Consider this scenario; you’re setting off to meet your friend Peter for the picnic that you have planned. You’ve googled the journey, checked for delays, topped up on fuel, and spent the last week avidly monitoring the weather. You have even earmarked a nearby restaurant just in case it rains. Peter, it seems, although excited about the picnic, hasn’t even begun to think through his plans for the journey; punching the postcode into his GPS as he pulls out of his driveway…as for the weather? Let’s cross that bridge when we get there!

This scenario highlights vastly different approaches to risk and uncertainty that go well beyond the planning of picnics. The different dispositions of these individuals will potentially have a far-reaching impact on other aspects of their lives as well as on any decisions they are making at work.

Decision making draws on two different systems of the brain

Neuroscience informs us that decision making involves both Emotion (how anxious or fearlessly risk-embracing we are) and Cognition (the degree to which we can tolerate uncertainty or need to make sense of everything). These undercurrents have a persistent and pervasive influence; arguably they are our most defining and consequential personal characteristics, as Michele Wucker argues in her recent book; “You Are What You Risk”. The decisions we make determine the pattern of our lives; everything from the seemingly trivial; how organised we are about shopping, saving, crossing roads, punctuality or planning ahead; to the seriously important; how we manage money, relationships, family responsibilities, and careers.

These risk dispositions reflect deeply-rooted individual differences. Just like the two friends above, our decision-making propensities come naturally, just a part of our make-up – we take it for granted. In a team context, things get complicated because these individual differences are compounded within the dynamics of group decision making. This decision-making chemistry within any team will impact future success and organisational survival. In terms of risk-taking and risk aversion, it really does matter who is playing a part on that committee, that working party, that task force, or that board.

Team decision making 

Workplace decision and team decision making, we know, can be problematic. With 60% of managers reporting that bad workplace decisions are just as frequent as good ones, this Mckinsey article also highlights how cognitive biases ‘affect the most important strategic decisions made by the smartest managers in the best companies’. So what can be done to make team decision making more effective?

Well…many different forms of decision-making bias have been highlighted over recent decades. From reputation bias (check) to confirmation bias (check), availability heuristics (check), overconfidence bias (check); and many more. The elephant in the room, of course, is the individual bias that each person brings to the table. The blithe assumption is that everyone is somehow more-or-less neutral in this respect – and that is far from the truth. Another assumption is that we all understand our own risk dispositions and their implications – and that too is questionable. Risk dispositions depend on the interaction between emotion and reason and these are the two dominant influences in a person’s mental life. To fully grasp their implications is not a simple matter. How much risk we are comfortable with and why we approach decision making in the way we do are matters of self-awareness and personal insight and there is always room for growth.

‘true knowledge……. has its foundation in self-acquaintance’ Plato

The Risk Type Compass places everyone within a 360-degree spectrum of risk dispositions based on the assessment of Emotion and Cognition. This is segmented into eight distinctive Risk Types as a basis for interpretation. It provides a basis for improving our understanding of ourselves, who we are, and why we make the decisions that we do. Let’s turn back to our friend Peter to illustrate this.

Peter is an Adventurous Risk Type. Impulsive in his risk-taking, readily embracing change and not easily discouraged. Some will see him as reckless, Clare, however, is a Prudent Risk Type; systematic, self-disciplined and more vigilant about risk. Some will see her as over-cautious. They may seem to live in different worlds but by exploiting their differences and collaborating, rather than confronting, potentially Peter and Clare can unveil insights about both risk and opportunity that could easily have been missed independently. In a work context, this more mature team dynamic encourages cohesion, mutual respect, collaboration and team effectiveness. Within the wider team, this mitigates the threat of groupthink and a siloed culture and maximises the diversity of the group.

And how does this relate at an organisational level? 

Identifying risk type at an organisational level allows us to map the actual risk landscape of the organisation; how are the eight different Risk Types distributed? Is the organisation predominantly risk-taking or risk-averse? In which section, division, and function are they concentrated? Which teams are evenly balanced? Unlocking risk culture in this pragmatic way provides clarity on where intervention may be needed. Are there areas of the business where the balance is counterintuitive (like a dominantly risk-taking finance department or a risk-averse sales team), or where a too similarly disposed section would be vulnerable to groupthink?

The Risk Type Compass is a tool that assesses individuals. It is personally relevant in terms of growing self-awareness, relevant to teams in highlighting the group dynamic and, for a wider perspective, it allows for the mapping of organisational risk culture.

So how do you approach decision making?

Take a free, shortened, version of the Risk Type Compass assessment to find out how you approach decision making, by clicking here (access code RTCINSIDER). To discuss your report further, or find out more about our Risk Landscape tool, get in touch.

So how do you approach decision making?

Take a free, shortened, version of the Risk Type Compass assessment to find out how you approach decision making, by clicking below (access code RTCINSIDER). To discuss your report further, or find out more about our Risk Landscape tool, get in touch.

Take the assessment