Ask leaders what their organisation’s biggest strength is, and chances are they’ll reach for the adage of “our people are our greatest asset”. On the face of it, this sounds compelling. After all, employing people costs money, and you wouldn’t want to think of what could well be your largest expense category as not being valuable. Yet, what we often don’t think about, or indeed like to think about, is that those same assets are also that organisation’s most significant risk.
When things go wrong, there is usually a human component involved — either causing the problem in the first place or making it worse by the reaction to it. Our guest on this show, Christian Hunt refers to this as ’human risk’, which he defines as “the risk of people doing things they shouldn’t or not doing things they should”. It’s a broad definition encompassing everything from intentional wrongdoing, such as fraud, to “I was tired, and I made a mistake”.
Christian helps companies to mitigate human risk using Behavioural Science - the understanding of the real drivers of human decision-making. By designing environments that recognise human risk, we can mitigate its impact. This isn’t just relevant to risk management. The way we manage human risk impacts what Christian calls ‘human reward’ — getting the best out of people.
The more we mitigate human risk, the more we risk reducing human reward. Equally, if we unleash human reward, we’ll be running more human risk. Particularly in the Knowledge Economy, where people are being hired to do the things machines can’t — tasks that involve judgement, nuance and emotional intelligence. It’s when we’re at our best, but also when we’re at our riskiest.
In our discussion with Christian, we’ll explore all of these dynamics and what we can do to mitigate them.
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