New book on lessons from catastrophes

By: Matthias Catón
24.01.10 One of the notable and timely recent publications is a book called "Learning from Catastrophes: Strategies for Reaction and Response". The book looks at how we handle all sorts of crises and minimize their impact. It has been published by Howard Kunreuther and Michael Useem, two professors at the Wharton School of the University of Pennsylvania, one of the world's leading business schools. I got to know Howard and Mike when they co-chaired the World Economic Forum's Global Agenda Council on the Mitigation of Natural Disasters in 2008/09, which I was managing on behalf of the Forum at that time. The book is a direct result of the Council's work, with most members represented among the twenty-two authors. The book is based on the assumption that societies frequently underestimate risks that are very improbable to happen but have huge consequences if they do occur. To enhance our risk preparedness the authors focus on the connection between risk assessment and risk perception and the willingness to act ahead of a potential catastrophy. In their introductory chapter Kunreuther and Useem outline seven guiding principles that can be applied to any kind of risk. The principles center around the critical connection of the right assessment (analytical capacity) and appropriate action (leadership capacity). In the second chapter, Harvard's Dutch Leonhard and Arnold Howitt introduce a comprehensive framework for risk-management. They analytically split a catastrophy into three phases: prevention and mitigation (before an event), crisis management and response (during an event) and recovery (after an event). They argue that careful thoughts about the right investments in all three phases are required well in advance and that resources should be allocated to minimize the expected net present value of damages. Part II contains six chapters that link risk assessment, perception and management looking from different angles. Part III focuses on application, featuring some case studies looking, for example, at financial issues, terrorism and pandemics. The book concludes with two chapters on leadership and long-term issues. Of course, nobody knew that the publication date would coincide with the terrible earthquake in Haiti, but the issues raised in the book are fully relevant to the situation there and it will be a useful source of information when discussing how the consequences of such disasters can be made less severe, if not fully averted. Howard Kunreuther and Michael Useem (eds.) 2010: Learning from Catastrophes: Strategies for Reaction and Response. Philadelpia: Wharton School Publishing.

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