In an era of great change, how might organisations make the most of a rare opportunity to enhance human capital? Deborah Ritchie speaks to Geoff Trickey about the increasing value of risk awareness

With the easing of restrictions and the transition from the emergency phase of the pandemic, organisations are beginning to settle into their ‘new normal’. Following over two years of disruption, many organisations will look different – whether because footprints have grown or contracted, business models have changed, IT capabilities have improved, or staff roles expanded.

In this context, Geoff Trickey, consultant psychologist at the Psychological Consultancy, believes that organisations have a golden opportunity to enhance human capital by better understanding attitudes towards risk. This is supported by the worrying economic and geopolitical backdrop, where human resilience continues to be tested – making the case for the importance of risk-aware teams.

We often hear that the disruption caused by the pandemic was unprecedented. But what of the opportunity?

One way or the other, disruption is inherently galvanising. Depending on risk disposition, it will put people on the alert either defensively (will we weather the storm?) or offensively (will new possibilities get us ahead of the game?). Survivors, having found a way of managing the turbulence, would be expected to be much more open to new ideas. The more creative, commercial and entrepreneurial professions; those who always need to track markets closely, are likely to ‘turn up the dial’ on their ingenuity and embrace the challenge. Forced to do things differently for the past two years, even employers in the more traditional and formal sectors may now be more interested in exploring other ways of doing things.

The initial excitement will inevitably calm down. In some ways, it already has. You will remember the calls towards the beginning of the pandemic to turn what had become a very quiet Canary Wharf into one huge residential estate. That all seems like a world away today, as London’s Docklands are now experiencing increased footfall. Whilst this is an isolated example of what’s happened, it does make you think about the possibilities and opportunities arising from two years of uncertainty. Businesses will have to ‘recalibrate’ as they continue to monitor events and to consider their options as things settle down.

How differently has the pandemic impacted individuals across the Risk Type spectrum?

The Risk Type Compass is a peer reviewed psychometric questionnaire aligned with the two independent neurological systems that are involved in decision making. These measures of Emotion and Cognition provide the axes for a 360-degree spectrum of risk dispositions segmented for interpretation purposes into eight risk types.

From the work we carried out with organisations and individuals throughout the pandemic, we found that in the initial phase, enthusiasm – over excitement even – for a change to working practices was reported among the more creative individuals. In terms of propensity for risk taking, we call this group the Adventurous group. They don’t enjoy routine and can be quite intrepid. They see the opportunity in change – in things ‘being up in the air’.

In terms of their disposition towards risk, many will relish it, and some will spend their lives seeking for more of it! The Wary group, at the polar opposite, are risk averse both cognitively and emotionally; at their most extreme – they exemplify orderliness and planning turbo-charged by passionate feelings.

The Composed risk group, will have weathered everything in a calm, considered unemotional way. Having been the least perturbed by disruptive events, they stay calm, not easily flustered and never panicked.

Those crossing the line into Deliberate territory, also tend to be emotionally unreactive but combined this with being highly methodical. The Intense group will have been the most anxious and disturbed by the prolonged uncertainty.

Prudent types would be looking forward to getting back to work; hoping things will soon get back to normal. And they will have a much more definitive idea of what that looks like. The Carefree group, who tend to welcome disruption and change, are the most likely to have been motivated – even inspired by it!

The influence of these characteristics will not be limited to decision making in a work context. For the extreme Prudent Risk Types, perfectionistic tendencies impact everything, including holiday arrangements. They manage risk by preparing meticulously – which can take up a lot of time! The last thing they want is to look incompetent, so they look for what might go wrong, and fix it. Then they will look for something else that might go wrong, and fix that, too. It’s easy, also, to see the positive side of this in any number of professions.

There will be a few individuals for whom anxieties reached almost clinical levels of intensity. These people have been really struggling, many only just hanging on. Some may not return to ‘normal life’ for a long time after the pandemic – if at all in some cases.

How can an understanding of Risk Types be applied in practice?

When I started working in the business field, I wanted to take what I had learned within academic psychology and see where it can have utility in the business sphere. Among other things, psychology teaches us just how extraordinarily different we all are, and that generalisations about ‘people’ airbrush out the most important of distinctions.

Self-awareness in terms of Risk Type is valuable in any business environment – not just in risk management itself. At board level, individuals need to understand what their own personal biases are, better still, for the board as a whole to be sufficiently conscious of balance and the inter-personal dynamics of the group, to process decisions that are as risk-aware as possible.

In the ‘big picture’ context it seems the world is facing something of a decision-making crisis. The continuous acceleration of technical development is highly disruptive. It means that information about the past, needed to as a foundation for the identification and quantification of future risk, is increasingly sparse and has wide margins of error. It is likely that we will need to give more thought to the way in which we organise the context for decision-making; the arrangements and the balance of participants involved – who should be ‘in the room where it happens’? Cognitive diversity has been recognised in ‘red teaming’ and ‘devil’s advocate’ style approaches to decision making, and awareness of the implications of Risk Type balance and dynamics can also make a significant difference in enabling the process.

As David Koenig, president and CEO of the DCRO Institute, states; ‘a lack of clarity regarding individual risk preferences among board members can create surprising conflict in the boardroom, challenge consensus, and potentially slow an organisation’s progress toward new opportunities that maintain a competitive advantage’.

Understanding Risk Type is the start of this journey – both personally and in the way that teams are built and can be developed. Broadly, this is about the critical nature of decision making, uncertainty, and ultimately, about organisational survival.

This interview was published in the May-June 2022 issue of CIR Magazine.

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