Breaking the Risk Blindness Cycle: Building a Resilient Approach
- Robert Sunderland
"How did I miss that!!!" - A Look at Our Inherent Risk Blindness
Have you ever found yourself slapping your forehead, exclaiming, "How the {insert expletive} did I miss that risk?" Don’t worry, you're not alone. It's commonly heard in boardrooms, offices and construction sites worldwide, often accompanied by copious amounts of coffee with an overabundance of hastily arranged meetings and urgent whispered phone calls.
Have you ever wondered why, despite our highly evolved brains, we humans sometimes miss risks that are as glaringly obvious as an Elephant or a grey Rhino in the room? Why do we sometimes ignore these risks even as they loom even larger in front of us? Well, there are many reasons why we don’t see risk or, perhaps more worryingly, choose to ignore it.
In this blog, I explore the reasons behind our tendency to turn a blind eye to risks and provide insights on how you can avoid these tendencies in the future.
The "Ostrich Effect"
It’s true, us humans have a penchant for selective blindness, especially when it comes to risks. We can attribute this to the infamous "Ostrich Effect". This is a cognitive bias where people tend to “bury their head in the sand” and avoid potentially negative but useful information, such as feedback on progress, to avoid psychological discomfort.
In other words, the tendency to bury our heads in the sand and hope that risks will somehow magically disappear. Newsflash: They won’t. they just accumulate and become a bigger problem.
Optimism Bias
Then there's our old friend, the Optimism Bias. We tend to be overly optimistic about our projects or decisions, imagining success around every corner. It's like going to the gym for one day and expecting to wake up with a body like The Rock's the next morning. Sadly, the reality is very different.
So, how do we overcome these tendencies?
Here are some very effective strategies to help you get better at identifying and managing risks:
Embrace Your Inner Pessimist: It's great to be optimistic, but when it comes to risk management, believe it or not, a healthy dash of pessimism can go a long way. Spend time imagining the worst-case scenarios. It's not fun, but neither is finding out your project has been derailed because of an overlooked risk.
The "What If" Game: Remember when you were a child, and you asked annoying "what if" questions? It's time to channel that inner curious child. What if our main supplier goes bankrupt? What if our competitor launches a similar product?
Learn from the Past, but Don’t Live There: Past experiences are a gold mine for understanding potential risks. But don’t assume the same old risks will always be the only ones. New risks are like pop-up ads; they keep showing up when you least expect them.
Get a Fresh Pair of Eyes: Sometimes, familiarity breeds blindness. Get someone who isn’t directly involved in your project to review it for potential risk. They could spot something you’ve missed… like that spinach stuck in your teeth.
Make Friends with Technology: When it comes to the risk management industry, we are lucky to be able to benefit from a wide range of software and digital tools that can help with effective risk management solutions. The more comfortable you are with the software tools the better the result from using them.
Regular Reality Checks: Regularly review your risk assessments. It’s a big mistake to think of risk assessments as ‘red tape’. They can be incredibly useful. Risks can change faster than fashion trends, so keep your assessments up to date.
Conclusion
It's important to keep in mind that overlooking risks is just as human as misplacing your keys. But by acknowledging this, and proactively working to overcome these risks, we can become better at spotting and managing them, The goal isn't to eliminate threats entirely (which is impossible unless you have a crystal ball) but to manage them effectively.
The final point I want to push home is that after you’ve patted yourself on the back for identifying lots of risks, make sure you do something about them and don’t just leave them on the register to be dusted off at the next review!
Need help with your risk management process or the initial setting up of your Risk management process? Then please do get in touch with us today.