Thread by @joshuamschultz

Risk Decay, a bias in how humans see large risk events, can have a major impact when building a business that can last 100+ years.

Protecting against this is hard, but here is a way that lowers the chance of it ruining your business...

Risk Decay is the idea that our perspective of our vulnerability to a risk declines as that risk falls further and further into history.

When a major risk occurs, it is in our face, emotions and all.

Following preventive measures and spending money on risk mitigation are no problem.

As time progresses, the idea of that risk fade from memory.

However, the costs stay constant.

So the risk/reward payoff diminishes due to our changing perspective.

To adjust for our new lens, we reduce investment and perspective over time.

Eventually all but eliminating the preventive measures put in place.

All in time for a new risk event that has the same outcome as before, regardless of the preparation to avoid the next time around.

Doing a Disaster Post-Mortem which helps future leaders and readers understand
* The context of the event
* The facts of the event
* The EMOTIONS of the event (and loss)
* The problem assessment and solution brainstorm
* The solutions chosen and how you arrived at them

These post-mortems can help future leaders tie into and associate with the preventative measures, and re-enforce their effectiveness through continued support.

joshuaschultz.com/thoughts/risk-…