Risk Type Assessment
Risk is inherent in life and business. We often manage risk in our personal lives without much thought, from our alarm clocks, to seat belts, to reminders on our cell phones. In business the risks and opportunities are more complex. To thrive organizations must learn to identify the right risks and be willing to accept more risk in order to realize greater rewards, particularly for those who want to grow to $1 billion or more in annual revenue.
One of the greatest challenges in business is being able to identify and act on the right risks. Because of social norms, it can be difficult to ascertain a persons true propensity for risk. Having a highly risk averse person can be just as harmful to the business as a person who is an extreme risk taker. Organizations need to organize teams that strike a balance that enables them to identify and act on the right risk taking opportunities that will ensure its long-term survival.
Our perception of risk influences every decision that we make and pretty much everything we choose to do or not do. The RiskType Compass Model embraces that perspective and looks like this:
The RiskType Compass Assessment evaluates our perception of risk, reaction to risk and our risk taking and how those things combine to influence our our decision making. It uses aspects of our temperament to place us into one of eight risk propensity categories or RiskTypes. The RiskType category indicates how we perceive risk, how much uncertainty we can cope with and how we may react when unexpected results or events occur.
There are many uses for this assessment from individual, leadership and team development, to understanding how executive groups manage organizational risk. It is used across all industries from the C-Suite to the shop floor. Financial Advisers find the assessment to be particularly useful in serving their client investors.
There is no one ‘right’ or ‘best’ type. Every type has its upsides and downsides. The best decisions are made when there is a balanced mix of risk types to ensure that a realistic view of the risks and benefits have been evaluated in the making of an informed decision.