Don’t Trust Your Brain (Risk Assessment – Part 2)

When psychologists talk about how a person thinks about their own thoughts, they call it “metacognition.” It deals with the accuracy with which a person can evaluate how they’re thinking about something, and then use that knowledge. So, when someone asks you how you’re feeling, you’re making a metacognitive evaluation of your emotions.

We take a lot of the work that goes on inside our heads for granted. We assume that when we see something that’s it’s exactly as we remember it. We saw it. How could it not be exactly that? That’s the dilemma. It all appears very seamless, but there’s a lot of filters that it all goes through, and our metacognitive evaluation of an event can be very poor.

All of this works into the topic of business risk assessment very well. Human beings are traditionally very bad about being able to properly assess levels of risk. It’s ingrained into us. When we see something bad happen to another person, we tend to assign fault to the person. When we see something good happen to another person, we tend to assign the reason for that to fate or luck. However, it’s flipped when it’s happening to us. When a bad thing happens to us personally, we tend to want to believe that it’s out of our control, and when it’s good, we had complete control over our success.

That all feeds into how we assess risk. We worry about things that have relatively little chance of happening to us, and then ignore the things that can happen to us with greater frequency. That is, we fear things that are generally out of our control, and ignore things that we can control. Richard Restak, gives a great treatment of this in the first chapter of his book, “Poe’s Heart and the Mountain Climber.”

To sum up his ideas, if you take some of the things that people are really worried about (struck by lightning, killed in an earthquake, dying in a plane crash, eaten by a shark, etc.) and compare them to other “bad things” most people who worry about these things should really just hide under their beds.

“Statistically, a specific air traveler would have to get on a commercial airplane daily for more than eight thousand years before falling victim to a multiple-fatality airplane crash.”

  • Car Accident – 1 in 18,000
  • Bus Accident – 1 in 4, 400,000
  • Train Accident – 1 in 5,050,000
  • Motorcycle Accident – 1 in 118,000
  • Walking – 1 in 45,200

And really? The home is the second most dangerous place in the world.

And how this all fits into the business of risk assessment, is in just being aware of your inability to properly assess risk on the fly. If you let your brain decide for you without carefully thinking about it, you’re probably not going to make the best decision. Use evidence-based strategies and make sure that you’re making the best decision, and don’t react from the hip.

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