Risk Management and the Human Species


We consider ourselves a smart species; after all, we make smart decisions, we have smart phones, smart cars, smart this and smart that. How smart are we really? A full discussion on that will be a long-drawn dialog, so I will reserve it for another time. In this article I will explore that question purely through the lens of risk management; something that all species tend to do either systematically or by what we may consider as standard operating procedure (SOP). But wait! There is another SOP too, and it is not what you think. The answer is coming – so read on.  

Talking about other species, Laurie Santos, a Yale University professor, has shown that capuchin monkeys make irrational choices, taking more risk when they have something to lose than when they have something to gain1 in that they were more risk averse even when it defied logic.

Humans exhibit similar behaviors when making choices. They would rather accept a sure gift of $500 than take a chance on a $1,000 gift that depended on the outcome of a coin toss, given there was no chance to lose anything even if the outcome was unfavorable. On the flip side, they would accept taking a chance based on a coin toss even if the potential loss was $0, or $1,000, rather than swallow a $500 guaranteed loss. The logic (or lack thereof) being they would be the lucky ones who could walk away with no “loss.”  

Scientific research has shown that humans often make irrational choices when it comes to #riskmanagement. Find out how this can affect #LifeScience manufacturing, says @MCMasterControl #, says @mastercontrol http://bit.ly/2P9ElI3

In other experiments (by Dr. Daniel Kahneman and Amos Tversky), they found that framing the question has an enormous impact on how people perceive risk and the decisions they make. Given a choice that a treatment can lead to saving 200 lives out of a group of 600 versus saying it could cause 400 deaths from the same group, 72 percent chose the former, while 22 percent chose the latter2.

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That Can’t Happen in the Life Sciences, Right?

Ready to re-think how smart we really are? What is it in our cognitive abilities that pre-disposes us to making wrong or bad choices and overlooking common sense? Consider the following before we attempt to dice that question:

  1. In the late 1990s, pharmaceutical companies reassured the medical community that patients would not become addicted to opioid pain relievers and health care providers began to prescribe them at greater rates3. We already knew how hard it was to quit smoking – how could we not see the opioid addiction crisis coming?

  2. A recent study from Johns Hopkins suggests that medical errors are now the third-leading cause of death in the U.S., having surpassed strokes, Alzheimer’s and diabetes. According to the Agency for Healthcare Research and Quality, there are eight common root causes of medical errors3. When I reviewed the causes, seven of the eight were human related. The question is – how good are humans when it comes to error detection and prevention?

  3. Over 80 million CT scans are performed in the U.S. compared to just 3 million in the 1980s4. Further, many minimally invasive procedures are performed using intra-operative X-ray imaging – leading to high exposure of the patients as well as clinicians in the room. What is the impact of this on human health? There is no clear dataset that helps answer that question, neither is it feasible to conduct controlled studies to find answers. The result – both patients and clinicians live under the impression that the low doses are benign. What is a safe limit? Well – it has gone from about 25,000 mRems during World War II, to 15,000 in 1950, and 5,000 in 19575 – which is the current level. Is that safe enough? No one knows.

What Is One to Do?

Start with a 2x2 diagram as illustrated below, understanding each quadrant with the interpretation provided, and slot your scenario in the respective quadrant.


1: Prepared for the Known risks: Most firms that conduct risk management operate in this mode.

2: Not prepared for the Known: This is where many firms exist, in a state of blissful ignorance. Do you think there is an excuse for them to be in this predicament?

3: Prepared for the Unknown risks: Those that conduct risk management with extreme diligence will find themselves here, although there will be some surprises. By and large, such firms will fare better than all others.

4: Not prepared for the Unknown: This is one of the worst situations to be in. I call them the “sleeping” sitting ducks. Don’t worry, be happy, and soon your life will be crappy!

To hone your ability in risk management, step out of your comfort zones and face the reality, no matter how much it hurts. Try slotting each of the previous scenarios A, B and C into one of the above quadrants. I would be curious to see your results.

To hone your ability in risk management, step out of your comfort zones and face reality, no matter how much it hurts. #Lifescience professionals that conduct risk management with extreme diligence will far better than others, says @MCMasterContro #, says @mastercontrol http://bit.ly/2P9ElI3

  • Machine oils and the human body do not mix – nothing new here. Then how and why did a joint replacement company allow the machining of the porous coating (the bone interfacing part of the hip implant) to take place? Porous coatings by their very nature have a high surface area, and the probability that one could remove “all” traces of oil from the nooks and crannies of such coatings is extremely low. It was a terrible loss for the patients, and the company – one that was avoidable for sure. This is a story from the early 2000’s.

  • My mother complained of a sinking feeling two days after she got a pacemaker. Her heartbeat was down in the mid 40’s; same as before getting the implant. I called the hospital immediately to discuss/get guidance and was told this was to be expected. What? If that was the case, why did they put in the pacemaker in the first place. Anyway, after heated debate they agreed to admit her for examination. A lead had become detached. It was replaced, and she came home. Attempts to meet with the quality director or other leadership at the hospital were thwarted by vague arguments and evasive tactics that I simply could not put up with. Finally, I was told this was to be expected since the leads have a detachment rate of between 5–10 percent. My goodness, what would have happened if I had left town for business and my mom was alone at home? Which quadrant do you think I was in? Which quadrant was the hospital in?

Let’s get back to the SOP question we started with earlier. Would it be fair for me to say that in the above examples, and in scores of others, the modus operandi was that of “seat of pants?” Otherwise, how could one explain smart species doing dumb things. I will wait for your answer on that.

All contents of this article are copyright of Rai Chowdhary and may be used by MasterControl under permission from the author.


1: http://www.cnn.com/2010/OPINION/07/16/ted.future.of.humanity/index.html
2: Tversky, Amos; Kahneman, Daniel (1981). "The Framing of decisions and the psychology of choice". Science. 211 (4481): 453–58. Bibcode:1981Sci...211..453T.doi:10.1126/science.7455683PMID7455683.
3: https://alwaysculture.com/hcahps/communication-medications/8-most-common-causes-of-medical-errors/
5: http://news.mit.edu/1994/safe-0105

Rai Chowdhary
, MS, CQE, CQM, CQA, Six-Sigma Black Belt, is an author, business coach and entrepreneur. He brings over 30 years of experience from life sciences, aerospace, automotive, food and chemical process industries. He has served in various roles most recently as an executive with oversight of operations, quality and manufacturing. His achievements include inventing and commercializing numerous technologies and devices including the world’s first and only radiation shielding cream, and bonding of titanium with cobalt chrome for which he won the Sulzer Innovation Award from his parent company in Switzerland.

In the recent past he played a vital role in the design and execution of animal and preclinical studies, data analysis, consulted on scale up manufacturing of polymer-ceramic composite bone void fillers, and provided strategic direction to world leading firms on Operational Excellence.

Rai has also been instrumental in getting products through the regulatory process working with the FDA, setting up the QMS, and obtaining ISO 13485 and CE registration for medical devices. He played the lead role in mapping supply chains from source to point of use while optimizing efficiency and eliminating risk factors. His team was key to launching products from conceptual design to pilot, and then to commercial scale manufacturing. His contribution to onboarding key clients such as GE, Phillips, Siemens, and other Fortune 500 companies are also noteworthy.

Some of the companies Rai has worked/served with include: Intermedics Orthopedics/Sulzermedica, Applied Materials, Dell, DuPont, BLOXR, Edwards Life Sciences, Reckitt Benckiser, Glaxo, Amedica, Lam Research, Intuitive Surgical and Abbott Spine.