Live from RiskMinds International 2018, we summarised everything we’ve learnt from Boris Johnson MP’s keynote: his take on risk and risk culture.
Without risk there is no reward. Worse than that, adopting a risk-averse strategy actually causes more problems than it seeks to solve.
These were the conclusions drawn by the former UK foreign secretary and Right Hon Boris Johnson MP, as he addressed a packed room at RiskMinds International 2018 in Amsterdam.
Staring into the jaws
When he thinks about risk, Johnson takes equal inspiration from the fictional mayor in Stephen Spielberg’s film Jaws and the UK’s fêted wartime leader, Winston Churchill.
Faced with the threat of a giant fish eating his constituents, Amity Island’s mayor Larry Vaughn refuses to shut the beach, preferring to support the needs of the shops and restaurants that need the upcoming 4th July weekend income to survive.
In the fictional realm, Mayor Vaughn’s political decision proves questionable. But the point Johnson is trying to make is that in real life he made the right call on risk.
“Politicians have to be impervious to hysteria, they have to be cool in the face of panic – of the media, lobby groups and fellow politicians.
“So many of our day-to-day decisions are very much like that decision taken by the mayor in Jaws – we have to keep the beaches open despite the presence of a great white shark.”
And he served up some real life examples of this approach during his time as Mayor of London.
When asked to shut down large parts of the tube or cordon off central activity zones in London on the threat of a terrorist attack: “the answer was no”.
When asked to shell out for 60,000 plastic ponchos because, three days before the Olympic opening ceremony, rain was forecast, he said no: “It does not rain in London 94% of the time. On the day, there was a light drizzle. We saved the city millions of pounds on what would have been a pakamac mountain.”
Music to the ears of the risk professionals in the room, Johnson said his analysis of risk was very much data-driven:
“Every time I have had to deal with all those types of problems, I have tried to be faithful to the actuarial reality of the situation.”
Why are we so cautious?
But his natural proclivity for risk-taking is not shared by all politicians in the UK today, lamented Johnson.
“We have a culture and spirit of such caution and risk aversion that sometimes we can’t make the progress that we need to make. You need politicians to take risk on your behalf, you need them to take tough decisions and lead you through difficult patches and get things done. It’s the duty of politicians as professional risk takers to be robust – there will always be people to tell you to play it safe.”
Johnson places the blame for this new era of caution on the huge damage done to Western confidence by the disastrous Iraq war, as well as the credit crunch of 2008.
“The Iraq war is a factor in much of the current turmoil in the Middle East and it is that turmoil which has helped to spawn and create much of the apprehension we now have about terrorism...the credit crunch and crash of 2008 shook our confidence in our Anglo Saxon way of doing things, it rocked confidence in politicians, in regulators and our self-confidence.
“I don’t deny they were shocking events but the ensuing mood has been very damaging,” said Johnson.
He cited the 2015 Metrojet bombing as an example. The Russian aeroplane was brought down in a terrorist attack while leaving Egypt, killing all passengers on board.
As a direct result of the bombing, the UK no longer allows flights to Sharm El Sheikh, one of the most popular holiday destinations for UK holiday makers.
“I made the case that this was irrational. Sharm has an airport that is safer than many in the Middle East that are regularly served by UK flights. The ban has done massive damage to the Egyptian economy and is causing a scale of unemployment in Egypt that makes it easier to radicalise young men and turn them into terrorists.
“The anxiety about terrorism drives perverse results. But I simply couldn’t land the message on it. They were so frightened of the media impact of a terrorist outrage that they continue to ban UK flights. What they worry about in particular is their own careers and being personally blamed for what happens.”
Fear and Brexit
It was this type of anxiety that had led to the current situation regarding Brexit, he argued (Johnson had promised not to talk about it, but with the first of five days’ debate about to be unleashed on Parliament, how could he not?)
“Nowhere in our current political beat is this excessive caution more debilitating than Brexit. Project fear has got into our marrows and is being used to keep the UK in the single market and Customs Union.
“Whatever you think of Brexit, there is no point leaving the EU if you are going to be run by the EU.”
It’s time we were all a bit more like Winston Churchill, the man Johnson really holds up as a hero.
“You look at Churchill, you see a man whose whole career was about risk taking. He took one compulsive gamble after another, and he took all sorts of positions on things that went disastrously wrong, but in the 1930s he took one giant bet – against Hitler and the Nazi party, despite huge opposition.
“I’m not making a comparison with that and today, but the fact is that if Churchill hadn’t been there in that room then democracy in Europe as we know it would have been distinguished for a long period.”
It was a terrible gamble: within a year, 30,000 British had been killed, but the long term gain to rescue the continent from odious tyranny was right, said Johnson.
“The lesson I draw from that is sometimes you do need to do the difficult thing and take the position that everyone says is too fraught with risk.
“Without risk there can be no reward, taking a gamble on an uncertain outcome is the very stuff of human achievement."