Understanding Risk 2020 - how big is your appetite (for making a difficult decision)?

Satarla are a technical partner for the World Bank as part of their Understanding Risk 2020 Forum, which was run virtually between 1st and 3rd December 2020. Dr Sarah Gordon presented a 55-minute workshop, how big is your appetite (for making a difficult decision) on Wednesday 2nd December, at 12pm UK time. The event webpage can be viewed here.

In this session Dr Gordon helped attendees understand “how much risk is too much risk” and how this decision point is key to rapid and robust decision making, especially in times of stress. She explained this is often addressed through regulation as “risk appetite and tolerance”, and clarified what this meant for us as risk practitioners. She then challenged the notion of risk appetite - does it even work, especially when the context in which you are trying to work keeps changing?

Attendees of this session learnt how the most successful organisations proactively and dynamically measure the tipping point beyond which they do not want their risks to go, by citing four case studies, ranging from basic and to complex decision scenarios, from trying to get to the football (soccer) world cup final, to challenging the mantra of "zero tolerance for safety risks", instilling a risk culture in banking following the 2008 global financial crisis and how the changing context from the covid-19 pandemic impacts government decision making. These case studies highlighted how the decisions made in light of an organisations own risk appetite and tolerance are often incredibly difficult, and no answer is the right answer.

The session was interactive with participants, as we built up and tested our own risk appetite and tolerance tool within the session for deciding "when do we return to the office", amid the covid-19 pandemic.

The presentation pack, and risk appetite, tolerance and criteria tool that we used in this workshop are available here. You can use this tool to help your own team make aligned decisions, especially when risks reach their tipping point.

You can view the full recorded session from the conference:

Supporting this information is a 10 minute Satarla training video on risk appetite, tolerance and criteria by Dr Sarah Gordon, below:

This was the second time Satarla were invited to speak at Understanding Risk. In 2018, we led on a session with a workshop, learning from business – risk bow-ties, which you can view here.