Geoff Trickey, Managing Director of PCL, discusses how objective and subjective risk can be defined, and how an understanding of this distinction can influence our understanding of risk.

Clare Askew, originally from Sunderland in the UK, boarded a plane bound for Bali at Perth Airport on Sunday 22nd October. This was the city where she had lived and worked since emigrating to Australia many years ago. The Bali trip was very familiar to her. It had become almost a ritualised routine; she would frequently make the short flight as a break from her demanding routine as a psychiatric nurse. However, her happily anticipated return to old haunts in Denpasar was dramatically and horrifically curtailed.

Just as the plane established cruising speed soon after take-off, it began to plummet. The cabin crew were in a state of panic. Although they had just taken passengers on in Australia, all the desperate announcements coming over the address system were in Asian Languages. The only instruction delivered in all the chaos in English, as the oxygen masks were activated, was to ‘brace for impact’. “The panic was escalated because of the behaviour of the staff, who were screaming and looked tearful and shocked,” said Clare. According to another passenger, the cabin crew were screaming “Emergency, Emergency” as the plane dropped over 20,000 feet in 11 minutes. Passengers were texting goodbyes to their loved ones and saying farewell to those around them.

Improbably, I met Clare later that same day on the beach in Denpasar. Fearing that, after such a traumatic experience, she might never fly again unless she did something about it immediately, she courageously jumped on the next available flight to Bali. Now in possession of the facts, she explained that 25 minutes into the flight, the plane had become depressurised. To save their lives, the pilot had to drop as quickly as possible to 10,000 feet, the level where oxygen masks would no longer be needed. “We were already feeling woozy” she told us.

This incident and the contrast between the traumatic personal experiences of passengers and the official characterisation of this as a low risk event, dramatically illustrates the difference between objective and subjective risk. So far as the airline was concerned, the pilot was faced with a technical issue for which there was an established protocol. The pilot responded with the appropriate procedure. No one was at risk. Everything had gone exactly to plan. From an objective and statistical point of view the base line probability of dying in a plane crash is 1:1,000,000, yet what Clare and her fellow passengers had been exposed to was far beyond any appetite that they had for risk. Even if they had been intrepid skydivers, fire eaters or fearless rollercoaster riders in their leisure time, their risk appetite would hardly have embraced 11 minutes in the antechamber of death. For the most anxious amongst us, that experience would have been life changing.

Apart perhaps from the failure to address English-speaking passengers in their own language, this example is not presented in any way as a criticism. It is interesting because, in this incident, the distinction between an objective risk analysis approach is in such contrast with the subjective perspective and the extreme risk tolerance demands imposed on those passengers. Objective statistical methods of risk quantification and prediction are, at root, always based on counting incidents; how many plane crashes, how many people die, the frequency of tsunamis or volcanic eruptions and so on. All this is very necessary and invaluable information in terms of planning, organizational or national decision making, insurance, and other efforts to anticipate trends and maximize advantage or ameliorate, or compensate for any disasters we may face. On the other hand, risk as we experience it is personal and entirely subjective. One person’s exciting experience is another person’s worst nightmare. Where one sees only opportunity, another sees only danger. These individual differences in risk disposition will influence the perception of risk, a person’s reaction to risk and their readiness to take risks. These features will be a distinctive aspect of any individual’s personality. Rather than focusing on ’the risk out there’, any analysis of subjective risk is about the dispositions of the individuals involved and how these influence their decision making.

Consider the following road safety scenario. How dangerous a road is deemed to be will, one way or another, be calculated on the basis of accident numbers. If the result was, for example, 1 in 10,000 vehicle transits, this would be the basis for establishing the risk exposure for any driver using this road. Yet, clearly, there is also a link between driver characteristics and accidents. We know that more accidents involve teenage boys, that tired drivers cause accidents, that driving while using a phone will be a factor, that drinking habits could play a part, that experience, level of concentration, state of mind, impatience, competitiveness, distractibility will all potentially be important. Given all these ‘people’ factors, the probability of involvement in an accident cannot possibly be the same for all those individuals – as well as for the patient, careful, vigilant, defensive, cautious drivers. In fact, all these individual characteristics, on both sides, will have contributed to the current accident statistics.

So, can a road really be inherently dangerous? Obviously, zero drivers equals zero accidents. Isn’t it the behaviour of drivers that creates the statistics in the first place? Statistics don’t shape our behaviour, its the other way around; statistics come after the events. Putting it slightly differently, behaviour drives probabilities; probabilities don’t drive behaviour.

Two points in particular arise from the distinction between objective and subjective risk. The first concerns those managing people within any context where risk behaviour and decision making are critical. Whether on the shop floor, the office or the board room, these people managers need to appreciate the subjective perspective on risk, its variability and its behavioural implications – the issues are equally important, but very different to those of objective risk assessment. Secondly, for policy makers, researchers, thought leaders or anyone attempting to understand and navigate the labyrinthine complexities of risk, it is necessary to get beyond the objectivity and comfort to be found in numbers and to be prepared to explore subjective risk and human factors. Numbers wield a reassuring but sometimes spurious and overwhelming authority. To many, the complexities of human personality and behaviour are deemed to be even more intangible, but in fact risk dispositions are rooted in personality differences that can be more clearly defined and more readily measured than is often the case with the risk itself. The realities of dealing with risk in our everyday lives as viewed through our subjective risk perceptions will impact on all our decisions and all our actions.

Predictive probability has been at the heart of modern insurance practices since the 17th century. Much risk management also focuses on the probability and likely impact of potentially damaging outcomes. This is an objective statistical heritage that still holds sway over wider risk management practices. The impact on Health & Safety has often been to foster an authoritarian denial of individual differences and, particularly in high risk environments, the conceptualization of personal responsibility as ‘blind obedience’. Even though risk personality is measureable in ways that risk itself is not, these approaches persist in battling against the awkward realities of human nature, rather than recognizing it and working with it.

Risk management practices are changing and increasingly aim to foster greater self-awareness within a climate of mutual respect.  Employees learn where their risk dispositions assist the behaviours expected of them and where behavioural tendencies need to be reined in. This provides a basis for compliance that involves insight, staff development and an individual agenda for personal responsibility.  Get the attitude and behaviour right and the statistics will take care of themselves.

Geoff Trickey

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