On our annual canoe trips down the Guadalupe (close and charming), Devils (aptly named), Pecos (my favorite), and Buffalo (in Arkansas, yet surprisingly pleasant) rivers, I immediate sidle up to my buddy Russell whenever the thunder starts rumbling. Russell survived a lightning strike while rock-climbing in New Mexico many years ago, and I figure the odds of him getting zapped again are pretty much nil.

Of course, my figuring is completely wrong – which means I probably could oversee the vast majority of corporate natural disaster preparedness programs. My thinking is a prime example of the “Gambler’s Fallacy,” a misconception that recent events will affect future events. If I flip a coin and it comes up tails seven times in a row, what are the odds that the coin comes up tails on my eighth flip?

Before you answer that, answer me this: Why do so many business continuity management (BCM) programs suffer from Gambler’s Fallacy, denial, and other human psychology-related shortcomings? It’s a question that continues to frustrate and fascinate me, as I mentioned last month in the wake of swine flu’s official downgrade.

Happily, FM Global is extremely interested in addressing this question.

The company’s new report, “Flirting with Natural Disasters: Why Companies Risk It All,” examines the role psychology plays in BCM efforts (and more specifically, natural disaster preparedness). It’s an engaging read, and one designed to get risk managers to ask about their program’s capabilities, shortcomings, and maturity … a fitting mission, given that the Gambler’s Fallacy is also known as the Fallacy of the Maturity of Chances.

Speaking of which, the coin-flip answer is 50-50. I expect more than half of you knew the correct answer. Now that I do, I’m afraid Russell will have to find a new paddling partner next spring. ###