The Pendulum Effect: Time, Memory, and Risk Management

Published On:

May 29, 2025

The Pendulum Effect: Time, Memory, and Risk Management

In the world of risk management, our ability to accurately remember and assess past events can be significantly influenced by the passage of time and the natural distortions of memory. This phenomenon, often referred to as bias, optimism, or pessimism, plays a crucial role in how we manage risks.

From my early days in risk management, I observed that stakeholders often carry distorted views of certain risks from project to project. This distortion is not always due to a lack of knowledge but frequently stems from past experiences. About ten years ago, I coined a term for this phenomenon while explaining the concept to one of my classes. I call this the Pendulum Effect. I must apologize if someone believes this is also their concept, but I have not been able, after some research, to attribute it to anyone. In this article, I will explain how the Pendulum Effect impacts our capacity to manage risks and how we can mitigate its influence.

Understanding the Pendulum Effect

A pendulum, commonly seen in offices as a stress reliever, swings back and forth under the influence of gravity. This simple device can also illustrate how our perception of risk changes over time. Just as a pendulum swing to extremes before settling in the middle, our response to risks can be exaggerated immediately after an event and then gradually diminish as time passes.

A Real-World Example

Let’s take a journey back to January 1998. My daughter had just turned two, and we were eagerly awaiting my parents’ visit from Montreal to Toronto for her birthday. Unfortunately, they couldn’t make it due to one of the worst ice storms in history, which devastated Montreal and parts of the Eastern US and Canada. The storm caused over 59 deaths and millions in infrastructure damage. The military was called in to help, and my father, a long-time Hydro-Quebec employee, was asked to assist in restoring power.

This ice storm serves as the initial impact that sets the pendulum in motion. In the aftermath, companies rushed to buy UPS systems, backup generators, and develop business resumption plans. A small economy around these processes flourished as the pendulum swung to the extreme.

The Role of Time and Memory

As years passed, the urgency to prepare for another ice storm waned. Sales of UPS systems and other equipment slowed, and the pendulum gradually returned to a neutral position. The ice storm became a distant memory, and companies stopped planning for such events. About five years later, few companies had accommodations for ice storms in their risk registers.

The Mesmerizing Effect

For those who didn’t experience the storm or don’t remember its severity, the risk seems less significant. However, another storm would push the pendulum back to the extreme, making the risk “fresh” again. This cycle of forgetting and remembering is what I call the Pendulum Effect.

Broader Implications

The Pendulum Effect is not limited to natural disasters. It applies to various risks, including cyber-attacks, fraud, and market fluctuations. Events like the 2011 Japan tsunami, the Three Mile Island incident, and the Chernobyl disaster all demonstrate how our perception of risk changes over time.

The Pendulum Effect in Cybersecurity

Consider the realm of cybersecurity. After a major cyber-attack, organizations often ramp up their security measures, investing in advanced technologies and training programs. The immediate aftermath sees heightened vigilance and robust defenses. However, as time passes and the memory of the attack fades, the urgency diminishes. Security budgets may be cut, and complacency can set in, leaving organizations vulnerable to future attacks. The pendulum swings back to a neutral position, only to be jolted again by the next significant breach.

Financial Market Fluctuations

The Pendulum Effect is also evident in financial markets. Following a major stock market crash, investors become extremely cautious, often pulling out of risky investments and seeking safer options. Over time, as the market stabilizes and memories of the crash fade, confidence returns, and risk-taking behavior increases. This cyclical pattern of fear and confidence illustrates how the Pendulum Effect influences investment decisions and market dynamics.

Natural Disasters and Infrastructure Planning

Natural disasters, such as earthquakes and hurricanes, provide another clear example. After a devastating event, there is a surge in infrastructure planning and disaster preparedness. Governments and organizations invest heavily in building resilient structures and developing emergency response plans. However, as the memory of the disaster fades, these efforts often wane, and preparedness levels drop. The pendulum swings back, leaving communities potentially unprepared for future events.

Mitigating the Pendulum Effect

First having an understanding of what is the Pendulum Effect is crucial for effective risk management. To work against its impact, organizations should:

Maintain Continuous Awareness: Regularly review and update risk registers and plans to ensure they reflect current threats and vulnerabilities.
Invest in Education and Training: Provide ongoing education and training to stakeholders to keep them informed about potential risks and the importance of preparedness.
Implement Robust Monitoring Systems: Use advanced monitoring systems to detect early signs of emerging risks and respond proactively.
Foster a Culture of Resilience: Encourage a culture of resilience where risk management is integrated into everyday operations and decision-making processes.
Learn from Past Events: Conduct thorough post-event analyses to understand the impact of past incidents and apply lessons learned to future planning.

As risk professionals, it’s essential to recognize the Pendulum Effect and reconcile current impacts with potential future risks. By understanding this phenomenon, we can ensure that risks are not just memories but are actively managed. The Pendulum Effect reminds us that while time and memory can distort our perception of risk, proactive and continuous risk management can help us stay prepared for whatever the future holds.

PML would like to extend a huge thank you to Sylvie for sharing her knowledge and wisdom with the PML community! Learn more about her below and reach out to connect!

About the Author

For those who don’t know Sylvie, she has been involved in Project Management in several industries for the past 25+ years. Sylvie previously worked for a top 5 Consulting Firm, where she oversaw projects in the IT, Banking, Health, Government and Securities sectors as well as a Manager in the Risk Management practice.

Sylvie went on to establish her own consulting practice assisting organizations in establishing processes, strategies and developing methodologies. She was instrumental in the development of methodologies for the creation of PMOs as well as for the evaluation, assessment and review of projects in peril.

Sylvie is currently a professor and the coordinator for the Project Management Certificate Program at Durham College. She previously taught at the University of Toronto continuing studies department, assisting hundreds of potential PMP® achieve their certification. She is a frequent lecturer, presenter and blogger (PMWorld360°, ProjectBites, LinkedIn) on all things related to project management. She holds several certifications and has the honour of having been named Fellow of the Project Management Association of Canada (FPMAC).

Sylvie’s involvement with PMI® is long standing including over 12 years on the Board of Directors of the local Chapter where she led initiatives in education, mentoring and held the role of President for two terms. She recently accepted a role back on the BOD for PMI-DHC while still volunteering by becoming their resident “bookworm”, helping people find great reads to supplement their learning about Project Management and everything connecting to it.

If you see her at an event, say hello and get to know her!

Connect directly with Sylvie at https://www.linkedin.com/in/sylvie4sresolutions/

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