Being human means living with risk. You make decisions based on your evaluation of risk when you buy a stock, choose a life insurance policy, gamble at a casino, drive through a yellow light, or take a pill. Both decisive action and inertia have consequences.

Most of us overestimate our ability to understand risk. Even with formal education, the intrusion of emotion, and the number of factors to be considered confound us. There is a pressing need for information designers to study the best methods for presenting risks in an unbiased and useful manner. A few studies provide some direction, but for a topic of such individual and social magnitude, it is amazing that best practices have not been established and adopted.

Few choices are more daunting than being told that you or a loved one needs surgery. If a surgeon says you have a 3 percent chance of dying during a surgery how do you translate that into a useful nugget of decision-making?  Do you picture that there are 100 people in the hospital having the same surgery as you are and that 3 of you die? 97 live? Or, do you picture that your chance of being killed in a motor vehicle crash is 1 in 113 so you are only slightly more likely to die in the surgery than in the car on the way to the hospital? Would seeing an “icon array” of 100 people-like figures with 3 of them in deathly black affect your perception of your own risk?

Risk is a complicated concept. People need to understand Absolute Risk (your chance of developing a disease over a specified period of time) versus Relative Risk (comparing risk in two different groups of people). If I have a 2 in 20 risk of a disease without treatment (absolute risk) and treatment reduces Relative Risk by 50%, it sounds very significant. Is it as compelling when the Absolute Risk drops from 2 in 20 to 1 in 20? Similarly, the popularly used, “Number Needed to Treat,” is a difficult concept to grasp (the number of people who need to take a treatment for 1 person to benefit).

Studies show that humans are quite fallible. We are most persuaded by the last statistic we hear in a conversation (if the doctor describes risks and then benefits, the benefits stick with us). We fall prey to “denominator neglect,” we think 1200 out of 10,000 people having a complication is worse than 24 out of 100 people, simply because we don’t process the total sample size.

What implication does this have for branding? Brands that involve risky procedures or products need to be especially careful naming, marketing, and presenting their offerings. It is easy to take advantage of the universal, human desire for simplicity, convenience, and speed but “faux simplicity” can have dire consequences regarding health, wealth, and safety. Recently, a 10-year-old boy was killed at the Schlitterbahn Waterpark in Kansas riding the “VerrÜckt” waterslide. In German, the name means “insane” and was apt for the world’s tallest waterslide (17 stories tall). However, this park is in the United States, where most people don’t speak German.

Words must be carefully tested with the intended audience. For example, the ubiquitous term “minimally-invasive procedure” suggests to many–no cutting, no bleeding, no complications. In reality, it is surgery, with the size of the incision limited. Similarly, the procedure referred to as “virtual colonoscopy” (CT Colonography) sounds like it takes place on a screen and does not communicate pumping air into the colon via a tube in the rectum.

In finance, a 2012 study by the U.S. Securities Exchange Commission found that many people don’t understand the risks associated with popular “target date funds” for retirement investing even though the principal reason respondents gave for choosing a target date fund was “that it seems like a safe investment for retirement.” Using a date in the name of these funds is a strong hook for investors who want to put their investment on autopilot but contributes to serious misunderstanding. Findings included:

  • Fewer than one-third of respondents were able to identify the correct meaning of the year in the target date fund’s name;
  • Only 36% of respondents were aware that target date funds do not provide guaranteed income after retirement;
  • More than half of all respondents failed to realize that target date funds with the same year in their names do not necessarily have the same mix of stocks and bonds at the target date.

Information designers, plain language writers, and ethnographic researchers need to team up with industry professionals to develop and test informational methods for communicating risk. In this case, perhaps there is no risk, only reward.