How Domain-Specific Attitudes Shape Decisions

In a previous post on Risk Intelligence & Leadership Dynamics, we explored how fundamental Risk Types – deeply rooted personality dispositions – influence how individuals perceive and respond to risk. These stable "Risk DNA" patterns offer profound insights into the human element of strategic decision-making.

However, human risk is a multi-faceted concept. Beyond these stable dispositions, individuals also exhibit Risk Attitudes. Unlike Risk Types, which are relatively consistent over a working life, Risk Attitudes are more transient and domain-specific. They reflect how a person's comfort with risk can vary depending on the specific context – be it financial, social, or even health-related. Think of a meticulous auditor who loves skydiving; their attitude to physical risk differs vastly from their attitude to financial risk.

At Glatt Consulting Group, our use of the Risk Type Compass™ (RTC) allows us to unpack both these dimensions. Understanding these domain-specific Risk Attitudes provides an even more nuanced picture of how individuals and teams approach risk-taking within your credit union.

Risk Attitude

Let's delve into the five key Risk Attitude domains and explore how they might play into risk-taking at work in a credit union environment:

1. Financial Risk Attitude: Investment & Lending Acumen

What it is: This domain concerns an individual's willingness to take chances in financial affairs – gambling with investments, accepting higher-risk loans, or pursuing ventures with uncertain monetary returns.

How it Plays Out at Work (Credit Union Context):

• High Financial Risk Tolerance: An executive with a high financial risk attitude might be drawn to aggressive loan portfolio growth strategies, innovative but unproven investment products, or mergers with financially struggling institutions for potential high returns. While this can drive significant earnings, it requires rigorous oversight to prevent excessive exposure.

• Low Financial Risk Tolerance: A board member with a low financial risk attitude might advocate for highly conservative investment policies, stringent lending criteria, or prioritization of capital preservation over growth. This ensures stability but could lead to missed opportunities for market expansion or new member services.

Impact: This attitude directly influences decisions in lending, investment management, product development, and overall balance sheet strategy. Misalignment here can lead to either stagnation or undue financial exposure.

2. Reputational Risk Attitude: Safeguarding Trust & Integrity

What it is: This domain concerns an individual's readiness to live life according to accepted principles and codes of behavior, specifically the willingness to "overstep established social, cultural, and/or moral rules."

How it Plays Out at Work (Credit Union Context):

• High Reputational Risk Tolerance: A leader with a high reputational risk attitude might be more willing to push the boundaries on marketing claims, adopt aggressive (though legal) operational tactics, or take actions that, while profitable, could be perceived negatively by members or the community. They might focus more on the letter of the law than its spirit.

• Low Reputational Risk Tolerance: An employee with a low reputational risk attitude would be meticulous about upholding the credit union's values, ensuring absolute transparency, and prioritizing ethical conduct over expediency. They would be highly sensitive to any action that could tarnish the credit union's public image or member trust.

Impact: Crucial for areas like compliance, public relations, member service, and corporate social responsibility. A misaligned attitude here can lead to compliance breaches, public backlash, or erosion of member confidence – particularly damaging for a member-owned cooperative.

3. Social Risk Attitude: Communication, Collaboration & Influence

What it is: This domain concerns the risk of embarrassing oneself or others, risking disapproval, unpopularity, or loss of social standing by, for example, voicing controversial opinions or stepping outside social norms.

How it Plays Out at Work (Credit Union Context):

• High Social Risk Tolerance: A team member with a high social risk attitude might be the first to voice unpopular but necessary opinions in a board meeting, challenge the status quo, or take charge in a tense public interaction. They thrive on direct communication and are less concerned about being liked than being effective.

• Low Social Risk Tolerance: A manager with a low social risk attitude might avoid confrontation, be reluctant to deliver difficult feedback, or shy away from public speaking engagements, even if critical for their role. They prioritize harmony and consensus.

Impact: Affects communication dynamics, team cohesion, conflict resolution, innovation (willingness to challenge norms), and leadership presence. In a member-centric organization, the ability to engage confidently, even in difficult conversations, is vital.

4. Health & Safety Risk Attitude: Workplace Vigilance & Well-being

What it is: This domain concerns one's attitude towards common dangers and matters that may impact current or future health, whether at work or in everyday situations.

How it Plays Out at Work (Credit Union Context):

• High Health & Safety Risk Tolerance: While less directly strategic, an individual with a high tolerance here might exhibit a casual attitude towards cybersecurity protocols (e.g., clicking suspicious links, not using strong passwords), or overlook ergonomic guidelines in the office. In a physical branch, they might be lax on security procedures or emergency drills.

• Low Health & Safety Risk Tolerance: This individual would be highly vigilant about all workplace safety protocols, cybersecurity best practices, and employee well-being initiatives. They prioritize a secure and healthy work environment for themselves and their colleagues.

Impact: Directly impacts operational risk, cybersecurity posture, employee well-being programs, and adherence to internal policies. In a financial institution, lax attitudes can lead to security breaches, data loss, or even physical harm.

5. Recreational Risk Attitude: Innovation & Adaptability (Indirect Influence)

What it is: This domain concerns the possibility of physical danger and its influence on decisions about which sports or recreational activities one engages in. While seemingly unrelated to work, a high recreational risk tolerance can sometimes correlate with a general appetite for novelty and excitement.

How it Plays Out at Work (Credit Union Context – Indirectly):

• While not directly applicable to financial decisions, an individual with a high recreational risk attitude might display a greater underlying desire for novelty, excitement, and pushing boundaries in their professional life as well. This could manifest as an eagerness to explore disruptive technologies, embrace radical organizational changes, or champion unconventional new business models.

• Conversely, a low recreational risk attitude might align with a general preference for predictability and routine, influencing a cautious approach to organizational change or innovation.

Impact: Though indirect, it can subtly influence an individual's general openness to change, innovation, and comfort with ambiguity in the workplace, particularly in roles demanding a forward-thinking mindset.

The Full Picture: Integrating Risk Types & Risk Attitudes

Understanding these domain-specific Risk Attitudes, when combined with insights into your team's stable Risk Types, provides an incredibly rich and actionable picture of human risk within your credit union. It allows you to:

• Identify specific areas where training or development might be needed.

• Tailor roles to an individual's natural strengths and preferences.

• Foster more balanced discussions by recognizing underlying biases.

• Ultimately, make more informed strategic decisions that account for both the technical and human dimensions of risk.

Ready to Uncover Your Credit Union's Unique Risk Profile?

Move beyond assumptions about risk-taking and gain objective insights into the behavioral dynamics that shape your credit union's future. Partner with Glatt Consulting Group to apply the power of the Risk Type Compass™ and empower your leadership with true Risk Intelligence. Learn how.