We often “take” risks to better ourselves. For example, you might take a risk and go on a hike with a group of people you don’t know. For those that are not outgoing we pride ourselves on taking this risk.
From a risk management perspective, risk is a function of the likelihood an event will occur and the impact if it does. It’s sometimes expressed in pseudo-math like this:
Risk = Likelihood * Impact
In this example, the most important event could be that we won’t like this new group of people and won’t enjoy the hike. I generally think people are good, especially hikers, so I think the likelihood is low that I won’t fit in. And if I don’t have a good time, the impact is that I’ll have missed the chance to do something more fun. To me, that’s a pretty low impact. Using our risk calculation we get a low risk.
Low risk = Low likelihood * low impact
My daughters cross a bridge in Mount Rainier National Park. Had they fallen they’d have been wet, but little else.
What if our destination wasn’t a six mile hike on a well-maintained trail, but a 20 mile mountaineering expedition up a glaciated peak like Mount Rainier? Now the event we should assess for risk isn’t that I won’t have a good time, but that I could fall in a crevasse and the team won’t be able to help me get out. The likelihood in this scenario is medium because the climbing routes on Mount Rainier traverse several glaciers and crevasse rescue is complicated. The average hiker won’t know how to effect a rescue. The impact is high because if they can’t get me out we’ll need to call for help and while we wait I’ll be getting colder and colder.
A medium likelihood and a high impact is a high risk. Why? Risk can be calculated according to a simple table like this:
So what? One risk is low and the other is high. Does that mean I should only hike with people I don’t know and stay off glaciers? Not exactly.
For any risk you have at least four options. You can accept, defer, transfer, or mitigate the risk.
To accept the risk is to recognize that the event could come to pass, but we won’t do anything to prevent it or minimize the impact. A low-risk six mile hike? For most hikers this is a reasonable response.
Deferring is similar to accepting, but we commit to reviewing the risk later. We could defer the risk of the six mile hike and re-evaluate our decision later if it turns out most people aren’t fun to hike with.
Transferring risk is best thought of in terms of insurance. I can get an insurance policy that will pay for me to be rescued and cover my medical bills. This is a good solution if I’m concerned about financial risk. Not so good if I’m more concerned about my health than the cost of a rescue.
Finally, I can mitigate. Mitigation is the act of attempting to reduce the likelihood or impact of an event. I could reduce the likelihood I’m adventuring with an inexperienced party by checking the backgrounds of the other members. I could require a certified guide accompany us. I could also reduce the likelihood of a crevasse rescue by traveling only well-established routes when conditions imply strong snow bridges.
However, none of these mitigations will completely eliminate the risk. Glaciers are unpredictable and accidents happen. What’s left is called the “residual risk” and we either need to apply additional mitigations or accept, defer, or transfer the leftover risk.
In the end, I might choose not to accept the residual risk and cancel the trip. Avoidance reduces the likelihood to zero and the risk disappears. Of course, so does the trip across the glaciers.
This may seem like an artificial process that works only on paper. Indeed, it works best when it’s part of the trip planning process and only works on the trail when you’re experienced enough to do the assessment without thinking through each step. After years of practice I’ve found I can subconsciously assess risk while on trail and make the choices that are right for me and my family.
How each of us responds to different kinds of risks depends on our individual risk tolerance. I have a fairly high tolerance for risk in the outdoors when it comes to me, but a very low tolerance when it comes to my kids. At work, I’m extremely risk adverse, though that might be because I work in risk management.
In the end, we must each come to understand the types of risk we will accept and those we won’t. It takes a strong person to stand up to a group and declare that you think the risk is too high for you to accept. The best partners and groups are the ones that will respect thresholds for risk and find solutions that work for everyone.
-John Solty is a husband, father and proud dog owner from Washington state. He shares his outdoor adventures on his site, moosefish.com.