The Risk Paradox: Individual ‘Fight or Flight’ vs Collective Corporate Culture

The ability to manage risk has been a hallmark of human nature since the beginning of time. That’s undeniable.

Early risk based decisions were undoubtedly made in the context of survival and linked to the most basic of human needs — food, shelter, safety and security.

Over time, as our lives have become more complex, interconnected and multi-dimensional, the nature of risk relative to human life has expanded. Still, the underlying fundamental driver as expressed below remains the same.

As humans we are hardwired to avoid threats in our surroundings, often at all costs, and the traditional “fight or flight” response is one of our most primal instincts.

Considering this, it is fair to assume that very early in our existence the advantages of forming and maintaining small groups, slightly larger clans and eventually full tribes became evident.

These groups, by design, provided a means to pool skills, strength and resources for securing shelter as well as food through farming or hunting. They also provided protection and defense from wild animals and enemies in a way that was certain to have been unavailable to an individual .

Essentially, the earliest human groups and societies were united almost equally in terms of their shared desire to avoid the most perilous outcomes — starvation, capture and ultimately death.

While our basic survival instincts persist and despite the current challenges facing humanity, decades of social, industrial and technological advancements have significantly insulated us from or mitigated the impact of the most dangerous outcomes which faced early groups.

As a result, groups today — particularly companies — are larger, more complex, and comprised of members with diverse goals and varying levels of risk exposure. It is within this context and the inherent nature of individual risk management that we start to understand why groups today struggle with the management of risks.

At the root of this struggle lies the absence of a cohesive and consistent approach to risk management across all the key stakeholders/members of a group. It is evident, and well-supported, that in any group individuals have different motivations, perceive risks differently and their attitudes and behaviours with respect to the same can be as unique as their fingerprints.

This challenge is compounded by an unsustainable emphasis on policies, processes, frameworks and tools at the expense of nurturing and developing consistent and cohesive culture, ethics and behaviours around the management of risk.

To address this challenge concerning risk culture, several options can be considered:

1. Create broad organizational awareness and elevate the role of culture on risk taking.
   We can begin by establishing awareness of the importance of risk culture and the psychology of risk within the organization. It is also of paramount importance that resources are allocated to nurturing and developing culture just as with other enablers of good risk management (e.g. policies, processes, frameworks, etc.).
2. Understand the impact of individuals on risk culture, while still embracing diversity in thought/experience.
   To some, it may seem possible to address the potential challenges that the diversity in risk attitudes and behaviours brings by forming largely homogeneous groups to address risk. This should be avoided at all costs as while it may create a somewhat consistent culture, it could likely result in an undesirable culture. Awareness should extend to the importance of encouraging different view points and structures should be put in place to enable the same. In doing this the hope is that with help, any desirable attitudes and behaviours can overwhelm the undesirable.
3. Move beyond basic awareness training.
   Attitudes and behaviours can be influenced with training. The challenge however is that static, self-study or checklist style training is largely unable to trigger the kind of change required. Organizations should supplement this with scenario based, interactive training approaches which require participants to express and assess their attitudes and display their behaviours relative to risk. Provisions should also be made via the same approach to communicating, promoting and rewarding desirable behaviours.

In conclusion, the intricate interplay between individual instincts and the collective challenges of modern organizational life highlights the complexity of contemporary risk management.

Reflecting on the evolutionary path from primal survival instincts to the nuanced landscape of corporate dynamics, it is evident that addressing the diverse attitudes and behaviours towards risk is of paramount importance.

By cultivating awareness and valuing diversity while adopting interactive training methods, organizations can navigate these challenges and nurture a cohesive risk culture.

The journey from individual survival instincts to collaborative risk management is an ongoing process, and success lies in embracing the nuances of both individual uniqueness and the collective strength of a well-aligned team.