Develop an intuitive sense of risk

In 2001, many U.S. government intelligence agencies had clues warning of an impending large-scale terrorist attack. Yet, none set off any alarm bells. Similarly, the risk exposure of most banks in 2008 was clearly too great. Yet, no one was sufficiently concerned to take the measures required to prevent the collapse of the financial system.

Sophisticated warning systems were in place in both of these cases. However, these systems were not equipped to trip the alarm with regard to vague and totally new types of risk. Although many individuals had a feeling that the signals observed were hiding something more serious, they were not able to communicate this gut feeling more broadly.

The need to detect risk sufficiently upstream is an ever-present challenge, at both the project and organization level. Most experts underline the importance of better early warning systems and rigorous risk detection procedures. Yet, our selected publications point out that these systems see only what they are designed to see. In complex and rapidly-changing environments, in addition to these tools, people must also be able to detect risk intuitively:

– Increase the frequency of direct contact with potential sources of problems, to limit risk-distorting filters.

– Encourage people to share their intuitions with the rest of the organization.

– Hone risk perception skills by testing and analyzing intuitions after the fact.