Managing risks beyond the product

Without risk, there is no opportunity.

Any business, any organization–even any individual person–will face their own responsibility for identifying risks, assessing the probability and consequences, and managing the risk to the best possible outcome. Some people are better at it than others, and some firms are better at it than others.

Designers can find themselves in a position to identify and assess risks that are incurred when the product meets the public, often before anyone else, but taking action to manage these risks requires added perspective.

Risk in the organization

The field of Risk Management has developed as a rigorous, quantitatively rich practice within many organizations that leads the charge of identifying potential risks, assessing their impact, and managing them through tools like internal policy changes, strategic activities, financial instruments, or insurance policies to name a few.

There is much to be said on the types of risk affecting an organization, however for a firm with a consumer-facing product, one of the risks with the highest consequence is Product Failure Risk. If the product fails to operate properly and this results in harm to the user of that product, then it could be examined to see if the firm is legally responsible for that harm. To determine legal responsibility, the court would first determine if the firm had identified a better design for the product at some point, and secondly whether the firm made a decision not to implement it. It is worth noting that, in the legal context, a design decision is really anything impacting the product and service experience, not just visually-impactful or brand-reinforcing design decisions.

Businesses typically assess product failure risk from the perspective of the firm: if the product fails in market, what’s the likelihood that there will be consequences and how severe could those consequences be? This insular perspective, evaluating risk only in the context of the firm itself, is reinforced by the concerns of multiple parties. Investors may be concerned that a product failure will jeopardize their likelihood to see a return return. Managers will be concerned that this will affect the bottom line. Marketing and Sales leaders may be concerned that this will affect the brand and reputation.

This risk is typically managed by enforcing a feedback-rich and effective product development methodology with with rigorous internal and external quality control. This assures that the best possible product reaches the market.

MBA students around the world are steeped in this perspective and take this approach with them as they lead organization.

In reality, there is further complexity to the landscape.

Designers see beyond the firm

Most effective design organizations have an intrinsic commitment to identifying, assessing, and managing risks. This is ingrained in to the organization through the use of a feedback-rich product development process that helps identify potential risks, assess their severity, and develop strategies for managing them before the product is developed for the market.

In any scenario where a designer gathers feedback on a work in progress, this work can be evaluated against the risks facing the firm. More than most disciplines within an organization, designers are uniquely positioned to identify the probability and severity of harm that a product can inflict on users and other parties. The design process, done well, absorbs much of this need for risk management.

In launch of a product, especially in the field of consumer-facing software that typically includes pilot launcehs, beta programs, user acceptance testing, and other observational methods, Designers are often faced with a conundrum. In using the product successfully, another problem may be created.

In using AirBnB correctly, hosts contributing to shifting real estate market conditions by setting price points that make AirBnB rentals more attractive.

In using Facebook or YouTube correctly, individual users may be radicalized when algorithmic recommendations exposed them to content that built upon their outrage.

Both of these examples are not product failures–AirBnB, Facebook, and YouTube all function properly. However in operating properly, these products have, in turn, inflicted harm.

Handling the moment when the risk of harm is identified

A Designer’s handling of this discovery is critical. In many cases, my own career included, the Designer is often cast as a Cassandra within the organization, warning whoever will listen, but rarely believed. A friend of mine put it well, “I feel like the scientist in the Godzilla movies who figures it out before everyone else, then runs around yelling and dropping his papers.”

Many designers and design leaders have felt the same way. When designers talk amongst themselves, much emphasis is placed on working in “the right organization” or one that “listens to designers.” The question remains, are the designers speaking the language that is needed in order to be heard?

In order to communicate the risk of harm effectively within the organization, any discovery of harm calls for answering a few questions.

  • If harm is discovered, is there a venue for articulating identified risks back to business leaders? If not, then why not?
  • Is the risk of harm communicated through factual observations?
  • Is the impact of the harm understood? Is the probability and severity of the harm understood? What are they?
  • Is the harmed party a willing participant in the transaction? Or is the harm inflicted through externalities?
  • Does the impact of the harm translate back to the company’s strategic goals? Does it jeopardize activities central to the company’s strength? Does it jeopardize differentiation from competitors?
  • Are there recommendations for reducing harm? Is the origin of the circumstances understood? What are they?
  • Do you have a recommendation for the timeline of addressing this issue? What questions do you (designer) need answered to make a recommendation?

The question is often where the firm’s responsibility ends, and whether the harm inflicted through the product or resulting externalities should be addressed. Framing an identified risk in this manner–as something that starts externally but comes back to the firm–can help designers be more effective at benefitting their users while providing opportunities for the firm to build lasting benefit and value for their customers.

I wouldn’t call it a fair fight

Unfortunately, this is not the norm and is not internalized for most organizations. Addressing potential harm is often dismissed. It’s a matter of company culture and leadership principles. Addressing harm is often seen as capitalizing on opportunity rather than righting previous wrongs.

This perspective is endemic in academic and legal perspectives on business. I asked a business professor, “what happens if there is risk created by the proper use of the product?” and was met with an ambiguous answer, “in the event of externalities, regulators typically step in.” This professor provided an excellent class that has greatly improved my understanding of risk; to be clear I am not offering an indictment of the professor. Instead, consider that academics and business leaders alike view the firm’s responsibility as having a tighter barrierFacebook and AirBnB actively avoid addressing

To that end, I don’t think there can be any realistic expectation that corporations will be held liable, legally or culturally, for the harms their products inflict on the economy and society. Oil firms will not be held responsible for pollution to the degree that it has impacted our climate. Firearms manufacturers will not be held responsible for harm in gun violence. Will tech companies be held responsible when their products are used effectively to nefarious ends? I don’t expect it.

Nonetheless, Designers have an opportunity, perhaps a unique opportunity, to lead the charge within organizations in launching products that achieve objectives while eliminating or minimizing potential external harm.