I have written previously about how people appraise risk and also the dangers of ‘Groupthink’ – the phenomena where a consensual reality is created by teams and organisations that can exclude valuable corrective feedback. Recent experiences have brought this notion back to my mind.
It is quite remarkable how once a group is established it can be dragged down to the lowest common denominator and, in terms of risk, this can often equate to the perspective of the most frightened and paranoid person in the group.
Is your approach to risk one of catastrophising?
You may have heard the saying that people make decisions emotionally and then justify them rationally. This can often be the case in risk assessment situations. Those who make their decisions on a fear-based world-view may dress such decisions up in the superficial garb of reason and persuade others that their assessment of the situation is actually based upon a logical assessment of the facts. This may very well not be the case but if that individual manages to carry the day the more balanced opinions of others may be swamped by a tidal wave of fear.
The experiments of researchers such as Solomon Asch show how easily individual clarity can be dangerously seduced by group pressure even on matters as simple as which of a number of drawn lines is longest, or the result of a simple mathematical calculation. Such insidious group pressure can be even more devastating to clear headed thinking when it comes to subjective issues such as appraisal of risk.
The real risk of being toxically risk-averse, of course, is that it leads to paralysis and inaction. Since almost nothing worth having – from asking out that person you are attracted to, to changing a job, to having elective surgery – is completely risk-free, an inability to make a balanced assessment of risk and act accordingly can itself bring catastrophe on one’s head. To make this clearer, it might be worth asking in decision-making scenarios: “What risks am I assuming if I choose not to act?” In other words – what are the risks of in-action?
When working with others to assess risks realistically in order to inform decision-making, there might be a number of questions worth asking, the first of which I have already alluded to. Others, in response to potential risks raised by others might include:
“What is the character of the person identifying the risk? Is he or she someone who realistically appraises situations or is this someone who tends to focus on the negative and catastrophise?”
“Is the risk that has been raised plausible or absurd?” (After all, there is almost no situation in which someone cannot manufacture some potential catastrophe, sometimes as ridiculous as Chicken Little’s conviction that the sky was about to fall on everyone’s head).
“If the risk is plausible, is it serious?
“If the risk is plausible, what can be done to manage it?”
“If the risk is plausible, are the potential benefits of events turning out well worth the risk?”
Questions such as these can enable a more balanced perspective rather than allowing a situation to emerge whereby the moment someone identifies a potential risk this leads to automatic abandonment of a project and a continuation of the (potentially risk-laden) status quo.
If you are struggling with some aspects of risk assessment in your own organisation at the moment, our experienced Business Analysts can assist you in obtaining clarity and exploring your options. If you are currently facing some personal challenges our Executive Coaching services can support you in obtaining a greater understanding of the risk/reward possibilities you are facing and help you to connect with inner resources to navigate them effectively.
Remember, a faint heart never won…. whatever it is you wish to win.
