Risk-Free is a Lie: Learning from Loss

Risk-free is a lie.

Anything worth doing carries risk.

A (personal) story about loss, and how the mountains shaped my framework for risk management in business:

— Jasper Polak (@polak_jasper) June 21, 2023

On April 24th, 2016, I got a phone call that changed my life.

The kind of call you hope to only have in a nightmare.

Until you have it for real.

One of my best friends, mentor, and adventure partner was killed in an avalanche. pic.twitter.com/dgGQ2BxJ4u

— Jasper Polak (@polak_jasper) June 21, 2023

While dealing with the loss, I realized it was killing the thing that bonded us.

I was losing my love for the mountains.

Skiing. Kayaking. Climbing.

Adventures in remote places.

Joy was replaced by fear. pic.twitter.com/J7sAddOa2o

— Jasper Polak (@polak_jasper) June 21, 2023

I'm a rational guy, so I did what rational guys do.

Study. Learn. Find data.

Come up with 100 logical reasons why I should continue to ski.

But it wasn't working.

My therapist was clear: I had to expose myself to it.

And that took an interesting turn...

— Jasper Polak (@polak_jasper) June 21, 2023

Years before the accident, I took an avalanche course.

It taught me how to deal with risk and was a great experience.

Deep down inside me, I'm a teacher.

And when I met the owner of the company through a mutual friend, it clicked.

— Jasper Polak (@polak_jasper) June 21, 2023

Teaching others to enjoy the mountains safely, forced me to expose myself.

Face my fears while tapping into my enthusiasm.

The initial training and the first season were rough, but it's been an incredible experience ever since.

And the smiles on clients' faces are priceless.

— Jasper Polak (@polak_jasper) June 21, 2023

Back at the office, no one understood it.

Taking time off to work to shovel snow in bad weather.

But apart from helping me mentally, it has shaped my relationship with risk.

And that's become a differentiator in how I lead teams & projects. pic.twitter.com/Pl7M68JbSu

— Jasper Polak (@polak_jasper) June 21, 2023

Clients, both in my company and in the mountains, wonder what they can do about risk.

To frame our options, I use the TAME framework:
- Transfer
- Accept
- Mitigate
- Eliminate

Here's how it works:

— Jasper Polak (@polak_jasper) June 21, 2023

Transfer risk

What's high risk for you, might be low risk for me.

Maybe I have better skills, tools, or more knowledge.

Examples:
- Hire a mountain guide
- Outsource a project to a consultant

— Jasper Polak (@polak_jasper) June 21, 2023

Accept risk

Nothing is risk-free, and you'll have to accept that.

The amount of residual risk you are comfortable with is different for every person and organization.

Find it, and you'll sleep better.

Example:
- A medical trial has lower risk tolerance than a gaming startup

— Jasper Polak (@polak_jasper) June 21, 2023

Mitigate risk

You can take action to lower either the probability of something happening or the impact if it happens.

Example:
- Procedures, tests & controls lower the probability
- Time buffers and avalanche transceivers lower the impact

— Jasper Polak (@polak_jasper) June 21, 2023

Eliminate risk

You might be able to completely eliminate a risk.

While this sounds attractive, it's often unpractical or expensive.

Explore all options before you eliminate.

Example:
- Change project scope or redesign a process
- Not ski on days with extreme avalanche danger

— Jasper Polak (@polak_jasper) June 21, 2023

Bonus: stacking TAME

Experienced operators stack different elements of the TAME framework.

They mitigate to lower the probability & impact, accept some residual risk, and insure themselves against a worst-case scenario.

I bet you're doing this at home already:

— Jasper Polak (@polak_jasper) June 21, 2023

You don't leave the fireplace on when you leave.

You have a smoke alarm & a fire extinguisher.

And you've insured your home, just in case.

— Jasper Polak (@polak_jasper) June 21, 2023