Cars are Safer and Traffic Deaths are Up!

accident-v2Risk Homeostasis is back in the news.

We have previously written about how we accept a certain level of risk then use risk protection measures not to be safer, but to increase our risk taking so our net level of acceptable risk stays the same. That is risk homeostasis.

It has been broadly reported recently that there has been a huge increase in traffic fatalities in the United States in the first half of 2016 compared to the same period in 2015: 10.4%.  Understandably, many are gravely concerned.

How does this relate to risk homeostasis? By any estimation, vehicles and highways have become safer.  Significant effort and resources have gone into design improvements that have increased safety.  Cars have airbags, ABS breaking systems, crumple zones and even some now have automatic emergency driving features to help avoid accidents.  Highways have many more barriers that give way on impact to reduce the chances of injuries or fatalities.  Yet traffic deaths are up dramatically.

This is risk homeostasis. The safer things become, the more we take risks.  Knowing that we are less likely to die while driving a safer modern vehicle, we take more risks such as texting while driving.  Sad but true.

The administrator of the National Highway Traffic Safety Administration recently announced a goal of eliminating traffic fatalities in the U.S. – all of them – within 30 years. A laudable goal but exceedingly unlikely.  All the safety features in the world will not change human nature.

Lessons from an Innovation Superstar

Under Armour 2 - croppedUnder Armour founder and CEO Kevin Plank is nothing if not an entrepreneur. He started the company in 1995 in his grandmother’s basement.  His inspiration was to find an alternative to the cotton shirts he wore under his pads when he played football at the University of Maryland.  Those shirts got soaking wet, heavy and slowed down the players.

Under Armour logo - cropped

His creation now has nearly $4 billion in annual sales, 13,500 employees and is an innovation superstar. Not satisfied, Plank is setting out to create an entirely new component at Under Armour.  He is leading a charge into fitness technology.  Along the way, he has invested nearly $1 billion buying three activity-tracking and diet-tracking mobile app companies.  He sees this effort aligning well with the Under Armour’s mantra to “make all athletes better.”

Whether he will succeed in this effort is unknown. What is fascinating is the culture he has created in the last twenty years that so thoroughly embraces innovation to the point that it created an entirely new market segment – high performance athletic wear.

Not surprisingly, Plank is into continually sending the message that innovation is prized and desired. (As obvious as this seems, my experience with client organizations shows that this is astonishingly rare.)  One of the ways he continually sends the message is by having admonitions prominently displayed around the Under Armour headquarters in Baltimore.  They include:

Perfection is the enemy of innovation. 

Respect everyone. Fear no one.

And my favorite:

Think like an entrepreneur. Create like an innovator.  Perform like a teammate.

A simple but powerful concept he promotes at Under Armour is called “guardrails.” He promotes the idea of providing his people with figurative guardrails that establish the boundaries within which they operate.  Presumably some guardrails apply to all and some are specific to individuals.  Regardless, it is a brilliant concept.  Guardrails allow creative and motivated team members the latitude to do exciting things with boundary clarity.  Brilliant.  The results of the organization speak for themselves.

Risk Homeostasis – the impact on organizations

Leap-Cropped-SmallerIn the previous post, we talked about people risking more if they have an increased sense of protection from the possible negative outcomes of their actions.

The significance of this in organizations is obvious and powerful. If the leaders in an organization genuinely support their people when risks do not yield the desired results, they will get more initiative and innovation.

In this setting, the “safety devices” are not automobile airbags or seat belts, but a culture and leadership team that values initiative even when the results may not be as intended. The important qualifier is that poor outcomes cannot be due to flawed execution. Clearly, that is not acceptable. But if the execution was sound yet the results were not as intended, it is vital that the person or team that took the initiative be praised and rewarded. Not doing so will send the clear message that only successful risks are acceptable and since risk-taking is inherently an uncertain process, initiative and innovation will be stifled.

So, provide your people with “initiative & innovation airbags” and they will be much more inclined to drive assertively towards your organizations goals.

Risk Homeostasis – the more things change the more they stay the same

bubble wrapped car, croppedLet’s talk for a few minutes about risk homeostasis – a fascinating concept put forth by Gerald J. S. Wilde. The premise is that every person has a certain level of risk with which they are comfortable then use risk protection measures not to be safer, but to increase their risk taking so their level of acceptable risk stays the same.

An example would be driving a car with lots of safety features such as seat belts, front and side airbags, ABS brakes and sideview (blind spot) assist that lets you know a vehicle is next to you but hard to see with your peripheral vision or mirrors.

Now compare driving this car with driving a car from the late 1950s or early 1960s with none of these safety features. Risk homeostasis tells us that the same person would drive the car loaded with safety features in a riskier manner. The idea is that all the protection provided by the safety features allows for more risks to be taken yet the original level of risk tolerance is still maintained.

If risk homeostasis is valid, the same person would drive the older car without the safety features more cautiously and as a result achieve the same level of risk as driving the safety feature loaded car in a riskier manner.

The same idea would suggest that a motorcyclist wearing a helmet and protective leathers with carbon fiber armor plates would drive in a riskier manner than if the same person was on the same motorcycle in shorts, a T-shirt and no helmet.

I leave it to you to decide whether you think risk homeostasis is valid. Some researchers think it is not.

Here is one last data point as you consider the validity of risk homeostasis:

When drivers see bicyclists wearing helmets, research shows that they take slightly less care with passing them than bicyclists without helmets. The results of a study published in Accident Analysis & Prevention in March 2007 tells us that drivers give a bicyclist not wearing a helmet on average 3.35 inches more room when passing them than if the bicyclist is wearing a helmet. Consider that this all happens spontaneously as the driver passes the bike without much time for the driver to contemplate their behavior in advance. They likely do it all rather intuitively.

So, do you think risk homeostasis is valid?

 

Are Some People Born Risk-Takers?

tight_rope_walkerI have said many times in books, articles and speeches that there is no ideal level of risk inclination – no perfect Risk Quotient (RQ). The risk adverse can make a vital contribution by being more cautious and deliberative. The risk inclined can help others overcome uncertainties and provide a valuable bias for action.

But it is reasonable to wonder to what extent a person’s RQ is determined by genetics as opposed to by life experiences – the old nature versus nurture discussion.

You may have heard about the “risk-taking gene.” This is the research that indicates that a certain variation on the DRD4 gene correlates to a greater inclination to pursue risky activities and seek higher levels of physical stimulation.

Now there is more research that indicates that certain physiological traits influence our risk inclination. Researchers at University College London, the University of Sydney, the University of Pennsylvania, New York University and Yale University have determined that the density of the cells in one part of our brain influences our comfort level with financial risks. The thicker our right posterior parietal cortex the more we can tolerate financial risk. If it is thinner, the opposite is true.

Is this interesting? Yes. Is this important? Only somewhat.

The important point is that we all have different innate RQs. They can change significantly due to life experiences and our current situation. But research is showing that we are born with physical elements that influence our personal relationship with risk-taking.

How does this impact you? The next time you are at a loss to understand how someone sees the exact same facts and circumstances so differently than you, remember that some of the difference may be due to how you both were created. That may make it easier to deal constructively with the variance.
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More on this topic is available at: http://online.wsj.com/articles/so-you-think-youre-a-risk-taker-1414207254

Dads Well-Suited to Teach Kids to Risk

father, croppedIf you’re like me, you see roughhousing with the kids as a great way to help them expend some of their boundless energy with the side benefit of some parent/child bonding.  But research reveals additional benefits – roughhousing teaches risk-taking to children.

A recent article in the Wall Street Journal tells us that many researchers believe the bond established by father/child play and roughhousing surfaces later in a child’s life when “the father serves as a secure base allowing the child to explore and take risks.”

The benefits go further according to the article.  They include helping the child with emotional intelligence and boundary-setting.  It goes on to state, “Many fathers walk a fine line during play between safety and risk, allowing children to get minor injuries without endangering them, says a 2011 study of 32 subjects in the Journal of Developmental & Behavioral Pediatrics.  Researchers say this can instill emotional intelligence under fire, and an ability to take prudent risks and set limits with peers.”

Interesting.  Sounds like father/child roughhousing is not to be missed.

The article is titled “Roughhousing Lessons from Dad.”  It was written by Sue Shellenbarger and is available on the website of the Wall Street Journal.

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Encourage Disobedience

Download-Button v2Here are the first two sentences in a recent article that got my attention:

“Want to be more competitive? Then empower your most technologically disobedient employees.”

The core message is that employees want to do their job and they will seek the tools to do so.  If the corporate Information Technology (IT) department does not provide them with what they need, the will find the applications they need on their own even if it means paying for them.  The proof?  According to research conducted by Frost & Sullivan referenced in the article “80% of people working for organizations with more than 1,000 employees go around the IT department and use (or even buy) software.”  The practice is referred to as “Shadow IT.”

The idea is similar to my admonition to achieve innovation by accepting failures, because you won’t get one without some of the other.  Are there risks?  Of course.  But as the article concludes, “firms concerned about the security issues of shadow IT are missing the point; the bigger risk is not embracing it in the first place.”

The article is titled “Let Staff Go Rogue on Tech.”  It was written by Christopher Mims and is available on the website of the Wall Street Journal.

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Risk-Taking is the Answer

ASU v2, cropped v2In a recent interview, Michael Crow identified risk-taking as vital. Who is Michael Crow? He has been the president of Arizona State University for twelve years. During his tenure enrollment has increased 38%, research spending has tripled and tuition has been kept in check. What’s his secret in a setting in which many universities are struggling? Crows says that educators andASU_logo_0 large academic institutions need to be more entrepreneurial and take more risks. He goes on to state that higher education is too risk-averse and needs to be more innovative.

Isn’t it refreshing to hear someone from a world that can be bound by tradition and excessively focused on the past talk about the need to move forward boldly?

The interview of Crow is titled “Design for a New College.”  It was conducted by Douglas Belkin and is available on the website of the Wall Street Journal.

Embracing Risk

Risk, croppedOur relationship with risk has a profound impact on the quality and character of our lives. If we are significantly risk averse, we will miss opportuteeter-totternities. If we are significantly risk inclined, we may find ourselves regularly facing unproductive turmoil. Most of us would benefit by taking a few more risks as long as we do it in an intelligent and thoughtful way. This sort of stretching beyond our comfort zones will often have significant and positive results. Some of us would do well to either take fewer risks or take them in a more methodical way.

Risk Fascinates

tight_rope_walkerOne of the defining characteristics of risk is that if fascinates us.  In part because it is powerful and in part because it can be frightening.  It attracts us and repels us at the same time.

A new novel by Christopher Reich called “The Prince of Risk” was just released.  It is selling well.  No doubt the title and the topic bPrince-of-Risk-Official copyoth draw readers.  The lead character is described and a “fearless New York hedge fund gunslinger.”  Whether you are driven by a desire to see the fellow take massive risks successfully or to suffer from his hubris matters not.  The fact is that risk fascinates us for a multitude of reasons.

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