Thursday, April 28, 2016

Acknowledgement

By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.
I am fortunate enough to live on a very quiet street.  The traffic on my street as well as the connecting streets is quite minimal.  At certain times of the day, the “traffic” of deer might outnumber the traffic of cars (well, at least before 6 am).  Therefore it was relatively unusual the other day when there happened to be two cars on the road at the same time.  I was following a pickup truck down my street.  A virtual traffic jam by our usual standards.
At the corner the truck driven by my neighbor realized he needed to turn around and go home.  Not thinking to look around to see if there was anyone else on the street he pulled a U turn in the middle of the intersection just as I was starting to pull out behind him.  We both noticed in time and avoided a collision, but he quickly signaled with an embarrassed looking mea culpa wave that he was in the wrong. 
We all make little and mostly harmless errors in judgment.  It is part of human nature to not always be vigilant about our risk shortcuts.  Risk management is not going to change this about human nature – hard as it might try.  As this is the case, the best that risk management can do is to create a culture where at a minimum that one acknowledges their risk slips. 
My neighbor made a risk slip, but the culture of our quiet neighbourhood required that he acknowledge the mistake.  No harm, no foul, and no one got into a road rage fiasco.  A simple acknowledgment of a mistake solved the issue.  I suspect that next time he will be more careful before assuming he is the only one driving on our street and the problem becomes naturally solved.

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