Download - Risk awareness at work: 10 principles

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Risk awareness @work:10 principles

Muel KapteinMay 30, 2016

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About myself

• Partner KPMG Risk Consulting

• Professor RSM Erasmus University


Risk unawareness in private live?


RA Principle 1: Definition RA

Risk awareness (RA) is not just about someone’s knowledge of

risks.


Ad 1: Definition risk awareness

Risk awareness is at the right moment

realizing and understanding the potential negative and positive

consequences of your behavior

and things you are confronted with.


RA Principle 2: Importance RA

Risk policies are dead without risk awareness.


Ad 2: Importance risk awareness

Hinge between risk policy and behavior

Risk policy organization

Behavior management

and employees

Risk awareness


Ad 2: When risk awareness lacks

1. Not seeing consequences (at all or at right moment)

2. (Partly) ignoring seriousness of consequences

3. Not (correctly) relating to one’s own responsibility


RA Principle 3: Components RA

Components of risk awareness are knowledge, commitment and

ability.

Knowledge of:• Situation• Facts &

causalities• Self

Commitment to:• Stakeholders• Organization

• Topic

Ability consisting of:• Alertness• Analytical• Balanced


Ad 3: Finding the right RA balance

100% riskaverse

100% riskaggressive

What is the right balanceat your organization?

? ? ?

No business

No business


How to create the right

risk awareness?


RA Principle 4: Risk culture

Risk culture is the breeding ground for risk awareness

asrisk culture is the collective risk

awareness.


Ad 4: Risk culture modelClarity

DiscussabilityAc

coun

tabi

lity

Achievability

Risk awareness


Ad 4: Example: achievability

Under time pressure, people pay less attention to risk due to tunnel vision:

At the same time, is there still risk awareness under high time pressure?


RA Principle 5: RA Management toolbox

There is a big variety of measures to improve risk culture and risk

awareness.

But what is the right mix?


Ad 5: How risk awareness is raised in traffic


Ad 5: Ingredients RA management toolbox

Presentingfacts

Expe

rienc

e

RolemodelingWrittennorms


Ad 5: Ingredients RA management toolbox


Ad 5: Example how safety RA is raised

paal


RA Principle 6: RA Biases

Improving risk awareness requires knowing prevailing biases.


Ad 6: Biases Making you risk aware

1. “It’s not me” making it personal2. “I will not fail” making you

vulnerable3. “It is only me” making you think on

collective level4. “I can permit the risk” making you feel sorry


RA Principle 7: RA Challenge

Bringing risk awareness to the required level is especially difficult

and important when negative consequences are (1) unlikely, (2) for others, (3) in the long term (and for unknown risks, yet) and (4) without

early warning indicators.

To invest in something that is not rewarded is not motivating.


RA Principle 8: RA Paradox

The less risks you takethe more you are going to take

because no negative consequences make you overconfident and reckless.

Also, the less risks people are allowed to take, the less risk aware they

become.


RA Principle 9: Negative impact RA

Trying to raise risk awareness of people may also make them less

risk aware.


When and where are risk highest?

When: it does not rainWhere: on roads without this sign


Becoming a hero by taking risks

© 2016 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International.Becoming obstructive


To prevent habituation,

risk awareness interventions

should be changed

Ad 9: Or reducing impact


Ad 9: RA intervention typology

Risk Unknown

Risk Denial

PresenceWeak Signal Confront

PresenceStrong Explain Shock


RA principle 10: RA Disclaimer

Risk awareness is no guarantee for right risk behavior, “just” a

necessary condition.