The M-Spot: 1 soldier or 20 schools?

We should all be looking for the “M-spot” to answer the perpetual question of how much mitigation is enough? Whether managing change or crisis we should hope to mitigate vulnerabilty. Some not-so-scientific thoughts follow…

In my classes, I sometimes compared a dimension of mitigation to straightforward community development. Starting with HAVUC, any potential threat to a place [could be a neighborhood, business, multi-national NGO, nation-state, or whatever], created a contextually and environmentally-driven vulnerability profile, that in turn could be offset, partially or completely, by building in the capacity to neutralize the hazard:vulnerability scenario. Thus HAVUC. Overly simple of course, but it’s a starting point. If nothing else, it presses us to think of the traditional emergency management term “mitigation” as a function of capacity within a defined situation, which in turn brings up a broad range of developmental and “capital” possibilities.

The idea evolves from the marginal cost:marginal revenue curve we all learned about in Econ 101. Theoretically, as the curves moved across the graph, approach a nexus, the change in cost of each new widget would be slightly less with slightly more revenue to cover costs and profit. When the curves crossed that point equaled the optimum level of production.

In a giant leap, adapting this basic concept to capacity building creates a sort of thought experiment. In simple financial terms the more money we pour into mitigation the more we should be decreasing risk, and thereby adjusting vulnerability. We keep doing this until some optimum point is reached where vulnerability is nil, or at least some level we can live with [usually determined politically]. Numerous questions arise: how do we understand capacity in non-cash terms? Can it be quantified? How do we measure marginal change in impact? Who decides what effective means? Where does social capital fit?

What’s the difference between vulnerability and risk? Risk is useful but only goes so far in these scenarios. See Against the gods for an excellent take on this. Bernstein eventually gives up on the precision of probabilities. Even our intuition tells us at some point that quantifiable answers won’t save the world. Where we stray along this line of thought is in thinking that we can actually manage risk. We can’t. But we can manage vulnerability, at least by paying some attention to things like the admittedly simplistic HAVUC algorithm, and asking how these things work more systemically.

Decision makers are always balancing the cost of capacity building (or mitigation) against results. The change agent in an organization is constantly juggling culture, social capital, threats and vulnerability. Read Kristof’s recent blog in the NYT. Even the title breathes HAVUC – “1 Soldier or 20 Schools?”.

Is there an M-spot here? Can some combination of soldiers and schools sustain a community until a better combination comes along?

About Wes Balda
Dr. Wes Balda is President of the Simeon Institute and prior Executive Director of the Oregon Business Institute at the University of Oregon. He also led the Centre for Advancing International Management [AIM Centre] and was Professor of Management at St. George’s University. Previously he was Dean of a School of Management in Oregon, and Director of Executive and PhD Programs at The Drucker School, Claremont Graduate University.

  • http://www.husdal.com/ Jan Husdal

    Interesting…
    While I have always argued for a trade-off between the costs of disruptions versus the costs of mitigation, I have never looked at it in economic terms, and never like in your figure, with the social capital included. That is a new approach I haven’t seen before.