3 Reasons We Underestimate Risk

If someone said we should wear masks a few months ago, we would have laughed. This is "Risk Blindness" - and it affects our decision making. Why do we have it? Here is what HBR says on this Firstly, Reward obscures risk. When things are good, complacency sets in, and risks are conveniently ignored. Ask Yourself - What is my winning preventing me from seeing? Secondly, Sunk costs! What worked well once, but does not today is still kept around. We need to regularly review areas for future-readiness. Finally, "future aversion". Because the future is unknown, we cannot test for it - so why bother. To address this, sometimes we have to act without data or precedence. I see risk blindness every day during my Data Privacy conversations. Companies have websites with some privacy text and an email, but hardly any processes to support it. Managers who think they don't need to do much as they have not received any Data privacy requests so far. How will these half-baked efforts keep us compliant? A single CCPA or GDPR fine can be costlier than a Data Privacy implementation effort! And fines bring bad press and loss of Customer Trust. After all, a call to wear masks is taken seriously today. What are you doing that is Risk Blind?