Risk in two rooms
The twins, J and K, want a hot tub. They decide to approach their parents, A and Z, but separately rather than together.
J finds A washing the car in the driveway. A is interested in the idea and they share dreams of soaking in the hot tub after a long day at work and school (after homework, of course). They think about the possibilities of inviting friends and family over for a party with the hot tub at the center. Ahhh!!!
Meanwhile, K is chatting with Z in the garden. Z immediately thinks about the cost. They will have to cancel the planned purchase of new laptops for the twins. Then the hot tub will have to be cleaned, and that will fall to J and K. As they talk about how disruptive it would be to have new water and power lines installed for the hot tub, they hear a car – their car – driving away.
A and J are on their way to the store, excited at the opportunity to buy a hot tub with installation included. After all, there’s a sale on that ends today!
Did anybody make an informed and intelligent decision?
No.
Each pair only considered one side, either the risks or the opportunity. Nobody considered both or found a way to see whether one side weighed heavier than the other.
This is what happens with traditional risk management. It provides a list of risks. It doesn’t help…
