Thursday, July 21, 2022

What Driving a New Car Teaches Us About Managing Enterprise Risk

If you have purchased a new car in the past few years, you probably have many new technological features to "assist" your driving:  forward collision warning, lane departure warnings, lane keeping assist, back-up camera, adaptive cruise control, blind spot monitoring, etc.   Hopefully, these features make us safer.  Theoretically, they should help reduce human error.  However, four countervailing forces emerge when you install such an array of safety features in a vehicle.  

1.  Drivers develop a false sense of security, and therefore, they take more risk.  Perhaps they drive faster, or they are more apt to text behind the wheel.  

2.  Drivers become overly dependent on the technology.  Over time, their skills erode as the car makes more and more decisions for them.   Consider a scenario where suddenly your back-up camera and parking assist features go away.  Can you parallel park as effectively as you did ten years ago?  

3.  Drivers develop alarm fatigue.  All the warnings and signals become annoying, and drivers simply start ignoring some of them (or turning them off).   

4.  The additional complexity of the vehicle becomes problematic and adds to the risk of a major failure.  For instance, consider renting a vehicle from a different manufacturer than the car you own.  Will the different systems befuddle you a bit? Could the confusion lead to errors?  Similarly, could the added complexity mean that the car is more prone to break down and be costly to repair, given all the technology embedded in the vehicle?

These four concerns all apply to your enterprise as well.  As you add systems to "assist" decision makers, you face these countervailing forces.  Redundant systems may provide crucial back-up to protect against human error, but they add complexity and they create these offsetting risks because of human nature.  We should all be aware of these other risks as we embrace the use of fail-safe, back-up, and decision support systems in our organizations.  

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