The Key To Risk: It's All About Emotion, published on Forbes.com on February 23, examines the noneconomic factors that contribute to success or failure of organizations in times of stress or hardship. Health care leaders take notice! The author, Kevin Kelly, focuses on the often counterintuitive, culturally influenced decisions made by senior leaders and key staff under harsh environmental conditions which may have long lasting impact on companies and people. "We like to think we assess [risk] rationally, but we too often forget that we are emotional creatures first and foremost."
Risk Relativism
Using examples such as that of Lehman Brothers (where investment conservatism was punished and risk-taking rewarded even as the company sank in December, 2008) and the Asian Disease problem that won the Nobel for Tversky and Kahneman (for elucidating the fact that the "framing" of a risk question trumps quantitative risk assessment) Kelly drives home what clinicians who regularly obtain "informed consent" from patients know to be true. The environment and circumstances contribute disproportionately to risk assessment and decision making. Depending on the culture, personal or corporate circumstances, or unrelated pressures of the moment, serious long range decisions may be made in relative isolation from their true merits. What seems to be riskiest is relative. This is a dangerous situation in the current economy.
Risks and Decisions in Health Care
My 23 year old daughter blithely signed off on the anesthesia risks (including such serious risk as death and brain injury) prior to her elective orthopedic surgery yesterday because she was "anxious to get it over with." I can't tell you how many times I've encountered health care executives in my consulting practice ignore the risks of physician dissatisfaction and move ahead with controversial strategies without getting physician buy-in. Often because of their cultural bent - "we know best"; "physicians are only self interested and will obstruct. It's too risky to involve them." And how many innovative projects have I seen die on the shelf because health care clients were more comfortable "playing it safe" and not investing in bold initiatives despite market and financial data that supported them? Despite compelling data to the contrary, organizational culture - or the CFO's philosophy - simply dictated "too much risk."
Risks for Health Care Leaders Today
We face uncertain and risky economic times. And yet medicine, science, and technology march on. Is risk aversion the best default leadership path in this environment? How will we know if risk avoidance actually represents a critical lost opportunity to make important and potentially high return investments? Or if it is culture or evidence that tilts the scale?
President Obama, in his first joint Congressional address last night, made a stunning case for boldness rather than equivocation or moderation in the face of serious economic and structural crisis. In fact he made a cultural and emotional case for it. Will the economics turn out to be right? Will our culture or our intellect predominate as we evaluate risk taking in our organizations?
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