‘Hierarchical Smoothing’ is a term with a specific meaning in statistical modelling. In a Sir Humphreyish aside a few years ago, a civil servant at conference I attended mentioned that it was also a term of art within government departments.
Essentially, it signifies the dilution of bad news as it travels upward within an organisation, as each layer seeks to make it more palatable to those to whom they report. The net result of this is that badness of bad news is progressively diminished as it rises so that by the time it reaches the final layer, the Minister, or the Board, the bad news has become so scrubbed, cavilled and euphemised that it is no longer accurate as a guide to useful decision making.
This is not a healthy outcome. Pressure to do this is not unknown to risk managers either, nor is unusual for risk managers to see evidence of it happening in layers further down an organisation.
One to watch and control for.