Are You Stuck in The Risk Paralysis Trap™?

July 2018 Feature Article

By Diana Del Bel Belluz, M.A.Sc., P.Eng.

Welcome to the first issue of my new publication, The Mobilize for Growth™ Advisory.

What is the Risk Paralysis Trap™?

Based on my experience working with hundreds of business leaders over the past 28 years, I've learned that executives and their teams do not achieve their full potential when they see risk primarily as a problem to be eliminated.

July 2018 Advisory

This distorted perception makes them overly risk averse and they become paralyzed and unable to fully utilize their people and resources.  As a result, they miss out on important growth opportunities, they waste time and money, they suffer unnecessary stress and worry, and they fail to achieve their objectives.  We call this The Risk Paralysis Trap™. 

How to spot The Risk Paralysis Trap

Amber Light ImageI often use the analogy of the "amber light decision" to explain how we make a calculated risk decision. If you approach a traffic light and it is either red or green, your decision on how to proceed is a no-brainer.  But, when you approach an amber light, you have a judgment call to make on whether you will opt to stop or proceed through the intersection. You must make a calculation of whether the potential risks and opportunities of stepping on the brake outweigh the risks and opportunities of stepping on the accelerator. Business decisions that have an element of risk are like the amber light decision because they involve:

  • DISCRETION:  There are multiple decision options/potential courses of action, e.g., coast, brake or accelerate at an amber light.
  • UNCERTAINTY:  The exact outcome(s) of each decision option cannot be known in advance, but can be estimated/forecasted.  (None of us can predict the future!). For example, if at an amber light, we opt to brake, will the driver behind us rear-end us?  Or if we choose to coast or accelerate, will we be broadsided by a car travelling in the perpendicular direction? We need to calculate the odds, i.e., quantify the uncertainty.
  • TRADEOFFS: Each option has a different mix of potential upsides (gains) and downsides (losses), you need to choose the 'best' one.  For example, if you are late for an important appointment, you may opt to accelerate. If instead you have your teenager who is learning to drive is in the car, you may opt to brake in order to give them an example of cautious driving.

We make decisions involving risk everyday as we pursue our objectives.  If a decision has the above three characterisitcs, it's better to manage risk more as an opportunity than a problem.

How to overcome The Risk Paralysis Trap™.

To avoid The Risk Paralysis Trap™ leaders need to manage risk primarily as an opportunity.  This means mastering the handling of three essential elements of decision-making under uncertainty, i.e.:

  1. getting clarity about decision outcomes and both the pros and cons (i.e., opportunities and risks) associated with each decision option,
  2. gathering objective information to make a well-informed decision that minimizes bias in your assessment of the uncertainties,
  3. consistently applying the company's guiding values to decisions.  This requires having an understanding of your firm's appetite for growth and tolerance for risk.

Figure 1 shows how the above essential capabilities form The Mobilize for Growth Model™.

When you learn to see risk primarily as an opportunity, the tendency to risk aversion is tempered and you can more fully mobilize your people and resources.  As result, you will optimize your time and money.  You will feel more confident and empowered.  And you will be in a stronger position to achieve your objectives.

Figure 1:  The Mobilize for Growth Model™

July 23 Advisory Figure 1

In future Advisory issues we'll share strategies you can use to avoid The Risk Paralysis Trap™ by enhancing your company's practices for decision-making under uncertainty.

In the meantime, check out the Risk Management and Quantification Virtual Learning Lab (described in the "Upcoming Events" section below) offered by NavIncerta.   It covers techniques that have evolved from applications in companies like Shell and Maersk to provide more robust Objective Information (element #2 in The Mobilize for Growth Model™) to investment decisions. 

 The Risk Wise bottom line...

Viewing risk primarily as 'a problem to be eliminated' leads to an overly risk averse mindset that paralyzes people and causes organizations to underperform.

To avoid The Risk Paralysis Trap™, you need to get better at managing risk as an opportunity.  This will enable you to fully mobilize your people for growth.

To explore how you can improve the quality of your organization's decision-making under certainty, contact Diana Del Bel Belluz at This email address is being protected from spambots. You need JavaScript enabled to view it.  or (416) 214-7598.

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*For details on these and other events and offers, visit: https://www.riskwise.ca/events.html

About us

Dianas HeadshotDiana Del Bel Belluz, M.A.Sc., P.Eng., is the creator of The Mobilize For Growth Program™. Diana’s thought leadership has earned her an international following as a speaker and author on a wide range of business topics that support business leaders to improve their organization’s performance and resilience. 

At Risk Wise, we work with successful business leaders who have a growth mindset and want to improve their organization’s performance. We offer two ways to work with us: basic and advanced.  For the basic, we can provide you with risk management consulting.  Of course, you can get the basic from many other consultants.  However, the advanced program we created—The Mobilize For Growth Program™—takes everything to a much higher level and is only available from us.

Diana created The Mobilize For Growth Program™ based on her experience working with hundreds of business leaders over the past 25+ years. The program helps executives to achieve their company’s growth objectives by fully mobilizing their people and resources. It also helps them avoid The Risk Paralysis Trap™

If you want to mobilize your company for growth, we offer a free starter session. During this session, we help you assess your current situation (how you perceive and manage risk to your strategic objectives) and begin to develop your strategies for growth. We then decide together if you should join The Mobilize For Growth Program™.

To learn more about Risk Wiseplease contact Diana directly at: This email address is being protected from spambots. You need JavaScript enabled to view it.

Current Special Offers for Subscribers

Current Special Offers for Subscribers

The codes to access the following special offers have been emailed to The Mobilize for Growth™ Advisory subscribers:

  • SPECIAL OFFER: $100 off for The Mobilize for Growth™ Advisory subscribers on the full fee on The Conference Board of Canada's Strategic Foresight Training Workshop (August 28, 2018) or Strategic Foresight Scanning Workshop held (August 29, 2018) to be presented in Ottawa, ON.  (Subscribers have been sent the instructions on how to access this offer).  Not yet a subscriber?  Don't miss out, click here to sign-up for your complimentary Advisory subscription.
  • SPECIAL OFFER: $500 off for The Mobilize for Growth™ Advisory subscribers on the full program fee Masters Certificate in Risk Management and Business Performance presented by the Schulich School of Business.  The next module to be held on September 17-20, 2018 in Toronto, ON. (Subscribers have been sent the instructions on how to access this offer).  Not yet a subscriber?  Don't miss out, click here to sign-up for your complimentary Advisory subscription.

  • SPECIAL OFFER: $200 off for The Mobilize for Growth™ Advisory subscribers on NavIncerta's Risk Management and Quantification Learning (October 1 - December 10, 2018).  Learn methods for quantifying non-technical risks.  This Virtual Learning Lab consists of pre-programmed live virtual expert lectures, online self-study materials (split up in blocks) and optional class check-ins.  This is a unique opportunity to learn tools pioneered at Shell and evolved to be applicable to any company that makes business decisions under uncertainty. (Subscribers have been sent the instructions on how to access this offer).  Not yet a subscriber?  Don't miss out, click here to sign-up for your complimentary Advisory subscription.

Not yet a subscriber, but want to access these special offers?

When you subscribe to the Advisory, we'll send you the code for all current special offers along with a link to your New Subscriber Bonus, a copy of Moving Beyond the Risk Map to Operational Vigilance.

FIND OUT FOR YOURSELF why risk management leaders subscribe, click to access the ARTICLE INDEX of all past issues of the Risk Management Made Simple Advisory.

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Diana's Pick

The Neuroscience of Enterprise Risk Management (written by Diana Del Bel Belluz of Risk Wise) expores findings from the field of neuroscience and shares practical tips on how to apply them to enhance individuals' risk management thinking and implement brain-friendly ERM practices in organizations.

The article was published by The Conference Board of Canada in the Autumn 2017 issue of the journal Risk Watch.