Forbes Leadership Careers What We Get Wrong About Risk That Makes Us More Vulnerable Dr Margie Warrell Contributor Opinions expressed by Forbes Contributors are their own. Margie Warrell emboldens people to live & lead more bravely. Following May 23, 2023, 09:26am EDT | Press play to listen to this article! Got it! Share to
Facebook Share to
Twitter Share to Linkedin Social distancing. In our efforts to avoid risk we can make ourselves more vulnerable to greater ... [+] dangers. getty In the 2000’s, the US Armed Forces introduced bullet resistant body armor to protect
American soldiers in deadly combat zones such as
Iraq and Afghanistan. Yet the armor was so heavy that it weighed soldiers down and slowed their speed. General Stanley McChrystal, commander of the joint missions in
Afghanistan at the time, decided that the compromise on speed and agility was not worth the protection, particularly for soldiers who had to climb the mountains of Afghanistan. “Yes, there was risk of wearing less and lighter grade armor, but it outweighed the risk of it being too heavy.” Managing risk is always an exercise in trade-offs. The very dictionary definition of risk - “exposing oneself to the possibility of loss or injury” - lacks nuance and tilts the calculus toward avoiding risk, at least the most obvious and immediate. What is often not adequately factored in is how, by seeking to shore up short term exposure, they inadvertently make us more vulnerable. The greatest source of risk to us is us. As much as we’d like to think otherwise, we are always logical or rational in how we approach risk. After a distinguished
MILITARY career navigating the very real and deadly risks of combat, McChrystal concluded that the greatest source of risk are not external threats and dangers. Rather the greatest source of risk to us is us. More specifically, in how we detect , assess , respond and learn from risk. These elements form what McChrystal calls our Threat Immune System which he details in Risk: A Users Guide , co-authored with Anna Butrico. The fact that our decisions are often directed less by logic than emotion (with fear being the most dominant) explains our tendency to over index attention on the downside of risks right in front of us and under prepare for bad (sometimes disastrous) events that may occur in the future. When looking back on disasters, people will often say ‘Nobody saw it coming’ when, in fact, many people saw it coming. The Covid-19 pandemic is an all too recent case in point. Today we face an ever-changing landscape of complex and ambiguous risks. We know they exist but not all are visible. Couple this with news streams bombarding us 24/7 with reasons to feel anxious and keep a mask close by, it’s unsurprising that so many people are still wearing one. MORE FOR YOU
WWE Raw Results: Winners And Grades On May 22, 2023 McCarthy And Biden Hold ‘Productive’ Debt Ceiling Talks—But Still No Deal As Default Looms 2023
NBA Draft: Exploring Oklahoma City Thunder’s Draft Prospect Possibilities The Covid-19 pandemic has magnified our sensitivity to potential dangers - particularly the most obvious and easy to capture our imagination. Messages to put ‘Safety First’ and ‘Better to be safe than sorry’ get embedded into our collective psyche. Which is why we must be extra vigilant to discern real threats from imaginary ones, and be vigilant in how we are preparing for and responding to potential risks. Not all risks are created equal. Failing to so can renders us vulnerable to our own biases and ‘blind spots.’ Reframing risk through a larger lens We come hardwired with a temporal bias that discounts the distant future and channels our attention into what lays directly ahead. After lunch. Tomorrow. Quarter end. This drives us to be over-protective in avoiding short term at the expense of optimizing longer term gain. Zooming up to reframe the current moment through a larger risk context – of time and space – widens our aperture to identify less obvious paths forward and then, to galvanize our courage to take them. In business, this could be doubling down on innovation or pulling a product that’s generating cash but distracting resources better deployed elsewhere as market trends emerge. In all situations, it requires accepting that peripheral risk taking is necessary to protect the core, advance the mission and forge new ground. As research by Korn Ferry found, leaders who operate from a ‘courage mindset’ are more effective in navigating risk/reward tradeoffs and seizing the opportunities disruption always holds. Beware rationalizing your timidity The term “loss aversion bias” describes our tendency to avoid loss - of power and profit; control and comfort; status and certainty. This bias explains why people (and organizations) often sit quietly when they should speak up and default to cautious action over courageous action. Our tendency to avoid risk is reinforced by the fact the costs of playing safe and silent are rarely obvious or immediate. No alarms go off when no action is taken. But we should not underestimate the hidden ‘timidity tax.’ Like a car engine slowly leading
Oil, it eventually breaks down. “We hate to lose more than we love to win,” wrote Daniel Kahneman wrote in Thinking Fast and Slow . When uncertainty runs high, it triggers anxiety that turns our forecasts into ‘fearcasts’ and rationalizes hyper-cautious decision making or complete indecision. Beware over analysis Yet often we do just that, wait until we know for sure we have the right plan with the optimal risk/reward ratio. However, given the uncertainty inherent in most situations, even massive data can’t eliminate every element of chance. Considered risk assessment is smart. Burying ourselves in spreadsheets trying to tabulate every potential danger is not. As combat soldier learns, in the midst of battle, it is safer to run left or right than to stand still. We crave predictability. But it’s when we are willing to venture out of the safe lane, particularly amid heightened unknowns, that we can yield the greatest rewards. As
Formula One champion Ayrton Senna points out, “You cannot overtake fifteen cars when it's sunny weather, but you can when it is raining.” Challenge your certainties In 1946 as the first televisions hit the market, Darryl Zanuck, President of 20 th Century Fox dismissed the potential competitor threat: “People will soon get tired of staring at a plywood box every night.” Forty years later Steve Balmer,
Microsoft CEO, declared with equal confidence “The
iPhone won’t be around for long.” Often our certainty about what we absolutely know is right is our greatest source of vulnerability. To quote Mark Twain, “What gets us into trouble is not what we don’t know. It’s what we know for sure that just ain’t so.” Risk = Threat x Vulnerability McChrystal points out that it is our ability to prevent, avoid or mitigate a threat that determines to what extent it constitutes a risk. If we aren’t vulnerable, threats don’t matter. If there are no threats, vulnerability doesn’t matter. But more often, we cannot reduce either to zero and so we must move forward despite both the threat and our vulnerability. ‘There are risks and costs to action,’ said President John F. Kennedy, ‘but they are far less than the long-range risks of comfortable inaction.’ Playing too safe makes us less secure and more vulnerable, not the other way around. Kennedy’s words hold true both on the individual level as well as on the collective. Clearly testing the depth of water with both feet is just stupid. But being too timid to take any chance creates the greater risk of not learning, not growing, not advancing and not discovering what lays beyond what we already know. Not all risks are created equal. Managing it well requires being proactive in controlling every factor within our reach. To quote General McChrystal, “There is far more than lays within our control than outside it.” Indeed, history teaches us that no worthy endeavor is achieved without risk. Trying to bullet proof ourselves from all potential dangers puts us at risk of collapsing under the weight of our protectiveness. Margie Warrell is a Senior Partner in leadership advisory at Korn Ferry. An expert on courageous leadership and author of Stop Playing Safe , Margie helps leaders navigate risk better and scale the ‘courage mindset’ across their organizations. Listen to her podcast conversation with Gen. Stanley McChrystal here . Follow me on Twitter or LinkedIn . Check out my website or some of my other work here . Dr Margie Warrell Editorial Standards Print Reprints & Permissions