Approaches to Risk Management in Innovation

In the past I have argued the need for a risk management approach to the exploitation of innovative services. This approach formed the basis of an invited talk I gave on “Library 2.0: Balancing the Risks and Benefits to Maximise the Dividends” at the Bridging Worlds 2008 conference held at the National Library of Singapore. The paper I presented was subsequently published in the Program journal: “Library 2.0: Balancing the Risks and Benefits to Maximise the Dividends“. Note that this paper is available in MS Word, PDF and HTML formats from the University of Bath repository.

The paper focussed primarily on the risks associated with use of Cloud services.  However there are associated legal, copyright and related risks which need to be considered.  Professor Charles Oppenheim contributed to a paper on “Empowering Users and Institutions: A Risks and Opportunities Framework for Exploiting the Social Web”  which built on this previous work and outlined a risk assessment and risk management approach for copyright risks. Again this paper is available in MS Word, PDF and HTML formats).

These papers argued the need for a risk-based approach and proposed a framework for understanding and documenting the risks, understanding the associated risks of doing nothing (e.g. missed opportunities), the associated costs and ways of minimising risks which have been identified.

This framework, which is intended to support the discussions and production of  documentation for development activities, acknowledges that there is a context to such decision-making, with organisations likely to have differing perspectives on risks: a government organisation is likely to be more risk-averse, for example, than an innovation company funded with venture capital. In addition different contexts of use  will require different approaches to risk assessment: whilst many users  will be willing to use a Social Web service to host photographs and videos, the same users may not wish to see their payroll system out-sourced in a similar fashion!

The JISC-Funded Risk Management Calculator

However our work did not provide a tool to support these processes. I was therefore pleased to receive an email today which announced a “New licensing tool for open content“. The announcement stated that

Licensing is complex and the more open you make content under an end user licence the greater the risk if you havent sought the necessary permissions. In partnership with the Higher Education Academy, JISC is funding a support project on IPR and licensing issues for Open Educational Resources. The latest addition to their suite of support resources is a new tool – the Risk Management Calculator  designed to help understand levels of risk associated with publishing open educational materials.   Typical examples of this might include materials which are still in copyright, but for which the rights holders cannot be traced or are unknown (so called Orphan Works).  The calculator helps those relatively new to licensing to make the right decisions when creating open content.

Naomi Korn, the project director for this work,  described how:

The Risk Management Calculator is a good example of the way the OER IPR support project team works: a marriage of copyright and licensing expertise with a group of immensely talented staff from the technology enhanced learning team at Plymouth University creating tools that users can use to help them understand and do copyright and licensing better.

The risk management calculator is available as a Web-based tool and an example of its used is illustrated below:

I think this is a valuable tool which should help to embed a risk management culture in development activities and move away from the simplicities of policy-based approaches  which can hinder innovation at a time in which rights issues can be complex and gaining permission can be costly and time-consuming, if  not impossible.

What are the risks, I wondered, if I wished to publish a video of a conference in which members of the audience may be identifiable?  It might be expensive and time-consuming to identify such people, track down contact details and seek permission. In such cases a risk management approach would appear appropriate. However using such a video and providing a Creative Commons licence for the resource will give a medium risk rating of between 180 and 450, although not assigning a Creative Commons licence would give a low risk of 90.

Now when I look to reuse photographs, for example, I check to see whether any identifiable individual might be embarrassed by the photo (are they picking their nose) – so there additional contextual issues which the calculator doesn’t address.  But seeking to include such factors in a tool would be likely to make the tool cumbersome to use as well as costly to develop.  So I welcome the release of this tool, whilst providing a suggestion that the decisions need to be taken by a human and not determined by the rating provided by this tool.

Note it is also worth making the point that the selection of a Creative Commons licence is likely, in many cases,  to be more risks than not assigning such a licence.  It would, I feel, be unfortunate if this tool acted as a barrier to greater use of Creative Commons.