Have you stopped to consider what “risk” means to you and how your interpretation and assumptions may vary from person to person, company to company and community to community?
We did some research and analysed 9 expert resources, compiled from dozens of expert studies, into the research and analysis of risk to understand the issues better.
We consider the comprehension, variance and influences of “risk” to be a fundamental concern for business travellers and management.
One expert group argues “risk analysis is an imperfect science in an imperfectly understood world.” (Elliot, et al. 2010).
They go further by stating that “the principal difficulties with probabilistic risk analysis is the assumption that the understanding of risk is factual rather than perceived”. (Ibid).
Addressing the many myths associated with risk, another expert argues that “risk assessment should not only include cost and frequency but also other factors such as the degree of intention, consent, rights, duties, equity and agency as determinants of risk”. (Hansson, 2005).
It becomes clear, very quickly, that the context of individuals, organisations and community within the risk assessment landscape consist of significant influence and filters which are interwoven in the final result.
Separate research and findings of experts in the modern context assert that “assessments of risk may be socially constructed and socially amplified”. (Lofstedt, et al. 1998).
This should act as a warning to business travellers and management.
“The social construction of risk refers to the idea that assessments of risk cannot be definitive or absolute”. (Elliot, et al. 2010).
This introduces many compounding, and divergent factors in that “both the assessment of risk and the choice of actions concerning risk are judgements made under conditions of uncertainty and are influenced by factors such as fear, ignorance and experience”. (Ibid)
This means that the time of assessment, the assessor, audience and context may have not only changed significantly within minutes of an event but are highly variable and influenced by the people that receive said information or assessment.
This is reinforced by the experts with observations that “perceptions of risk may be amplified such that other individuals and groups may influence the perceived level of risk that a hazard presents to such an extent that it is distorted beyond the actual risk that it would present; for example, the influences of Y2K , disaster pornography (whereby the more visual an event is, the more media coverage it receives (Alexander, 2000) and “terrorgoating” (whereby the association of an event with terrorism amplifies the level of concern that it attracts (BBC, 2002)”, as summed up by Professor Elliot and his colleagues.
Has your organisation and management considered these issues within the short and long term context?
Courts, legal experts and investigators have focused on these issues in the wake of adverse events affecting an organisation’s personnel.
Especially given the fact that “expertise and choice may influence an individual’s assessment of risk” (Slovic,1998).
As we have noted in other information videos, various conscious an unconscious biases influence us all in the decisions we make and the way we interpret facts and recommendations.
“In the case of an “optimistic bias”, an individual may believe that they can intervene or control a hazard, thereby lowering the risk”. (Elliot, et al. 2010).
This applies to business travellers, managers and even the organisation as a whole, which is made of people, not robots.
Again, stop to consider the significant variances and influences across this spectrum, considering the fact very few of us share exactly the same experience, capabilities and beliefs.
Outcomes will be neither perfect nor consistent in this context.
Professors Elliot and Swartz, joined by Principal lecturer Herbane, go on to explain that “the notion of “revealed preferences” suggests that risks are more acceptable (and thus may be rated less undesirably) if they may generate a benefit: that is, it is worthwhile “taking the risk””.
“Consequently, voluntary risks (such as driving or skydiving) will be perceived to be more acceptable than involuntary or less avoidable risks (for example, pesticide use in food production or genetic modification)”. (Elliot, et al. 2010).
How well do you as a manager or your organisation understand these contributing factors?
Does this understanding and education extend to your business travellers?
Can you demonstrate proof or education to support such claims?
It is vital to note that “ lay-persons rate risks differently from experts.”(Slovic,1998).
As noted in our previous research and analysis videos “in the relative absence of technical or statistical knowledge lay-persons subconsciously classify risks into those which are a “dread risk” (heavily influenced by fear of the risk) or “unknown risk” (heavily influenced about uncertainty about the risk)”. (Elliot, et al. 2010).
This means that much of a business traveller or managers motivation and justification for action or non-action will be driven by subconscious reasoning, which is often not understood or disclosed, around such issues as personal dread and “gut feeling” on technical risk issues.
How comfortable is your business with such wildly varying outcomes?
What have your organisation and management done to address these known and predictable issues?
A final observation by the Professors, verified by significant research and academic review is that, “since risk as a social and personal construct (coupled with some of the short-comings that surround the quantification of probability and impact), there may be differences in the boundaries between acting and ignoring risk – the point at which a risk (known as a de minimis risk) is so inconsequential that it is beyond concern or no risk at all.” (Ibid).
It is essential that organisations update their assumptions and approach to management of risk as it pertains to mobile and travelling business personnel.
As forecast by an expert in corporate risk and governance opines “The next 10 to 15 years will test the ability of many organizations to change from a culture of complacency and minimal compliance with a narrow set of risk-related regulations to one of a culture of responsible risk-taking that seeks to protect all the stakeholders’ interests and addresses the full array of risk exposures enterprise-wide”. (Warning, 2013).
If you haven’t adequately considered or addressed some of the critical factors in this risk education video, or appropriately managed the variances, you may well find yourself living the experts’ premonitions, in addition to placing people and organisations at higher risk.
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Intelligent business decisions based on verifiable and analysed research.
Edited and approved by Tony Ridley, international security and risk management professional.
References cited in this video: