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One a penny, two a penny ...

Honestly Lay Bare and Mrs Honestly Lay Bare have a beautiful, loved, loving and very, very, very, very special 20 month old daughter.

Little Honestly Lay Bare has just discovered the joys of hot cross buns.

In this Easter edition we will look at what Little's love of hot cross buns teaches us all about risk analysis.

A hot cross bun, or cross-bun, is a type of sweet spiced bun made with currants or raisins and leavened with yeast. It has a cross marked on the top which might be effected in one of a variety of ways including: pastry, flour and water mixture, rice paper, icing, or intersecting cuts.

In many historically Christian countries, buns are traditionally eaten on Good Friday, with the cross standing as a symbol of the crucifixion. They are believed by some to pre-date Christianity, although the first recorded use of the term "hot cross bun" is not until 1733.

It is believed that buns marked with a cross were eaten by Saxons in honour of the goddess Eostre (the cross is thought to have symbolised the four quarters of the moon).

English monarchs saw the buns as a dangerous hold-over of Catholic belief in England, being baked from the dough used in making the communion wafer. Protestant England attempted to ban the sale of the buns by bakers but they were too popular, and instead Elizabeth I passed a law permitting bakeries to sell them, but only at Easter and Christmas.

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And it turns out that hot cross buns are a great analogy for the deficiencies of modern risk management.

How?

Well - a sweet spiced bun made with currants or raisins and leavened with yeast WITHOUT the cross is by a large margin a LESS popular item in a bakery than if the sweet spiced bun made with currants or raisins and leavened with yeast that HAS a cross on it. (Authority: Honestly Lay Bare's mother in law's local baker!).

Yet - aren't they the same product and isn't the cross merely superficial dressing?

A rationale eye would suggest that they are in the sense that the product - with or without the cross - fulfils the same basic need, being that of nurishment.

And therein lies the link with risk analysis.

Often risk management frameworks look at similar events, issues, products, controls etc and assume that they perform the same function in the same way that a rationale eye assumes that a bun - with or without a cross - performs the same function.

What is missing, however, in such frameworks is that nearly identical events, issues, products, controls etc can have fundamentally different outcomes and yet our bias draws us to another conclusion.

It is difficult to propose what mechanism we could put in place to correct this bias.

Perhaps no formal mechanism is needed as such and all we need is to self acknowledge that such bias exists.

In doing so not only do we take our risk analysis to another level but - sadly for the discipline of risk management - we call out its inherent weaknesses.