Health and safety procedures are concentrated on identifying and managing specific risks, but understanding an individual’s typical response to risk is just as important, says Geoff Trickey.
Do you know your risk-type? Like your fingerprints, your risk-type is one of the things that distinguishes you from others. But, unlike your fingerprints, your risk-type has profound implications for almost everything you do – your job, your finances, your holidays, your interests and recreational activities – even your relationships. Your risk-type influences the way you cross a busy street, drive your car, use ladders, tools and garden equipment or think about what you drink or eat; the list is endless.
All human activity involves risk but, with today’s health and safety obsession, we are more accustomed to focus on the risk itself (what might there be out there that could harm us), than on the way we instinctively respond to risk; (its personal impact, our capacity to embrace it, to manage it or to exploit it). Yet this is a critical and distinctive area of individual difference. Your very nature – temperament at the deepest level – is programmed to deal with risk in one way or another. Evolving over countless generations, your Risk-type will have been a key to survival and will still be an influential dynamic in your everyday life.
Over-protective?
The prevailing approach to risk inevitably works to the lowest common denominator as, attempting mission impossible, officials and legislators try to identify and eliminate all risk, and with some pretty silly consequences; carpenters are banned from sweeping up wood chippings (dust may cause nose cancer), Santa is required to wear a full body harness (he may fall out of his sleigh), employees must be trained before moving their own chairs (in case of strain). Children must wear goggles when they handle Blu-Tack and protective clothing to play conkers. We talk about hazardous materials, choking hazards, trip hazards, hazardous objects, and hazardous situations – but not about hazardous people! A knife, a gun or a pointed stick may indeed be risk hazards, but depending on who has got hold of them!
It’s about the risk-taker
This ‘lowest common denominator’ approach fails to recognise the role of individual personalities and personal responsibility in risk taking. The banking system failed because the people involved were impetuous and oblivious to risk; car accident mortality is heavily weighted towards the recklessness of youth. This is the other ‘human’ half of the equation - the ‘WHAT and WHO’ of risk – and it is arguably the most important half.
The fact is that at one extreme people love the exhilaration of risk taking while at the other end of the spectrum people fear even to leave their own house. There are those who plan and organise everything to the last detail, and others that are impulsive, spontaneous and experience seeking. However much one legislates, some will bend or ignore the rules, and others didn’t need the rules in the first place. The evidence is all around us. Over 2,000,000 motorists were caught on speed cameras last year. In spite of everything, around 20% of the population still smoke. One-fifth of homes don’t have smoke alarms and more than half the population is likely to have gambled in the past week, contributing to the £42bn revenues of that risk-based industry. Add to this the popularity of dangerous and extreme sports, the attraction of challenging fairground rides to millions and you get the picture. The spectrum of risk taking, from high to low, is deeply embedded in human nature.
Risk-type indicator
Our ‘Risk-Type Compass’ is an assessment process that places individuals in one of eight risk types. These cover a complete spectrum represented graphically as a compass. Each neighbouring type round the compass has some features in common, and the risk-types that face each other across the compass have opposite characteristics. Those placed nearest the outer rim are the most extreme examples of their type.
Figure 1: Risk-Type Compass
This model is the result of a two-year research project commissioned by clients of Psychological Consultancy Limited (PCL), Columbus Wealth Management. Columbus was anxious to help investors to understand their personal tolerance for risk, helping them to decide which kinds of investment vehicles would be most suitable for them. PCL was surprised to discover that, although personality assessment is now widely accepted as a profiling tool across all business sectors, there was very little evidence of its influence within the world of financial advisers and assessment of their investor clients. But, of course, interest in risk extends far beyond the financial sphere. Whether you focus at the level of the individual, the family, the organisation or the country, or take a global perspective, risk is as common as the air we breathe.
The risk types
The Risk-Type Compass identifies four ‘pure’ types (marked P in figure 2 below), and four ‘complex’ types (marked C in the table below). The latter include those with extreme scores on both axes of the compass who combine characteristics from the ‘pure’ types on either side. See figure 2.
Figure 2: Pure and complex risk types
Using the information
Risk-type offers a taxonomy and a much needed vocabulary that allow us to come to grips with this critical and fundamental aspect of our nature. Risk is an intrinsic factor in all areas of human activity, from financial institutions to emergency services, from kitchen to factory floor or from playground to rugby pitch. From the self-awareness perspective and from the perspective of an individual’s suitability for a particular role, we need to know how people are equipped to deal with risk. The model offered by the Risk-type Compass takes a useful step towards a better understanding of these issues, and provides an assessment tool to support staff deployment and decision-making.