These attributes account for ‘the generation of a suitable risk attitude and enhance risk-intelligent decisions as compared to transactional leaders’.

How, then, can the concepts of risk perception, emotional intelligence and transformative leadership be put to best use to allow humanitarian leaders to better understand and deal with high-risk, complex humanitarian response? Who better to answer this question, but those leaders working at the forefront of complex humanitarian response. This article is based on original research findings derived from key informant interviews with 12 senior INGO humanitarian professionals working across five different humanitarian agencies.

What humanitarian leaders think

Risk compliance and complexity

Challenging the assertion that risk management across humanitarian response has become a largely compliance-driven ‘box-ticking exercise’, respondents generally did not believe that this is necessarily the case. However, there was clear acknowledgment that an overly compliance-heavy approach is not uncommon. Factors identified that can lead to a ‘box-ticking’ approach included the nature of the risk(s), context and complexity, and the extent to which people have the time and space to meaningfully analyse the underlying nature of the risk(s). As one person commented, ‘when compliance becomes too heavy, you don’t get the insight’.

Echoing previous studies, a number of respondents expressed concerns about the risk of not being able to deliver humanitarian assistance. These concerns were expressed against the requirement to balance concerns related to fiduciary, legal and reputational risks and where these may be constraining organisational ability to ensure timely and principled humanitarian response.

Stakeholder engagement and risk perception

Most respondents acknowledged the need to involve a wide stakeholder group in risk-based decision-making – from direct delivery to global levels, including (in certain instances) at the board level. It was generally noted that risks of a fiduciary, legal and reputational nature tend to draw more stakeholder scrutiny and attention. In relation to risk perception, almost all respondents believed that internal stakeholders rarely share the same perceptions of the risks across humanitarian response. Generally speaking, those further away from the risk (at the regional or HQ levels) tend to have differing (and more often risk-averse) perceptions versus those on the ground. Interviewees also spoke about how the fear of the unknown or generally higher levels of uncertainty tended to drive a broader range of perceptions.

Respondents spoke clearly of the influence that people’s prior lived and professional experience has on risk perception – noting clear differences between those with direct humanitarian experience in crisis contexts and those without. As a general correlation, lower levels of humanitarian experience tend to lead to stronger perceptions of higher risk and uncertainty. Most interviewees asserted that differing perceptions of risk tend to slow down decision-making considerably, while also acknowledging the inherent added value of bringing a range of views and perspectives to the table when complex and difficult decisions need to be made.

Interviewees generally articulated that when shared humanitarian experience that allows a more common understanding of the operational reality of humanitarian contexts is found across different stakeholder groups (and levels), then it is generally easier to bring people together to agree a focus on priority risks, make decisions and agree a way forward.

Communication

When asked about the role that internal communication plays across risk-based decision-making, respondents were generally united in their views. ‘Vital’, ‘important’, ‘huge’, ‘crucial’ and ‘everything’ were all words used to describe the essential nature of internal communication. Specific strategies identified to manage internal communication included ensuring regular coordination calls to share information; investing time and effort to clearly explain the rationale for a particular decision, so that people at least understand why a decision has been taken even if they don’t necessarily agree with it; and using judgement, dialogue and escalation as necessary (where ‘seniority becomes an arbitrator’), in the event that information sharing and communication is not felt to be facilitating timely risk-based decision-making.

Several respondents described how the quality of analysis, better use of data and accurate description of the context have a vital role to play. This includes bringing people together to agree on what the priority risks are and securing that general sense of alignment across different stakeholders. The stronger the analysis, including in terms of priority areas of risk focus, and clarity of purpose in terms of what the response intends to achieve, the higher the likelihood of securing agreement to move forward. This includes progress with stakeholders that may not necessarily have huge levels of humanitarian experience.

Leadership and emotion

Overall, respondents felt that people’s emotional state, including their own and particularly during high-intensity phases of humanitarian response, had a clear bearing on risk-based decision-making. A number of leaders spoke of the importance of finding the space (and time) to slow down and think things through – noting that you generally tend to have more time than you think, and it is important to use this wisely. Respondents spoke about the importance that prior experience plays in helping manage one’s emotions, including being able to better recognise when your own emotions may be part of the problem. There was general acknowledgement that those closest to the crisis will generally tend to have a higher emotional response than those further away.

Respondents referred to the need for honest and authentic leaders with integrity, who are genuinely willing to listen, transparent, and willing to be held accountable for the decisions they make. The ability (and willingness) to understand where differing perspectives are coming from (avoiding echo chambers and herd thinking) and to think about the ‘different elements across the landscape’ was cited as a clear factor for the required good judgement needed to make difficult and complex decisions. Trust, including within the context of organisational culture, was cited by several respondents as being a vital ingredient for agile decision-making under high levels of uncertainty and pressure. This means knowing that the organisation is behind you, or has ‘got your back’, and feeling safe and supported when difficult or tricky decisions need to be made. Respondents also spoke about the importance of empathy and emotional intelligence, which were explicitly linked to an ability in leaders to really listen, which then must be combined with the ability to see the big picture and communicate vision and purpose, and take decisions in a clear assertive manner without alienating people.

Preparedness

Preparedness, or lack of, was cited as a critical factor that could either speed up or slow down risk-based decision-making during humanitarian response. In the former scenario, this includes having (as far as possible) pre-agreed parameters for decision-making, pre-identified roles and responsibilities across stakeholders, and pre-agreed dos and don’ts – particularly around those more challenging areas such as aid diversion. Linked to trust, several respondents spoke about the importance of a preparedness strategy to invest time in creating networks and relationships, which can later be relied upon to move quickly when there is an urgent need to do so. However, respondents also acknowledged that this needs to be balanced against building too much informality into communication lines and ways of working, as this can lead to a lack of cohesion between the formal and informal spaces of the organisation.

What does this mean?

Effective risk management across complex humanitarian response requires careful balancing of fiduciary, legal and reputational concerns with the imperative to act, which must avoid a purely risk-averse, ‘box-ticking’, compliance-based approach. Differing risk perceptions, driven by a range of factors, including stakeholders’ proximity to the crisis and prior humanitarian experience, necessitate open communication and collaboration to support effective and timely risk-based decision-making. Leadership plays a fundamental role, leveraging emotional intelligence and calm decision-making, to navigate complexity and uncertainty and to build trust. Thorough preparedness, including prior establishment of clear roles and core relationships, can be harnessed to facilitate timely informed decisions across broad stakeholder groups when this is most needed.

Figure 1 presents the Humanitarian Risk-Management Capability Framework, pinpointing where the ‘sweet spot’ for improved risk-based decision-making can be found. Optimal conditions (the sweet spot) for improving the speed and quality of risk-based decision-making across complex humanitarian response are created at the intersection of transformative and accountable leadership, communication and collaboration, and balanced risk perception. In other words, optimal risk conditions are created when these three elements are operating in sync.

A context within which risk-based decisions are being considered is not a static one. It is in constant flux, and as the humanitarian response unfolds the process will need to repeat itself again and again and will, in time, generate its own rhythm and momentum, hour by hour and day by day. As momentum increases and rhythm and understanding improve across the three different elements, conditions for improved risk-management capability are thereby created.

What can be done?

Understand and embrace differing risk perceptions

There is an opportunity to draw from the literature to emphasise the centrality of risk perception and its impact on risk-based decision-making, including:

• highlighting the importance of deliberately seeking differing risk perceptions across stakeholder groups, provided this is done in a coordinated manner;
• investing in training to help humanitarian leaders better understand risk perception and their influence on behaviour, including focusing on cognitive and emotional models and how these relate to real-world examples.

Focus on transformative, accountable risk leadership

This can be achieved by utilising existing leadership programmes to emphasise humanitarian risk leadership. Strategies should help leaders address the tension between compliance and humanitarian delivery, while deepening their understanding of the role that leadership has to play for effective risk management in humanitarian response settings.

Invest in improved risk preparedness

INGOs should adapt preparedness approaches to include pre-agreed risk-based decision-making parameters. Advance work to identify priority risks, roles, responsibilities, and specific protocols for high-impact risks (e.g., aid diversion) can save time in high-pressure situations. Preparedness should also involve discussions to address varied stakeholder risk perceptions before crucial time-sensitive decisions need to be made.

Ruairi McDermott is Director at Léaslíne Consulting.