What risk type are you? | AccountingWEB

What risk type are you?

Understanding risk types provides leaders and managers with insights into how and why decisions are taken, says Geoff Trickey.

Little attention is paid to the human nature of risk and the affect it can have on an organisation, boardroom or team, yet while surface attitudes towards risk flex and change, an individual’s underlying personality remains consistent and when we are under pressure, we revert to type.

According to a survey by Labour Force, 274,000 people heading to work this morning will suffer some form of physical injury while carrying out their duties – that’s more than enough to give risk a seriously bad reputation. Yet no enterprise would get far without it. This is self evident in the case of investment, soldiering or working in the emergency services or any other dangerous job.

"For leaders and managers knowledge of risk type provides insight into how and why decisions are taken."

Less obviously, leadership, creativity, entrepreneurialism and acts of heroism all depend critically on people exposing themselves to risk and the possibility of failure, humiliation or harm as well, of course, of glorious success.

Whether you are fearlessly adventurous or anxious and cautious is determined by your temperament and it is deeply rooted. Personality research can be complex and research into risk even more so. However, current knowledge has been distilled into eight risk types; types that each have a persistent bias towards very different perceptions, expectations, actions and decisions.

This kind of analysis has the potential to make the human risk landscape visible; to provide a vocabulary that facilitates planning, research and discussion about human factor risk. These are important steps in getting to grips with a critically important area of difference between individuals and for leaders and managers knowledge of risk type provides insight into how and why decisions are taken.

The challenge for leaders and managers must be to deploy risk types appropriately, to achieve the appropriate balance of risk types within any group, at the level of the boardroom, team, the department or the organisation as a whole. This has been difficult to achieve because the human risk landscape has been virtually invisible.

Looking across the crowded rush hour train carriage, in terms of individual differences, there is certainly plenty to take in. But there is zero information about anyone’s disposition towards risk. Some of your fellow travellers will undoubtedly be crazy hot-heads; up for any kind of wacky adventure, while others will be so risk averse that they are permanently anxious and will worry and fret themselves through another working day.

These extremes, and the spectrum of fearlessness or anxiety in between, define fundamental differences in temperament that managers need to recognise and harness. Risk takers are as important to organisational success as are those who are prudent and cautious, but it’s of crucial importance to ensure that the right people are in the right role.


Risk types


Uninhibited and excitable, this risk type enjoys the spontaneity of unplanned decisions. They are attracted to risk like moths to a flame, but are distraught when things go wrong. Their passion and imprudence make them exciting but unpredictable.


The intense type tends to be highly strung, pessimistic and nervous about any threat to their equilibrium. In extreme examples, personal relationships and decision-making can become an emotional minefield. Passionate and self-critical by nature, they react strongly to disappointment, taking it personally when things don’t work out.


Self-disciplined and cautious of risk, the wary type is organised but unadventurous and puts security at the top of the agenda. They will be drawn to the idea of securing their future but anxious that however well something worked for others, in their case it will go wrong.


Very self-controlled and detailed in their planning, the prudent type is organised, systematic, conservative and conforming. Conventional in their approach, they prefer continuity to variety and are most comfortable sticking to what they know.


Self-confident, systematic and compliant, the deliberate type tends to be unusually calm and optimistic. They experience little anxiety and tackle risk and uncertainty in a business-like and unemotional way. They never walk into anything unprepared.


The composed type is cool headed, calm and optimistic, but at the extreme may seem almost oblivious to risk and unaware of its effect on others. They take everything confidently in their stride, seem quite imperturbable and manage stress well.


The adventurous type is both impulsive and fearless. At the extreme, they combine a deeply constitutional calmness with high impulsivity and a willingness to challenge tradition and convention. Intrepid and never discouraged, they quickly rebound from any setback.


Spontaneous and unconventional, the carefree type is daring, excitement seeking and sometimes reckless. Not good at detail or careful preparation, they often seem unclear about their objectives. Their impatience and imprudence can lead to hasty and unwise decisions.


Individuals who show none of the extremes that characterise other risk types are classified as typical. Because they score close to the centre they will not naturally be exceptionally prudent or unusually reckless, neither will they be particularly emotional or extremely calm. Any pronounced risk-taking behaviours will likely be due to attitudes developed from specific experiences.

Discover your risk type for free go to www.psy-key.com, use the access code TrainingZone and complete the Risk-Type Compass 10 minute questionnaire. Your seven-page report drops into your inbox immediately.


Geoff Trickey, managing director of the Psychological Consultancy.

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