The importance of fronting up to risk.


If you front up to risk you can then reduce it to an acceptable level where by you can achieve more.

“If you do not change, you can become extinct” Dr Spencer Johnson from “Who Moved My Cheese?” 

In the section ‘The psychological mind” we looked at man’s three constituent psychological parts which determine how we approach situations which are:

  • Mr Past-experience
  • Mr Emotional
  • Mr Rational

We looked at the dangers of waking up Mr Emotional (Mr Em) and how the sense of fear and threat are the two alarm calls which wake up Mr Em, and how once awake he will dominate and how very destructive he can be, certainly not needed when making key decisions.

Now the perception of risk is sufficient to evoke both fear and threat, more than enough to wake up Mr Em, when this happens the likelihood of having a reasonable discussion and coming to a sensible conclusion is minimal. What can happen in the boardroom, as the various Mr Ems are waking up, is in order to avoid a destructive meeting with all the various consequences, people will look for something to unite around. In the section “Survive and thrive” we looked at how the fear of something happening creates the unpleasant side effect of anxiety which often results in people going into “Denial” and adopting the “Ostrich position”. Here lies the real danger, everyone will “Pour oil over troubled water” convincing themselves and placating each other that:

  • there is nothing to worry about.
  • We have survived worse than this.
  • We have been around for X years; it will take more than this to bring us down.
  • If it is going to be a problem we usually find a way around things.
  • Don’t panic, this is a time for cool heads, “Don’t throw the baby out with the bath water”.

All very good placatory techniques, but fundamentally the issue(s) will still remain, all that will have happened is that the issue(s) will have been put back on the shelf, “Out of sight out of mind”.

We all actually face up to risk every day, a lot of it is repetitive and we have confidence in the outcome, driving to work, crossing busy roads, or it is fairly low level risk with low level consequences. Risk only becomes an issue when the stakes get higher and/or multiple people are involved in the decision making each with a different perspective to the risk and/or multiple people will be affected by the outcome. The problem for today’s business leaders is that:

  • Markets are changing more often and faster.
  • Customers wants, needs and expectations are changing at ever more rapid rates.
  • Technology is developing faster than ever before.
  • Innovative use of technology is a fast-growing industry in its own rights.
  • The impact of the disruptive employment market is creating new competition at a faster rate than ever before.

In the section headed “Insight into the 4IR” and the statistic on the dramatic fall in the average life of a company from 1958 – 61 years to 18 years in 2015, suggests that the biggest risk businesses face today is not even considering that they may be at risk.

Whatever the reason for not fronting up to risk, whether it be perceived and/or real risk, not dealing with the risk issue is the biggest risk of all, which means that there can be no reason for not fronting up. The earlier you front up the more options and opportunities  you are likely to find and the easier it will be to deal with. Approach the subject in a structured and controlled way before it is perceived that there may be a real problem. You then have a greater chance at approaching it by looking at the positives, exploring potential new opportunities and how you might be able to steel a march on your competitors, and most importantly work with Mr Rational and not Mr Em.

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