Wisdom from unusual sources
OVER THE YEARS I have experienced considerable indigestion whenever I have heard that out-dated saw, “don’t risk a lot for a little,” offered once in an academic text and repeated ad nauseam. Taking risk is indeed the spice of life, witness those who climb, who sail single-handed around the world, even those who gamble. Therefore I found great pleasure in finding two writers who seem to agree with me, writers whose words popped up most unexpectedly.
Inter-Island News paper for the residents of Maine’s many islands. They are a hardy, independent, and outspoken lot. Recently the federal government prohibited the transportation of propane on passenger ferries. It happens Maine’s islanders depend on their ferry service not only to get back and forth to the mainland but for supplies as well. Many residents depend on propane to heat their homes, cook their food and generate their electricity. Barring propane from ferry service would increase costs dramatically. Cynthia Bourgeault of Swan’s Island questioned the whole approach in “Risk: How much is too much?” She argued that ”in recent decades American society’s safety-consciousness has passed well beyond the threshold of paranoia. It would almost seem that insurance companies now occupy the role formerly served by religion: to offer, in a fragile and uncertain world, some guarantee of safety.” While I would hardly give insurers so much credit, I agree with her analysis of our current compulsion to create a risk-free society. She suggested that her island heritage could offer an alternative: “island character: strength, pride, a tested trust in one’s own instincts, reliance on others, and hence a proper respect for one’s own contingency as a human being.” She
is a monthly concluded with some words of wisdom: “To take stupid risk is . . . well, stupid. To take no risk is fatal. Where do we draw the line?”
Equally unexpected was a similar thought that I heard in Vienna in June, at the annual meeting of The Geneva Association. The chief executive of the nation’s largest life insurer, Prudential’s Robert Winter, stated clearly that “undue aversion to risk can be the riskiest behavior of all.” His comment is ironic in light of recent disclosures about one of Prudential’s subsidiaries, but the thought is no less profound or important.
To take stupid risk is . . . well, stupid. To take no
risk is fatal.
We are creatures of excessive caution much of the time. I am reminded of middle managers so frightened by the possibility that an unusual loss might occur and “not be insured” that they end up wasting both their time and financial resources buying what is in reality nonessential insurance, and actually assuring their eventual obsolescence.
The words of Bourgeault and Winter should be the new standards for risk management professionals. Reference: Mbuya, C. J. (2008). The A to Z of risk management definitions, concepts and strategies. MP Publishing, Pretoria. Article written by Dr John C Mbuya, Director: Management and Leadership at Milpark Business School – www.milpark.co.za, 011 718-4000.
Dr John Mbuya