The Risk Type Compass: The Key to Good Decision-Making
Risk dispositions impact the decision-making of individuals, the inter-personal dynamics of teams and the risk culture of organisations. Knowing how each individual perceives and reacts to risk and uncertainty – the way that they deal with the continual flow of conscious and unconscious decisions – provides invaluable insight into decision-making effectiveness.
An approach to decision-making that is focused, meticulous in detail, organised and thorough will not easily synchronise with decision-making that is spontaneous, highly imaginative and changeable. Misunderstandings and potential conflict easily arise between different Risk Types within a team. Positively though, the complimentary nature of differing Risk Types can transform conflict into strength through effective collaboration.
How can the tool be applied?
By encouraging awareness and mutual respect, the Risk Type Compass supports team conflict management, team building, selection and development, risk culture, leadership development, employee development, board assessment and organisational change (plus much more). It resists the group think, herding and risk polarisation that derails projects and organisations.
Registered and recognised by the British Psychological Society (BPS), and developed by highly experienced Chartered Psychologists, the Risk Type Compass reflects the neuroscience of decision-making. It was created through professional practise and action research, allowing the empirical data to drive development, rather than siding with ‘big data’ and ‘dust bowl empiricism’.
Watch this short video to learn more.
Shortlisted for CIR Risk Management Awards 2020, we’ve worked with a wide range of clients, from large corporates to individual coaches, to support individual, team and organisational level development.
Three sample client scenarios facilitated by the Risk Type Compass:
1. The RTC helped to identify the decision-making style of board members and to assess risk culture. The assessment found all members gravitated towards the same Risk Type. It was clear that their strengths included being calm, level headed and stress tolerant. During the subsequent workshop, it became clear that there were potential blind-spots in their approach to decision-making, such as lacking urgency in implementation and not learning from past mistakes.
2. The RTC was adopted to highlight the strength areas and risk appetite associated with the Risk Type of individual traders. Also, to identify blind-spots, potential performance improvements and the style of trading they were most suited for. The RTC is used extensively in trader coaching in financial centres around the world.
3. The tool has also been used to anticipate sticking points that may arise during organisational change. This enabled leadership to rethink risk in terms of objectively measurable differences, which resulted in increased interpersonal-awareness and mutual respect of Risk Type variations. This open communication channel supported team operations and decision making, championing the realisation of talent, personal responsibility and human capital.
How to take the assessment
The Risk Type Compass personality assessment places individuals into one of eight distinctive Risk Types. By identifying natural differences in risk appetite, you can maximise potential and balance the contributions of risk-takers and more risk-averse individuals.
The assessment is easily administered online and takes just 10-20 minutes to complete. If you’d like to administer the Risk Type Compass tool to employees or clients yourself, you must first complete a qualification workshop, either face-to-face or via our online learning platform. This certification course will provide extensive information on how to interpret and give feedback on an individual’s risk profile, guidance on facilitating team development sessions as well as an overview of how to apply the tool to support risk culture strategy. Scroll down to learn more about key applications of the tool, or if you would like to become a certified user, visit here.
If you’d like to speak to our Risk Type Compass Consultant Psychologist about how you can use the Risk Type Compass in your workplace, please contact Louisa Bülow. Click to view sample reports, the pricelist, or the brochure.
Selection & Development
Risk Type has implications for different roles within an organisation, with sales, compliance, traders and HR, for example, all exposed to very different aspects of risk. From hiring the right person, to on-the-job coaching and personal development, the Risk Type Compass helps you understand an individual’s risk attitude and helps inform decisions at an individual, team and corporate level. See sample Risk Type Report and Personal Report.
Looking at the ‘human factor’ or the people side of of risk management, the Risk Type Compass helps organisations to attain their risk management goals. It significantly improves human factor due diligence and risk management effectiveness by raising awareness of an individual’s predisposition to risk and how that may manifest in a team.
The Risk Type Compass tool can support compliance with the Financial Reporting Council’s UK Corporate Governance Code when board members are assessing the level of risk the organisation is facing from internal, emerging and principal sources. Contact us to learn more.
The Risk Type Compass can be used to develop teams, groups and executive boards. By assessing different team members Risk Type and attitude, imbalances or the potential for conflict can be identified and mitigated, ensuring a balance of behaviours across the organisation. See sample Team Report.
Risk Type Landscape
By mapping the location and prevalence of Risk Types within an organisation, Risk Type Compass enables risk propensity to be identified and managed. Viewing the Risk Type Landscape in a tangible way allows organisations to make decisions about the overall risk culture and the extent to which there are departmental or divisional differences.
Though applicable to all industry sectors, the Risk Type Compass has particular relevance within the banking and finance, health and safety, insurance, energy, manufacturing and consulting sectors. Visit our Knowledge Bank to see the full range of Risk Type Compass resources.
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