It won’t happen to us.
As a risk professional my job is to educate and advise clients and hopefully help them to make informed decisions on risk. However, it can be difficult to influence decision makers when cognitive biases subtly distort their perceptions and engenders the false belief that "it won't happen to us". There is a common tendency to view uneventful periods as an indicator of enduring stability and to downplay potential threats and hazards. Furthermore, a lack of experience with significant risk events can fuel the belief that such occurrences remain unlikely.
This mindset is commonly referred to as “Titanic Syndrome” and describes the belief that a disaster or catastrophic event could never happen to us. It is aptly named after the sinking of the RMS Titanic in 1912, which was widely considered unsinkable at the time due to its advanced technology and cutting-edge design. Titanic syndrome stems from a variety of common biases including, optimism bias, overconfidence, lack of experience, normalcy bias and groupthink. Let’s examine each of these in more detail.
Optimism bias: People tend to believe that positive events are more likely to occur while negative events are less likely. This bias can lead to underestimating the likelihood and consequences of potential risks.
Overconfidence: People often overestimate their abilities to predict and control outcomes. This overconfidence can lead to the belief that an organization is better prepared to handle a risk than it actually is.
Lack of experience: If an organization hasn’t previously faced a significant risk event, there can be a tendency to downplay the likelihood of future events.
Normalcy bias: People tend to underestimate the possibility of a significant risk event, assuming that things will continue as they normally do.
Groupthink: In organizations with strong group dynamics, dissenting opinions may be suppressed, and members may conform to the dominant view that nothing bad will happen.
The biases outlined above are all illustrative of a common tendency to downplay or dismiss risks, even when the evidence suggests otherwise. So, what can we do to counter these biases and help organizations make informed decisions on risk related matters? Addressing these challenges necessitates not only a reframing of the way risks are communicated, but also a strategic recalibration of organizational mindsets to accept and embrace a more nuanced understanding of vulnerability and preparedness.
Reframing risk communication
Firstly, we need to shift the focus on risk communication from a simple presentation of risk ratings to a comprehensive picture of the broader risk landscape. Present risks in context by highlighting their relevance to the organizations industry, geography and history. Provide concrete examples and relevant scenarios to make abstract risks more tangible and relatable and make a business case for the impact proactive risk management can have on the organizations overall health and stability.
Enhancing risk perception
Educate stakeholders and raise awareness about cognitive biases and their impact on decision-making. This can be achieved by encouraging self-assessment and introspection among key decision-makers to identify their own biases and actively question their assumptions. One of the easiest ways to challenge our assumptions is to ask the simple question, “what if I am wrong about this?” This question prompts you to consider the consequences of being mistaken, encouraging you to step back from your beliefs and review them more critically. By fostering a culture of critical thinking, individuals will become more receptive to recognizing and addressing potential risks.
Encouraging vulnerability acceptance
Champion the idea that acknowledging vulnerabilities is not a sign of weakness, but rather a sign of foresight and strength. Facilitate open discussions about potential risks and their implications and share stories of other organizations that underestimated risks and suffered consequences, emphasizing the importance of vulnerability acceptance. Encourage leaders to openly discuss past instances where the organization narrowly avoided a significant risk and highlight the role of luck in this "near miss" rather than sound risk management practices.
Tailoring communication for different stakeholders
Recognize that different stakeholders have varying levels of knowledge and risk literacy. Tailor risk communication to resonate with their individual perspectives and concerns. For instance, executives might respond more favorably to data-driven risk analysis that is linked to a business case, while frontline employees might connect better with relatable anecdotes that have practical implications on their daily work. Consider your audience and tailor your communications accordingly.
Strive to be an enabler rather than a barrier to operational success
In complex environments it’s easy to come up with reasons why something isn’t possible however, our role as a risk advisor is to be an enabler and facilitate the task at hand while ensuring risks levels are kept as low as reasonably practicable (ALARP). This doesn’t negate our “Duty of Care” obligation to the personnel involved, however by working collaboratively and employing innovation and adaptability we can usually achieve progress while also minimizing the negative consequences of risk.
By implementing these practical strategies, you will see a gradual shift in mindset from the “it won’t happen to us” perspective to a more proactive, informed approach to risk management. Over time these changes should foster a culture where the risk professionals advice is not only heeded but valued as a critical component of successful decision making.
Stay safe.
