Risk Fingerprints & Gray Rhinos Help Communication & Strategy – CleanTechnica

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We continue to live in world with changing and in many cases increasing risks. Michele Wucker, author of The Gray Rhino and You Are What You Risk, has thought about not only about risk more than most people, but also how different people and organizations perceive risks very differently. I continue my conversation with her in this second half of our discussion on my podcast Redefining Energy — Tech.

Many thanks to CleanTechnica for allowing me to republish this material that I originally recorded under their banner. This is the full, lightly edited transcript.

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Michael Barnard (MB): Hi, welcome back to Redefining Energy — Tech. I’m your host, Michael Barnard. Joining me again today is Michele Wucker, author of best selling book especially in Asia, The Gray Rhino.

So let’s turn it apart. I’m going to try and paraphrase very briefly what I’m hearing you say, and what I remember from the books is the risk fingerprint is an individual’s perceptions of the variance in risks. Risk empathy is understanding that your perception of risk is not necessarily theirs and attempting to understand what their perception of the risk is. So, and I’ll give you some examples. And I was laughing to myself. Would I ever, would I play this card? I’m going to play this card. So here’s me. I’ve ridden motorcycles at over 200. I’ve dropped into black diamond balls at Whistler Blackcomb on snowboards. I’ve windsurfed in snowstorms.

I’ve paraglided the southern cliffs of Bali. I’ve played Texas hold’em in probably half a dozen or a dozen casinos around North America. And I’m also a big part of my career was a risk management professional in major technological transformation projects. So how do you square that risk profile where obviously, I’m an extreme sports junkie and risked myself a lot, but I also brought a very stern and rigorous risk management approach. And I trained people in risk management around technology projects, and I applied methodologies that minimized risk and I avoided fat tail risks and all those types of things, sometimes successfully, sometimes not. But it’s interesting, right? It’s a weird risk. It’s a weird risk fingerprint I’ve got. And so people look at me and say, this guy’s reckless and, no, you bring this out in the book.

You actually talk about extreme sports people and you say, these are people who have trained themselves and have deep knowledge and gained an understanding of their, and increased their skills to the point where they can take those risks with reasonable safety. Like, I didn’t break anything doing any of those sports, for example, came close. But so it’s kind of different, right? And other people, like my good friends of mine, are, like, very risk averse in some ways, but they’ve also got very different other things. They take lots of risks in which I won’t get into because there’s all sorts of interesting subjects. You must have had some fascinating conversations.

Michele Wucker (MW): Guilty.

MB: But, yeah, it’s interesting. Different people have differences in how they perceive exactly the same transaction from a risk perspective. And I’m going to lean into Kahneman a bit here. So you must have read thinking fast and slow at some point. I dont know if you quote him or not, but I’m thinking. So there’s prospect theory, which is the variance between your perception of negative risk and your perception of positive risk, right? Because you get into that and it’s like risk is, oh, risk means also good stuff. I take this risk and there’s an upside. But Kahneman’s prospect theory, which he won a Nobel Prize for, says we are more averse to losing than we are to gaining.

Unless you train yourself out of it, as day traders do, as Texas hold’em poker players do, you can train yourself to have a better perception of those risks. The second thing he says, which is interesting, I think I want to test this with you, is that he articulates it. When people have less or nothing, theyll take massive risks. And I look at the United States, I look at relative wage stagnation for 80% of the populace, degrading life expectancies, degrading social mobility, higher GINI indices, especially in the red states. And I ask a question for you. Do you think that contributes, that people have perceive they have nothing to lose, so they’ll take bigger risks?

MW: Absolutely. And you raised so many great points.

More recent work in prospect theory has shown, like there’s research showing the efficacy of certain training in changing some of those biases. And in a lot of the earlier conversations about that, it was that, okay, here’s how people do this and here’s how people do that. But in reality, there’s a huge variety in how much more loss averse someone might be compared to someone else. And that goes back to the risk fingerprint and the risk profile. So as the risk profile, you might think of the decisions that you’ve made, you know, all those crazy things that you’ve done, the decisions that the Chinese and the American subjects in the experiment I mentioned, you know, those are the choices that they made. So that is like, if you imagine a wine glass at a crime scene, you imagine what’s left on the glass.

That’s the risk profile. That’s the thing that the world sees that identifies you. Your risk fingerprint is all of the factors that went into that imprint being made. And just like a real fingerprint, it includes three elements that explain some of this difference that we’ve been talking about. So the first is your innate personality. So that’s like the worlds and the loops and the arches, the things that are genetically determined that you just can’t change. It’s why a fingerprint is such a great biometric indicator. And you can be calm or anxious in face of risk. You can be impulsive or methodical. There’s a great tool I love called the risk type compass that helps to measure this. You might be more inclined to look at long term risks or short term risks. And so that’s who you are.

So that interacts with the second part of the risk fingerprint, which is your experiences and your environment. So, for example, you are cooking and you cut your finger with a knife. That leaves a scar. It’s an indelible mark, just like on a real fingerprint that would show it, but people respond in very different ways. One person will say, I never want anything more dangerous than a spork ever again. And the other person says, well, I survived that, you know, no big deal. I want to be a sushi chef. You know, so there’s this, you know, interaction and you don’t control all of your experiences. There are lots of things. And, and that also includes what risks you’ve taken that have worked out well. Which ones that not so much, you know, what your, how you were raised.

I mean, I grew up in a family where my mom and dad had very different risk fingerprints. And so that’s probably why I’m so obsessed with it. Now. The third part is really where I spend time, and it’s the training, it’s the environment that you create for yourself, particularly your peer group. It’s the knowledge that you pursue, it’s the self awareness that you have. It’s the mindfulness that you bring to any risk that you might take. And some of this is wild. After I finished the book, there was some research that came out that said a Tylenol can make you more risk seeking or the day of the week, but they’re things like the tempo of the music. If you speed too much, do not play Green Day. That’s not going to work for you. Spicy food.

There are lots of stereotypes around people who like spicy food being risk seekers, and it’s actually true. There’s research that shows that for, I forget what it is, a few hours after you eat spicy food, you’re actually going to be more risk tolerant than otherwise. Temperature. Cooler temperatures.

MB: So this is amusing because that means that all of every day I have a higher risk tolerance because of what I eat. I eat spicy stuff all the time.

MW: Bring that Tabasco bottle with you everywhere. The habanero, even better. So there are all these things that you can control. Do you have around you people who can give you a really informed perspective on whatever thing that you are considering? Do they have the knowledge? Do they have risk fingerprints that are different from yours? If you are the person who leaps before you look, do you have a chatty best friend who can tell you, let’s take three deep breaths before we decide to do this, or vice versa? If you hate jaywalking, me, you know, I mean, I will only do it if the. If the street is really clear. I’m not sure if that’s technically jaywalking, if there’s not a lot of traffic or not.

It’s a while these New Yorkers get tickets when they go to LA, but, you know, there’s some things where you really, you need a wingman or you need someone to help you with it. There are processes, there are habits of. And, you know, it’s like umbrellas are one of my favorite things. You know, if you see the forecast and there are some people who will see 30% of rain, I better bring an umbrella. The other people go, not going to rain. And there are other ones who take their umbrella because they’re superstitious, to make sure it’s not going to rain. And, you know, so, you know. Exactly. Exactly. I have a weather knee that I pay attention to for whether it’s going to rain or. Or nothing, but.

So you can change your environment, you can change your training, you can change your preparation, and that will affect whether you’re making good risk decisions or not. And you can apply this risk fingerprint concept to organizational culture, or even to a nation, society, region. There are different things, but similarly, the innate, the experience, and then the, what you do about it.

MB: And the empathy part is understanding other people’s perceptions so that you can actually start communicating effectively about stuff. Right. And this is.

MW: Breaks down logjams like that you didn’t even know existed.

MB: Yeah, it is interesting because I’ve spent a lot of my career articulating risks. Really? Clearly. Like, Kahneman talks about pre-mortems, and I spent a bunch of time yesterday with Bent Flyvbjerg. By the way, he claims I’m an honorary Dane because I actually pronounced his name close enough.

MW: Good for you. That’s not easy.

MB: It’s not an intuitive name. F l y v b j e r g. Flyvbjerg.

MW: Well done.

MB: It took me a while. And I had to ask one of his, the people in his firm. But I think I got there anyway.

The question there for as you define risks, I want to just briefly go back to black swans versus gray rhinos, because to articulate the way I’m thinking of it right now, which may still be incorrect, despite having read all these books and talked to people and getting direct feedback from you on how I’m thinking about gray rhinos, I think of gray rhinos as a strategic risk and black swans more as a tactical risk. And some of this is influenced by talking, being a projects guy at a global tech project career and talking to Bent Flyvbjerg, who’s a global projects guy. I’m thinking of them in terms of projects. So this may be a warping halo effect from recent thinking.

And so the strategic stuff is what should we be paying attention to? And I think gray rhinos are stuff we should be paying attention to but usually aren’t, whereas black swans are. As we try to deal with that, what things could screw up or deal with, what is the fat tail distribution? Unexpected events which could throw us off? And how do we cut the tail, in Flyvbjerg’s terminology, or pick things with thin tails? You haven’t seen his most recent research, I doubt. Fascinating stuff. Wind, solar farms and transmission, once the shovel hits the ground, they almost always succeed on time, on budget, and deliver benefits to a bunch of locals.

MW: Governments and boondogglers would have trouble with that.

MB: So there are 25 categories of projects in a 16,000 project data set. Nuclear takes up two of the three bottom categories with the Olympics. So there are only five categories which are typically on time, on budget and delivering benefits. And that’s wind, solar and transmission, which is great news from a climate perspective.

MW: Absolutely.

MB: In that context, climate change is the gray rhino we need to be dealing with. What’s the strategy? The long tail, the fat tail distribution risks that can disrupt our actions is the tactical decision making factor, which enables us to choose things with fewer black swans in the mix or to find ways to minimize and degrade, reduce the black swans in those projects. And some of that just compressed the time frame. That’s why I’m thinking of it right now. How do you think about that, as a way of thinking about them?

MW: Differences? One, sure. You know, I, since fat tails are different from black swans, because you can imagine fat tails, anything you can imagine ahead of time is by definition not a black swan. You can only see black swans in the rear view mirror. You can’t see them in front of you. And that’s part of the reason it drives me crazy when people come and ask me, was XYZ a gray rhino? And they want to talk only in the past, and that’s great for case studies, but what I really want people to be doing is looking ahead of them. So that’s one difference. And I think fat tails, perhaps you could say, are combining gray rhino and black swan, even though you are looking ahead, which is not really what black swan is about.

It’s really about recognizing that you could be surprised and you don’t know what those elements are. So how do you build, one, a more resilient organization or approach, and two, how do you create a situation that benefits from volatility? And my sense is, you get a bunch of people thinking about black swans because they can then trade volatility and have an excuse for when things don’t go well. So I think that’s part of it. The other thing is, I think once, you know, once the blacks, one hits, it’s all you’ve got time for is tactical thinking, because you’re dealing with it when it’s right there. And the gray rhino is about looking at how you might respond to something. It’s about understanding your capacity. People really want to focus on spotting them.

And so we’re, you know, in January, how many top risk lists have you seen come out? You can’t count. There are more and more every year. And everyone’s like, I made my list. And then springtime comes and people forget about the list, and that’s it. But they don’t often go to the next stage, which is to think about, okay, how could this affect my company in, say, best case, worst case, and middle most likely scenarios? Okay, how are we equipped to deal with this? And thinking about that, both in short, medium, and long term, and making sure that you allocate enough of your thinking to the medium and long term possibilities. And not just dangers, but opportunities.

One of the opportunities is that if you are paying attention and prepared for one of these great rhino risks, when it decides to snort and trample you are ahead of the other guys. And another one is, how do you solve the problem? I mean, every single VC, what do they want at the top of the pitch deck? What’s the problem you’re solving for? Right. And so if you identify the problem and you have some sort of solution to it, you’re also ahead of other people, because not only are you avoiding the costs of whatever thing happening and you are not being prepared, you’re also actually leaning into it and using its strength for something. And fat tails are somewhere in there. I think they’re a really good scenario tool.

But black swans are for reminding yourself that you dont know what’s in front of you, and gray rhinos are for helping you plan for the things that are in front of you, but you don’t know all the details, you don’t have a precise prediction and actually whose outcome you can change.

MB: Okay, so risk fingerprints, risk empathy. I’ve preloaded you with a couple of scenarios to discuss because I think it’ll be interesting and it gets into why we haven’t dealt effectively with what I still consider the gray rhino of climate change, why we didn’t preemptively deal with it. And so it’s the risk fingerprint and empathy about a bunch of different stakeholder groups related to climate change. And you can pick the timeframe based on our discussion. You might go back to the nineties or the early 2000s or something, but how would you consider the risk fingerprint of the general public related to climate change? What would be the empathy way you would articulate that?

MW: Well, I think people see risks in very different ways, and that depends partly on their situation. Are they living right on top of a lake or a river or in a place like that? That community in Arizona that got its water turned off recently because there wasn’t enough of it. But also the information that you get, you can consider this as the environment. Some of the information that you’re bombarded with, you don’t have a choice about. But you also, in the third part of the risk fingerprint, you do have the option to go and find certain information. So some of the information you get is involuntary and some of it is voluntary. It also depends on how you frame risks and how you see them falling out.

Now, obviously, the fossil fuel industry sees as a big risk that people are not going to keep buying their stuff.

MB: And that’s actually one of the examples. What would be the risk profile for the fossil fuel industry and then what would that imply about how they would perceive it? And bang, that’s exactly it. They perceive the risk very differently than you or I do.

MW: Yeah. So their risk profiles, they go and they bury reports and those are the decisions that most of them have made. And the risk fingerprint is that they, well, first of all, fossil fuels have gotten so many subsidies over the history of fossil fuels and still do considerably more than renewables. Actually, a friend of mine wrote some time ago that if you wanted to make huge progress, just get rid of the fossil fuel subsidies so that clean energy is just on a level playing field.

MB: The G20 and the G7 committed to that in 2009. And China’s actually made progress. Canada made a little progress. The United States has made zero progress as an example of differentiators across it. And partly that’s because they’re really hard to unpack. I’ve spent a lot of time looking at this and oh my God, the lobbyists and the regulators and the company, they just go back and forth on this and they just create little line items and all sorts of different budgets. So just figuring out what’s, and then the risk perceptions stuff, differences of opinion, that’s not a subsidy, that’s economic development.

MW: Yeah, well, you know, it’s fascinating to me. I’ve spent a little bit of time in, you know, middle eastern countries, some of which are very dependent on oil and being very surprised to hear that one of the things that keeps them up at night is the obsolescence of oil. And I’ve been very surprised to see how much attention some of these countries are paying to clean energy and clean technologies. And if you look at the risks differently, I mean, one of the risks of the transition is stranded assets. But there are also some people who say, look, there are times when you’re still going to need some fossil fuels for continuity. I’m like, okay, the opportunity here is a much higher margin product and much lower volume. Like that’s actually, that’s a good deal, right?

And you look at that, at the subsidies and stuff, and you look at incentives, and if I understand that the devil’s in the details, it’s very hard to do. But what if you say, okay, we’re only subsidizing the clean stuff right now, you know, how do you create different incentives? Well, you know, public policy and subsidies is a huge incentive. What’s good tax policy is that you subsidize. Well, you tax things you want less of and you either don’t tax or subsidize, depending on your political persuasion, things that you do want more of. And if you look at tax policy through that lens, through externalities, we would have completely different tax structures. And we also, in my view, could have much lower taxes because we get taxed twice really for the bad things. We’re subsidizing falsehood.

We’re paying for the subsidies, and then we’re paying for the cleanup, the emissions, the health costs, all these other things. Looking at the allocation of resources, it’s a very different thing. I also think about opportunities in the shift to clean energy for fossil fuel companies. They’ve got an awful lot of knowledge and experience in looking at trends and who consumes energy and where and how you’re connected to certain distribution networks and things like that. If there are lots of opportunities there, and if we were to really go through a green cleantech transition for energy, there are so many opportunities for them to be way ahead of everybody else in that. And before this, the worry was peak oil and that the reserves are going to start disappearing and things like that. Let’s say we continue with fossil fuel consumption the way we are.

Well, that’s going to be a problem at some point anyway. So why don’t they switch to something that right now could put them in a better direction? And this is a dynamic we see a lot with a lot of legacy industries. One of my favorite examples is Kodak. They invented the digital camera, but they said, no, that’s going to cannibalize too much of our existing business. And that didn’t end up so well for them. So the risk of relying too much on your existing revenue stream without a plan for switching to something that is the future, thats a risk, too. Trey.

MB: Yeah, it’s interesting because I spent a lot of time on this right now. Major analysts are projecting peak oil demand in the second half of this decade. We hit peak coal in 2013. We’ve had a little blip with the energy crisis in China or in Europe that’s brought it back to those levels. We stopped increasing coal a long time ago and were going to stop increasing oil demand and have it start to diminish in the next decade. Similarly, natural gas is going to peak around the mid thirties, 2030s. You look at that and say, well, how is that going to change? High cost, poor quality suppliers like Alberta next door to me in Canada with the oil sands, they’re going to be impacted first, but everybody’s going to be impacted.

And to your point, let’s take, I look at the lens how fossil, major fossil fuel companies are dealing with this transition. I look at Orsted.

It used to be DONG energy, which is, I think Orsted is a much better name. But DONG Energy made the decision and renamed themselves because they went from being a major fossil fuel company. Now they don’t do that. They divested that. They’re an offshore wind developer. They’ve transitioned to modern energy and leveraged their offshore capabilities and knowledge, the skills they developed as an oil and gas firm to do offshore wind. There are parallel things. Similarly I make a repeated, mostly falling on deaf ears case for transitioning coal workers to build pumped hydro because pumped hydro geography is usually coal geography. They’re there. They know how to burrow tunnels through rock. It’s energy, it’s got a lot of psychological benefits as well as social benefits. But yeah, it’s interesting as we look through that, how they did it.

And to be clear, one of the things about the fossil fuel companies, you mentioned this. They looked at it and they made a decision to lean into our psychological traits, to ignore gray rhinos by spreading disinformation, doubt and diverting us into other things. Yeah, this is the interesting question for me because gray rhino, you make a clear point throughout the book that we keep ignoring them, like our weight, like drinking too much, like smoking, stuff we know is going to have long term implications. So maybe just spend a little bit of time characterizing the kind of things where other people or other organizations are forcing or pushing us away from paying attention to them, what we can do about that.

MW: Yeah, well, Merchants of Doubt is such a great book about this sort of manufactured denial. They’re really leaning into people’s tendency to deny things. And it’s often hard to convince people. It often takes really an outside event. You’re not thinking about COVID actually, how that really changed so many people’s priorities. And there are all these stories about, oh, you know, people are taking bigger risks, quitting their jobs. And I don’t see it that way at all. I’m seeing that they have changed the way they think about risks in that, you know, they see it as a bigger risk, you know, working for the man, working for a company where I, their boss, might change and everything changes, and they’re not happy there anymore. Think about the opportunities of changing jobs.

And this particularly for women, I hear that if people stay too long in the same job, they are missing chances to get a salary bump and things like that. And Covid’s really changed people’s priorities. I saw people adopt dogs and cats. And, I mean, for me it’s also changed. I mean, before the pandemic, I made my living flying around the world like horrible carbon emissions, even when you offset them. And it’s the time sitting in the plane, the time prepping, and the time rehearsing. And I’ve actually been putting my efforts towards setting up a lot more local activities and keeping my feet on the ground. And it’s not just the health part of the pandemic, but it’s like, what do I really want to do? Where am I doing things best?

So often the best motivating factors are ones that sometimes we don’t think of enough. But guidelines can also help. We talked about the taxes and subsidies. You look at a lot of people who are now thinking about getting heat pumps or about switching to electric vehicles. You look at some of the towns that have made public transportation free. So I think that there are nudges or shoves that governments can do to get people to do things. And companies do things all the time to influence people’s behavior. Here’s a coupon. Get your first three orders free. Get this, get that. So they do use that sort of psychology, but for purchasing particular things.

And I saw something somewhere, on Mastodon or something a week or two ago that drove me nuts. Somebody was posting that it made their blood boil that all of these companies had done these personal carbon footprint campaigns to take the responsibility off of themselves and put it onto the individuals. And they were so mad about that. Okay, first of all, companies can’t sell those kind of products. They can’t sell cleaner products to people unless people want them. And is it a bad thing that people are taking more personal responsibility? I don’t think so. And by getting yourself all worked up over this, you’re basically giving yourself a really good excuse to not take responsibility yourself. So it drives me absolutely nuts. Okay. Whatever their motives, I think it’s a good thing that companies were promoting this because it is creating demand for things that there might not be demand for.

And I just go crazy when I see these articles about oh well, reducing meat in your diet isn’t going to make a big difference because blah, blah, blah. Again, the message is you have no impact, you have no agency, you have no responsibility. When that’s not the case. I mean we can’t afford to have individuals or businesses or governments slacking on climate change. And this message of someone else’s responsibility is very dangerous no matter who is talking about it. We need to be talking about shared responsibility for the climate crisis. And also, you know, when you’re sharing responsibility, that actually gives you a, you know, a safety net, sort of a peer group, the sense that you’re part of something, there’s a belonging that helps to accelerate things.

So, you know, there’s some things that, there are a lot of things that companies can do that do encourage people to make decisions differently. And even investors pressing companies to be more sustainable or companies pressing their suppliers to meet certain standards, forcing people to.

MB: Do smaller packages with less air.

MW: Yeah, I would be so for that.

MB: Walmart, as the biggest purchaser in the world, shrunk the carbon footprint of a whole bunch of their stuff tremendously, as an intentional choice.

I want to touch on something because there’s an interesting question here. I took far too long to actually listen to the actual book, The Seven Habits of Highly Successful People. I read the blurbs like 30 years ago, but I didn’t read the book. So I was actually going down to Vermont to assist a renewable energy and storage developer with their annual strategy offsite and project forward into the future where the big hitters would be, help them understand what things they know, where they could exploit today’s hype for hydrogen for example, versus other stuff.

And I was listening to The Seven Habits of Highly Successful People. And the thing that struck me out of what you were just saying was — he potentially misattributed it — but he says there is a gap between the stimulus and your response, and all you control is what you choose to do in that gap and how you respond. And so the articulation, to paraphrase what you’re saying, I mean, I’m personally on the side of the companies are intelligently dealing with the risk by downloading responsibility to consumers. And it annoys me. That’s true. But the secondary part is you’re articulating we can choose what to do about that. And so I think that particular habit, choosing what to do in that gap and their response is where you’re leaning into.

MW: Absolutely. And you bring up a really important point which is touched on briefly, and you are what you risk. But that I’m hoping to do a lot more work on, which is the distribution of the risk of the benefits and the burdens. I mean, Mariana Mazzucato, whose work I just adore, does a lot about this. She’s like, here’s these governments making these moonshot investments and companies get all the profit and the taxpayers are paid with it. Or you see the stories and I in the news right now about pharmaceuticals wanting to charge a lot of money for Covid vaccines when it costs $2, $3 to make them. And they were able to do that because the government poured tons of money into that. And you look at all kinds of things or say jobs, that’s one of the biggest areas.

There’s a huge, large and very growing part of the workforce that’s solopreneurs, it’s gig economy people. And there’s a raging debate over whether they should be employees or contractors, blah, blah. And to me, that whole debate completely misses the point because one of the solutions being promoted. Okay, you have to consider this person as an employee, and I don’t want to be an employee because companies demand certain things of their employees that are often not right, whether it’s intellectual property or what relationships you could have or non competent agreements or whatever. I think that there should be a third way where people who are independent can get a much better risk umbrella for themselves.

Health insurance, life insurance, the kinds of protections that they need, you know, stronger unemployment insurance and you know, with unemployment insurance too, they say, okay, you, we’re only going to pay you if you are applying for regular jobs. Well, what if you don’t want a regular job? What are you do if you’re doing a startup? And so I think that the whole system where companies are the ones who often provide healthcare and other parts of this risk umbrella doesn’t work. I was just reading a story about Twitter and talking about it. There was a quote about how many of the people who were staying were just staying because they needed health insurance. And it’s not good for companies either. Do you want the employee who’s just staying for health insurance or do you want the one who’s there because they like it?

I think Twitter wants anyone who will stay for whatever reason at this point. But I think we need a much bigger conversation really about how we provide the risk umbrella that individuals need. And I think if we do that, it could be a lot more productive for companies and for workers. If you are an employee, you change jobs, you change health insurance, you have to check if all your doctors are in the plan or not. There’s a three month waiting period or whatever. And it’s completely inefficient and not fun for anyone. It’s not fun for the doctors, it’s not fun for the patients and not fun for the employers. And so that question about who carries the risk and who benefits from it, you’ve seen this expression, was it privatizing the profits and socializing the risk? A heck of a lot of that.

And that speaks directly to externalities from fossil fuels. It’s a big, big example of people making profits from the risk that they’re dumping on other people and that other people are paying for.

MB: Well, yeah, it’s interesting just to lean into that a little bit in the last couple of minutes because we’ve only got like four minutes up and I want to respect your time. I deal with the availability bias back to cognitive science and Kahneman and all those articulations are very much top of mind for people in the United States, but very much not top of mind for people in most of the rest of the developed world, the balance of risk for the individual is quite radically different. And I looked at universal basic income, which was actually part of the democratic nomination policy discussions. I’d like to say that there are these really great broad policy debates between right and left, between different economic perspectives that occurred in the run up to the 2020 election. And there were the democratic primaries.

You had Andrew Yang promoting universal basic income, and you had other people who were just in very different places. Bernie Sanders was over here. And, of course, now I’m reading Noam Chomsky. And that’s just, I just finished two books by Noam Chomsky, and it’s like, oh, my God. Anyway, that difference of availability bias, those articulations you made are very specific to the country and the jurisdiction. And there’s very different things. And, yeah, the United States is an outlier in the developed world in a lot of those things. But that said, I always like to leave an open ended opportunity at the end of these discussions. We’ve had a broad ranging discussion. We’ve talked, a lot of thinkers, talked about your thinking, Nassim Taleb’s thinking, talked about differences in how humans behave at different times and their agency in learning how to behave better around, especially around gray rhinos. But you have a big audience. What will you say?

MW: Such a great question. You know, I think it’s really about awareness that we make 35,000 give or take choices every single day. Every single one of those choices is a risk. Every single risk is a choice, the way annual top risk lists are framed notwithstanding. But people don’t think about what’s going into those decisions and why they’re making them and how the whole environment around them affects that. I think it’s so important for policymakers to think about what are the things that they could do to encourage more smart risk taking, starting businesses, investing in education, things like that, and discourage bad risk taking, the moral hazard, the speculation, the safety violations, things like that. So how does that policy framework act? And for people in democracies.

But to be honest, also in more authoritarian countries, where there is often more of a feedback loop between government and people than people in the western world want to admit, but how does the environment around you shape your individual choices? And how do you communicate to the people making decisions that, you know, maybe there’s a better way to, you know, to do it. And then in your personal choices, how do those affect the people around you? Why are your decisions different from other people? You know, one of the questions I get a lot of laughs at is how much time do you leave to go to the airport? Now you’ve got a business colleague and you know, you’re for expense reports. You’ve got to take that cab to the airport together and they’ve got a completely different idea.

If you can talk about why you have those different ideas, you can come to some sort of agreement much more easily than otherwise. And in any sort of relationship, once you start talking about why something’s important, what you see the risk as, it’s much easier to come together. So I guess I really say a consciousness of the reasons why you’re taking risks of what those choices say to other people in the world about you and how you might better optimize your environment so that you can make better choices based on your past experiences and your innate personality.

MB: Thank you so much. I’m your host, Michael Barnard, and my guest today has been Michele Wucker. She is the international bestselling author of the Gray Rhino and her new book is we are what we risk, which is a more personal perspective and leans into individual agency about understanding how we behave with risk. Michele, thank you so much for your time today. It’s been a fascinating conversation.

MW: Likewise, such great questions and such great material. So I hope your listeners enjoy it as much as I have.