Stuck in Traffic

Most crashes happen on dry roads, on clear sunny days, to sober drivers. For this reason, roads that could be straight are often constructed with curves – simply to keep the driver more alert.

Traffic has always been bad.

By studying chariot “rutways” and “wear patterns on curbstones” archaeologists have determined that the citizens of Pompeii had to contend with construction detours and one way streets.

In the New York of 1867 horses were killing an average of four pedestrians per week (a rate higher than today’s rate of traffic fatalities).

In the new book – Traffic: Why We Drive the Way We Do (And What It Says About Us) by Tom Vanderbilt, the history, challenges and theories of driving are explored.

The conundrums raised make for an interesting parallel to the world of internal controls and risk management.

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According to a study by the Texas Transportation Institute, merging is the most stressful single activity we face in everyday driving. Sometimes this is based on the mechanics of driving – entering a stream of traffic flowing at higher speed than yourself.

More likely, however is the stress caused by the perception of reward denial – we seem to register losses (ie – the inability to merge) more powerfully than gains (ie – the ability to merge) and the registering of the losses enhances stress.

Adding to that is the fact that researchers have estimated that there are anywhere from 1,500 to 2,500 skills and activities we undertake while driving.

As Vanderbilt notes:

“We are operating heavy machinery at speeds beyond our long evolutionary history, absorbing (and discarding) huge amounts of information, and having to make snap decisions – often based on limited situational awareness, guesses about what others are going to do, or a hazy knowledge of the actual traffic law.”

Translate that to the world of risk and internal controls and rephrase the sentence and you can see if you understand the dynamics of traffic you start to understand the dynamics of risk. Here is a feeble attempt to do just that:

We are operating strategies in markets not well known to us, absorbing (and discarding) huge amounts of information, and having to make snap decisions – often based on limited situational awareness, guesses about what others are going to do, or a hazy knowledge of the regulatory environment.

No wonder managing a complex organisation is stressful!

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The concept of familiarity and its dire consequences is also relevant.

Accidents are more likely to occur closer to home. Mostly this is because we do most driving closer to home, but studies show that we pay less attention to signs and signals on local roads, because we “know” them, yet this knowledge actually gives us a false sense of security.

Additionally people drive faster around curved roads that are marked with signs telling them the road is curved. We tend to behave more cautiously in the face of uncertainty.

Most crashes happen on dry roads, on clear sunny days, to sober drivers. For this reason, roads that could be straight are often constructed with curves – simply to keep the driver more alert.

What then are the implications for overt or visible preventative controls in a workplace as compared with covert or hidden preventative controls?

The desire for transparent / visible / overt controls has been strong over the last decade but perhaps we need to consider whether that is in the best interests of the organisation.

Would it be better to enshrine covert or hidden controls within a process to ensure that management always act with caution? What then are the implications on entrepreneur spirit?

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Finally of interest is the benefit of having an opinionated back seat driver – relevance perhaps for justifying the role of Internal Audit in an organisation!

Statistics show that people are less likely to crash when they are accompanied in a car (except, tragically, teenage drivers).

Why is this the case?

Firstly, driving as an activity often lacks regular feedback – we are often not aware in the moment of how close to a crash we almost came, or own capability.

Secondly, drivers tend to self enhance. We all tend to thing that we are better than average, or at least average drivers. Passengers are not caught in this dynamic and can provide more objective assessment of the quality of our driving.

Hence the link with Internal Audit – that Internal Audit is not joined to the mechanics of a decision / strategy derived by Management the same way the manager who is making the decision does makes Internal Audit more relevant in providing feedback.

Internal Audit’s challenge is to be seen not as a traffic cop!