Robert B.
Stratton

I use south-up maps in my talks because they make people pause. Australia and Antarctica are at the top, and it takes a moment to find your bearings. We get so used to north being at the top that we forget it’s a choice.

I use that moment to ask what other assumptions we’ve stopped noticing. A different frame can change how we understand the same information.

My risk governance presentation starts with gambling. It gives us a familiar way to talk about what we stand to gain, what we could lose, and how much we’re willing to put at stake.

Organizations face those questions too. A useful risk conversation starts with the opportunity we’re pursuing and the uncertainty we’re willing to accept. That makes risk appetite something people can discuss in the context of an actual decision.

Philosopher John Searle introduced the Chinese Room thought experiment in 1980. Imagine a person who cannot understand Chinese sitting inside a room. People outside pass in written questions in Chinese. Using an elaborate instruction book, the person manipulates the symbols and sends back answers convincing enough that those outside believe they are communicating with someone who understands the language. Inside the room, the person understands neither the questions nor the answers. Chinese is simply the unfamiliar language in this example; another language unknown to the participant would serve the same purpose.

Searle’s argument is that following rules for manipulating symbols does not, by itself, establish understanding. I used to call this the “Siri problem” to give audiences a more familiar reference. Today, large language models make the question even more immediate. Applied to an LLM, Searle’s argument would challenge whether its sophisticated computational processes produce understanding, even when its responses appear knowledgeable. That remains a contested philosophical question.

How it connects to my work

In a complex organization, each department or each step in a process may perform its assigned work without understanding the bigger picture. People know what comes in, what they are supposed to do, and what gets passed along. They may have little visibility into the ultimate purpose, the risks created across the process, or the opportunity the organization is pursuing.

One objection to Searle is that understanding might belong to the whole system, even if the person inside the room lacks it. I find that especially useful when thinking about organizations. No individual needs to know everything. But the organization needs some way to connect what people know, examine the assumptions between steps, and make decisions with a view of the whole. That is a central concern in my risk and governance work.

Why it matters

A process can produce the expected output at every step while leaving important questions unanswered. Who understands what the organization is trying to accomplish? Who can recognize a risk that crosses departmental boundaries, or an opportunity that falls outside anyone’s assigned responsibility?

The Chinese Room gives us a way to ask whether our processes connect individual expertise into organizational understanding. Completing each step tells us something about execution. We still need to ask who can see what it all means.

A shareholder elections committee chair once wanted to impose rules limiting who could run for the board. I explained that the shareholders get to decide who they want as directors.

That was a light-bulb moment for her. It clarified how she understood her fiduciary responsibility. I like those conversations, where connecting a decision to the bigger picture helps someone see their role more clearly.

Ethical decision making and speak-up culture depend on how clearly an organization communicates its objectives, goals, and risk appetites. People need to understand what they are trying to accomplish, what tradeoffs they can make, and when a concern needs to reach someone else.

They also need psychological safety: confidence that they can ask a question, acknowledge uncertainty, challenge an assumption, or report a problem without humiliation or retaliation. Clear expectations help people exercise judgment. Psychological safety helps them speak when that judgment tells them something needs attention.

An organization’s first risk assessment illustrates how easily those conditions can break down.

Some leaders openly identify risks, explain weaknesses, and describe what could go wrong. Others share little or hide concerns. The resulting risk register may make the most forthcoming leaders appear to have the most troubled departments. Less transparent leaders can appear to have everything under control.

The register then reflects differences in candor as well as differences in risk. If leadership treats it as a performance ranking, the organization gets an inaccurate picture and penalizes the people who helped make that picture clearer.

How it connects to my work

I use risk-based governance to connect organizational objectives to the decisions people make throughout the business. Clear risk appetites and escalation expectations help people understand where they can exercise discretion, what requires further discussion, and how to explain their reasoning.

That framework also establishes how leaders should use information about risk. Identifying a concern begins a conversation about its significance and what to do about it. The number of risks a leader reports says little, by itself, about how well that person leads.

When reviewing an initial assessment, I want to understand how the information entered the register. Are departments using similar thresholds? Do people understand the questions? Do they trust the process? Does a short list reflect limited exposure, limited awareness, or reluctance to disclose?

Psychological safety matters here because people take an interpersonal risk when they reveal a weakness or disagree with someone influential. Leaders need to demonstrate that candor receives a fair hearing. Accountability remains essential, including accountability for concealing a concern. A fair review considers what someone knew, the choices available, and how they acted.

I also consider organizational structure. Employee-owned companies, privately held businesses, public companies, benefit companies, and nonprofits distribute authority and accountability differently. Those arrangements can influence whose interests leaders prioritize, how they respond to good and bad news, and how comfortable employees feel challenging a decision. Structure provides part of the context; leadership’s behavior determines whether openness feels credible.

Why it matters

People notice what happens to colleagues who speak candidly. If reporting a risk brings blame, the next assessment may look better because people have learned to share less.

I want governance to give people a clear basis for making wise decisions and confidence that reasonable judgment will receive fair consideration. That requires transparency about objectives and acceptable risk, psychological safety to raise concerns, and a consistent response from leadership.

A useful risk register depends on people being willing to tell the organization what it needs to know. How leaders respond to that information shapes the quality of the next decision, the next assessment, and the culture people work in every day.

Geoffrey Miller and Gerald Rosenfeld introduced “intellectual hazard” in a 2009 working paper, published in the Harvard Journal of Law & Public Policy in 2010. They examined how behavioral biases interfere with the way complex organizations acquire, analyze, communicate, and act on information. Their analysis focused on the 2008 financial crisis, with connections to failures in space exploration and surgery.

The concept draws attention to what happens to information as it moves through an organization. Important evidence may receive too little attention, lose context between departments, or fail to reach someone who can act on it.

How it connects to my work

I work with a lot of smart people, including physicians and lawyers. Their expertise is essential, but expertise does not make anyone immune to cognitive bias. A familiar explanation can become an assumption we stop testing. Information that supports our judgment can seem more persuasive than information that challenges it.

Intellectual hazard helps me examine how those tendencies affect the organization. Whose judgment carries weight? Can someone question an established view? Does information retain its meaning as it moves from a specialist to management and then to the board?

Those questions matter because decisions often depend on several people’s expertise. Each person may understand their part well, while the organization struggles to connect what they know.

Why it matters

Qualified people, extensive data, and formal reporting processes can coexist with serious gaps in understanding. In my risk and governance work, I look for ways to make those gaps visible and give people room to challenge a conclusion.

I want someone to be able to ask, “What would make us reconsider?” without others hearing it as an attack on their competence. That question can help an organization recognize a risk, revisit an assumption, or see an opportunity it has overlooked.

Read Miller and Rosenfeld’s paper ↗