Within the wider discussion about risk (see discussion from Sidney Dekker, Michael Mazarr, and John Adams, amongst others) there is a common theme in both finance and Health & Safety that questions over-reliance on computational, procedural, bureaucratic approaches. In both arenas, determined operators have been able to ‘game’ regulation in various ways, by-passing rules. Top-down authoritarian regimes have proved vulnerable to corruption and the erosion of trust and commitment among staff: in finance, compliance becomes an administrative process, rather than an organisational value; in Health & Safety, blind obedience replaces personal responsibility and common sense.

There has been a neglect of more people-centric, perceptual, culturally framed alternatives.

Objective Risk

For professionals in banking, finance, insurance, Health & Safety, epidemiological medicine, gambling, road transport authorities, and many others, risk is something to be identified and quantified. It is a numerical, statistical, probabilistic process based on precedent and past history. This analytic view is exemplified by the work of economists, actuaries, underwriters and financial intermediaries and it assists decision making and policy development.

Although referred to here as Objective Risk, professional judgment is actually an important component at every step in the calculations. Questions about over-reliance on the computational approach have been amplified by the failure of regulators to identify an impending economic crisis on the one hand, and on the manipulation of safety statistics and plateauing of safety incidents on the other.

In Finance…

In the years before the crisis, risk management had also become a highly quantified and probabilistic discipline, incorporating metrics like value at risk to offer detailed projections of exact probability, to a very narrow range of confidence, of some damaging event.

Michael J Mazarr


In Health & Safety…

Our governance and safety is often organised around bureaucratic processes, driven by high modernist ideas, and held up by Cartesian-Newtonian assumptions about how things go right and wrong. It supports and legitimates systems of counting and tabulating, and largely relies on vocabularies of control, constraint and human deficit. This, however, has helped to entrench the idea that safety is generated chiefly through planning, process paperwork, audit trails and administrative work.

Sidney Dekker


Subjective Risk

The statistics of Objective Risk are a consequence; the result of innumerable personal decisions. They arise from what people are naturally disposed to do in ordinary, everyday circumstances.

Like beauty, risk is in the eye of the beholder. People drive cars fast or slow; dash across busy roads or wait for the pedestrian light; eat junk food or superfoods; they vote one way or another; have good or limited powers of concentration; may or may not be reliably vigilant; buy or sell goods for all sorts of reasons; and a million other things that subsequently impact on financial and safety statistics. They act according to their own perceptions of risk and their reactions to it – both emotionally (excited or fearful) and cognitively (prudent or carefree). In these respects, people vary enormously.

These individual differences in risk disposition come from the core of personality. They are measured by and captured within the 360-degree spectrum of the Risk Type Compass, which provides a framework and a vocabulary for measurement.

Peter Drucker reputedly claimed: “If you can’t measure it, you can’t manage it.” A long heritage of personality assessment makes it very much easier to reliably measure risk personality than it is to measure financial risk or the “danger”.


The argument for managing risk at source, before it becomes a statistic, follows the logic of the old proverb, “if you look after the pennies, the pounds will look after themselves.” Awareness of Risk Type, from boardroom to front office to shop floor, and appreciation of the value of diversity in individual risk sensitivity increases organisational resilience. It strengthens resistance to the ‘group-think’ and the herd behaviours that lead to disaster. It is working with nature, rather than fighting against it.

Geoff Trickey, June 2019

FREE EVENT | Risk Type: How Instincts Shape Decisions

Implications for Finance, for Safety, & for Life

Join Geoff at a FREE event on Friday 5th July in Sydney, Australia discussing all things Risk Type, regulation, and personality.

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Michael J Mazarr (2016), ‘The True Character of Risk‘ in Risk Management
Michael J Mazarr is a senior political scientist at the RAND Corporation. Previously he worked at the US National War College, where he was Professor and Associate Dean of Academics, was President of the Henry L Stimson Centre, a senior fellow at the Centre for Strategic and International Studies, a senior defence aide on Capitol Hill and a special assistant to the Chairman of the Joint Chiefs of Staff. His primary interests are US defence policy and force structure, East Asian security, nuclear weapons and deterrence, and judgment and decision making under uncertainty. Mazarr holds a PhD in Public Policy from the University of Maryland.

Sidney Dekker (2015), ‘Safety Differently: Human Factors for a New Era‘ (CRC Press, New York)
Professor at Griffith University in Brisbane, Australia, where he founded the Safety Science Innovation Lab, Dekker is also Honorary Professor of Psychology at the University of Queensland. Previously, Dekker was Professor of human factors and systems safety at Lund University in Sweden, where he founded the Leonardo da Vinci Laboratory for Complexity and Systems Thinking, and flew as First Officer on Boeing 737s for Sterling and later Cimber Airlines out of Copenhagen. Dekker is a high-profile scholar and is known for his work in the fields of human factors and safety.

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