by Clare Vane and Andy Patterson
Organisations have taken their first tentative steps out of lockdown and are grappling with the possibility of a second wave and the uncertainty this entails. As a result, many business leaders will be wondering how on earth they can navigate our new COVID world with least detriment to their business.
We are all taught, through our education, to gather data, evaluate it and then make good decisions and we find that the unknown develops into something we can understand. The current pandemic changes this journey from a sure-footed decision-making journey to paths that are thus far untrodden. We are not living in an era where certainty exists; absolute certainty is an illusion. Premises that are given to us are thrown to the wind.
Those people who take risks, who are ‘big picture’, who live dangerously near the edge are often thought to be colourful and those who are risk-averse are often thought to be dull. Whatever our views, we need to get our risk profile just right.
There is no doubt that if we lived in a controlled, measured world we would find it lacking in emotion.
There would be no fear of the unknown and no excitement of the trepidation of, for example, closing a sale.
There would be no serendipity – the pleasure of bumping into an old friend whom we haven’t seen for ages, or the surprise of winning something on the lottery. The 17th Century philosopher, Gottfried Leibniz, imagined the establishment of a numbers system and symbols for every question people might face, calculating the best answers for every possible situation. His quest to solve differences of opinion with certainty of calculation never materialised. This is not very surprising, yet we still go around looking for certainty. We are taught to weigh up the pros and cons of something and make a decision by gathering data, but at the moment, we lack data. And the social, political and economic backcloth influences us all and different generations feel different influences. Both Brexit and the fall-out from Covid19 are unknowns for which we can model ad infinitum – and still there remain a myriad of related risks which are unforeseen and unmeasurable.
Gerd Gigerenzer, the psychologist and risk expert, explains that risk and certainty are interchanged in everyday language, but they are not the same thing. If we can measure something and calculate a probability, then there has to be a risk attached to it. Unknown variables mean we are always talking about degrees of uncertainty.
We can try and estimate the possibility of being caught in an earthquake, the chance of winning the lottery and the chance of falling in love, but these are uncertain incidences.
We can, however, shine some light on personalities and individual differences and gauge how people are most likely to react to risk. Some are very averse where others are carefree and pro-risk. Coupled with other personality factors - such as intensity or composure – we then have the foundations for creating an accurate measure of a person’s attitude to risk and can work out how best to release potential in the workplace.
The Risk Type Compass (RTC) is a personality assessment tool which helps illustrate an individual’s attitude and approach to dealing with risk. The tool is easy to use, yet precise and subtle, as well as being coupled with the robustness of statistical proof which underlines the theory. Understanding people’s risk profile is very important at the moment with uncertainty in health and safety, financial decision-making, recruitment, reputation and social and recreational activities.
Our risk profiles are a strong influence on all our decision-making. It is interesting to remember that Socrates wrote ‘Character is destiny’.
The RTC is very useful for this time of turbulent change, with a backcloth of Covid-19. It offers tangible benefits for those coping with fast-moving change and decision-making. We can look at the risk landscape in a new way and use a language that enables us to discuss it, making us more adept and fluent in the language of risk which allows for elements of know-how and an ability to jump in different directions. The quicker you become fluent in risk, the more quickly you will be able to find your edge!
Contact us to discuss using the Risk Type Compass and the benefits it can bring to your business.