How We Make Decisions About Risk

Originally posted on April 13, 2013 @ 9:05 PM

How We Make Decisions About Risk

Most leaders are not young, it takes time and experience to develop leadership. When we look at how leaders make decisions we observe that their decisions are not that rational. We often think that leaders weigh up all the pros and the cons, consciously analyse the alternatives and then make a judgment. But this is not the case, they don’t need to make decisions this way. We don’t need to make decisions that way.

Research (Moore-Ede, 1993; Lehrer, 2009; Klein, 2003, Nortranders, 1999, Galdwell, ) indicates that most leaders make most of their decisions based on intuition. Intuition is not some ‘magic’ emotional capability but rather – the way people translate experience into action. In fact, most people make their decisions on intuition, it makes decision making faster and easier. Amidst all the complexities of modern life we learn patterns and cues that help us make decisions based on experience.

In the world of risk and safety it is not often one reads about the importance of the imagination and intuition yet, these are more important than any risk and safety management system. When it comes to decision making and systems, most leaders don’t really use systems, they use intuition. They use the cues before them, identify those cues in microseconds and make decisions that ‘translate their experiences into action’. Most leaders don’t need to think about most decisions, they just know. This kind of knowledge is called ‘tacit knowledge (Polyani) or implicit knowledge and it’s with this knowledge that we make most of our decisions.

We don’t have to deliberately think through things to make good decisions. Humans learn through experience how to take ‘calculated risks’. Whilst they know the outcome of their decision is not always certain, they know by intuition that their ‘educated guess’ is more reliable than 12 hours of analysis by committee. Besides, there is simply no time for such a rational process.

As humans learn how to make decisions in life, they get quicker at making those decisions. Humans, once experienced, learn cues and signals that trigger responses that are automated (automaticity) and fast. When we first learned how to drive a car the experience was intense, concentration was required to do everything. As we become experienced at driving nearly every decision is made on automatic, we don’t have to ‘think about’ each driving decision. This is the same for most things humans do, this is why we are ‘creatures of habit’. We can make most of our decisions without concentration, we make them by intuition and automaticity. Most of the time this kind of thinking and decision making is highly reliable and fast.

Unfortunately, this is not the way regulators and legislators think about risk and safety. Most orthodox approaches to risk and safety deny the importance of imagination and intuition in decision making. Their myth is that such notions are unreliable and unscientific. We should reject their ideas, that is not how humans make decisions.

The risk and safety community should be talking much more about imagination, risk intelligence and intuition that they should about conformance to checking boxes. There is no evidence to show that decision making by systematic analysis is any more effective than decision making by intuition. However, there is plenty of evidence to show that replacing intuition with analysis doesn’t make things good, rather it makes decision making by leaders much worse. This was confirmed by the work of Nobel prize scholar Herbert Simon who discovered the concept of ‘bounded rationality’. There is plenty of evidence to show that when people ignore intuition and devalue imagination, decision making quality deteriorates.

The reality is that most people simply cannot comprehend the volumes of systems they are meant to know and process, that are intended to direct their decision making. All the evidence shows that volumes of systems are not used in leadership decision making nor in crisis decision making. Most decisions are made using intuition and imagination.

We will only know how to decide about risk (what is uncertain) based on the knowledge we already have, and the ability to imagine (based on experience), what might happen.



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