About the Culture of Risk

When analyzing risk with Google Trends it appears that the search for “Risk” declines lightly but the search volume increases at the same time. A first deduction is that the factor risk in our lives is quite stable, and even declining over the last years. It maybe something people get used to. One must take into account that risk is a very broad area.

More surprising was the number one country where the term Risk was used: Singapore.

For those who have been in Singapore know that this is a country or city-state that is organized until the very last end. There is no litter on the streets because the fines are very high.

This means at least that risk and strictly organizing are closely related; companies try to over-organize to reduce the risk of business-failure.

This has obviously a price. And the price is visible in the culture of companies: those that over organize and others where chaos and incidents are seen as opportunities, rather than risks.

Risk and insurance are also closely related. When people are more prone to risk-aversion they tend to insure themselves. A striking difference of two cultures in this sense are Spain and The Netherlands. In the area of car insurance, the Dutch follow a solid All-risk-culture, traffic accidents are fully insured, both for the driver as for third party risks. In Spain there is no such all-risk-culture; cars are most of all insured for third party risk and in exceptional cases rather than the rule in an all-risk-coverage. This is visible in the street; in Spain you cannot pass a single street without noticing cars that are damaged, in the Netherlands that is hardly the case.

Most visible is the culture of risk by these structural constructions: the type of contracts, the form of the organization in companies, the assignment of a special risk officer. But this gives only a type of profile information. How it really works is something that requires a thorough scrutiny: it would be a too high risk to leave some essentials out of the analysis… this means that analysis is also a means to reduce risk in decision making.