Wednesday, November 02, 2022

Uncovering Hidden Risks: Three Challenges


I've argued that leaders need to become more proactive problem finders if they wish to avert surprising failures in their organization.   They need to seek out and uncover hidden risks.  Unfortunately, as humans, we struggle with regard to how we cope with risk.   Three patterns of behavior prove particularly problematic when it comes to risk.  

1.  We actively downplay and discount ambiguous risks.

As Amy Edmondson, Richard Bohmer, and I have argued, individuals and organizations are predisposed to downplay ambiguous threats.   Think the foam strike on the Columbia shuttle or the early news reports of a deadly virus in Wuhan, China.  

2.  We normalize riskier actions over time.

As Diane Vaughan has argued, we engage in a gradual acceptance of higher and higher risk over time.  We deviate from a standard, and if nothing bad happens, we set a "new normal" for ourselves. That makes a further deviation from standard seem quite small, when in fact, we are drifting further and further from what was initially deemed to be the appropriate benchmark.  Consider how we can incrementally make our way to driving 30 miles over the speed limit.  

3.  We take more risk when we know that safety protocols, back-up systems, and redundancies are in place. 

Consider how we drive once we know our car has a number of technological innovations that help us stay safe (lane assist, back-up cameras, object detection, assisted braking, etc.)   We sometimes take more risk because we think that those systems will protect us.  

No comments: