The key to effective risk management is understanding your staff’s risk types and how they will react to unexpected events or outcomes. The Risk Type Compass focuses on differences in the way individuals perceive, react to, and manage risk, as well as how they make decisions. Approximately 88% of people can be categorised according to eight ways of approaching risks, the display of which is influenced in part by the individual’s experiences and circumstances, thus determining their risk tolerance. The Risk Type Compass can be used by practitioners to effectively assess risk tolerance in organisations across industry sectors to predict how employees may perceive, react to, and manage risk-orientated situations. Together with other sources of information, results from the Risk Type Compass can be used when making selection or development decisions, for team buildings to effectively manage risks, and for surveying organisational risk culture.
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