Risk is a Personal Thing

Research shows that individual perception of risk varies broadly. How can we be effective in managing risks at an organizational level?

Chances are that you don’t look at the aircraft type when making your reservation and buying your ticket. You simply want to find the most convenient flight option at the best price available. You trust the system to safely take you to your destination no matter which aircraft you happen to be on that day.

Now imagine that the Boeing 737 Max is back in operation after months of world-wide grounding of the aircraft after two crashes only 5 months apart. The company has lost billions of dollars in market value and lost sales since these incidents. Media coverage has been relentless and you have probably heard how Boeing may have cut corners in getting this new aircraft quickly to the market. Even the Federal Aviation Administration (FAA), who is supposed to be watching out for safety, has been blamed for poor oversight.

Would you hesitate to book your flight if you knew you would be on this aircraft even if everything was now said to be ok? Would you rather take another flight even if it meant buying a more expensive ticket?

There are some who would never fly this particular aircraft again, even if they are a frequent flyer. Others would have no problem at all. 

In a recent online survey conducted by National Public Radio (NPR), a large majority of the 1600 respondents said in a variety of ways they won’t fly on the 737 Max even if the FAA said “it’s good to go”! But there were hundreds of others who wouldn’t hesitate at all. Here are two very different viewpoints from seasoned travelers:

I am going to be watching to make sure that if it is released before my flight date, that I’m not on that plane.

In my day-to-day life, one of the safest things I do is get on a commercial aircraft

It is interesting to see so much divergence in individual opinions and preferences. Risk of taking a commercial flight is no different for an individual on aircraft A vs. another individual on aircraft B if both aircraft meet the required safety standards, operated by similarly qualified pilots and follow the rules of commercial aviation.

Yet, the perception of risk in the wake of the Boeing 737 Max incidents is on diametrically opposite poles for different people.  

This huge difference in risk perception plays out in many other areas of technology and routine daily activities. Research has shown how social and cultural factors shape our attitude about risk and uncertainty. Risk is a combination of severity (how bad the outcome could be) and probability (how likely it is going to happen). We need to remember that every individual is making an assessment of risk within the context of their own worldview:

Severity – how bad the outcome could be (for me)

Probability – how likely it is going to happen (to me)

We are more likely to underestimate the risk of texting while driving a car if we have never been in an accident. After all, we know how to drive the car and it takes only a few seconds to read a text and reply. What could go wrong? Ask someone who got hit by a distracted driver, and you are going to hear a very different answer.

On the other hand, we are likely to overestimate the risk of a nuclear power plant because we have heard about Three Mile Island, Chernobyl and Fukushima. And who can ever forget Hiroshima and Nagasaki. Nuclear radiation does terrible things to people; not in my backyard! Ask an expert in nuclear engineering, and they will say operating a nuclear power plant is much safer than driving a car.

I am confident that the Boeing engineers who designed the Maneuvering Characteristics Augmentation System (MCAS) software for the 737 Max to manage the risk of a stall, were diligent in addressing different risks. However, given the long history and prior safety record of the base 737 aircraft model, they likely made assumptions about the pilot’s ability to handle a situation where inaccurate angle-of-attack (AOA) sensor readings could drive the MCAS to make unwanted, and potentially unsafe, corrections.

If only, someone had asked the question “what if the pilot fails to recognize that AOA is faulty and MCAS must be turned off?”.

Or maybe they did, and concluded “pilots have been flying the 737 for many years, they will know what to do”.

I have had these situations and discussions many times in my professional career. It is important to remember that risk management decisions are made by teams of individuals who have their own individual perceptions and biases. What we need is a system of checks and balances, which enables individual expertise to be leveraged while minimizing the influence of these biases.

The best way to manage bias is not to suppress it, but to create an environment where diverging viewpoints can be freely discussed and evaluated to facilitate a more desirable and effective solution.

The issue, then, is not with individuals, but with the management system.

Here are a few considerations if you are responsible for risk management in your organization:

Culture – what are our organizational values and how do they influence our approach to risk management?

Policy – do we have a policy for risk management and how well is it understood and practiced throughout the organization?

People – do we have the right expertise, both technical and managerial?

Diversity – do we have diversity in thought, driven by diverse social and cultural background and experiences?

Empowerment – do we have an environment where all views are openly expressed and vigorously debated before our teams reach their final conclusions?

When tragic events like the Boeing 737 Max crash happen, our instinct is to find the immediate issue(s) so we can fix the problem and hope it never happens again. Inevitably, we also try to find someone to blame!

We must look deeper at our management system if we are truly committed to never repeating such tragedies.

You may also like the following articles

27 billion reasons to get serious about risk management

Dangerous does not equal unsafe

May the force (of culture) be with you

Can your risk management prevent a recall?

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Resources:

NPR – Polls Shows Travelers Still Fear 737 Max As Boeing Tries To Get It Back In The Air

Perception of Risk – paper by Prof. Paul Slovic, University of Oregon

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Photo Credit:

Aditya Doshi via Flickr

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I love to learn, share ideas and enjoy interesting conversations. I am happy to share my experiences and lessons I have learned along the way. I hope to learn from your experiences as well. If my articles spark your interest and curiosity, I would love to engage with you. Leave a comment below, or send an email from my LinkedIn Profile.

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