People and organisations need to be aware of the behavioural impact of seemingly robust controls.
The world-renowned avalanche expert, Jil Fredston's observation that advanced safety equipment can paradoxically encourage riskier behaviour serves as a powerful metaphor for understanding organisational risk practices. When climbers feel more secure, due to enhanced safety equipment, they are more likely to attempt hazardous routes, thereby increasing their overall exposure to danger. Similarly, in organisations, robust risk management systems may create a false sense of security, inadvertently encouraging individuals and teams to engage in riskier actions.
The Confidence Trap
Organisations frequently invest significant effort into developing comprehensive risk assessments and management protocols. Considerable effort and rigour is often placed on the development of, and training in risk assessment and management. This rigor and resulting confidence in the mechanisms can create a "confidence trap" where people overestimate the effectiveness of these mechanisims and inadvertently lead people and organisations to take much more risk than they otherwise would have.
Knowing the likelihood doesn’t mean you know what the outcome will be!
Risk Management and the Illusion of Predictability
It should always be remembered, that asking people to estimate the likelihood of a consequence to occur is asking them to predict the future. This is extremely difficult even when the likelihood of an event happening can be precisely calculated, like throwing a dice. We know exactly the likelihood of any given number being thrown, but we still can’t predict what actually will come up.
Risk assessment and management are essential tools for navigating uncertainty in both personal and organisational contexts. However, it should always be remembered that the higher the number of risks that are being managed by risk management and mitigation as opposed to risk elimination, the greater the likelihood of a consequence occurring.
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