If memory serves me correctly, Bill Gates once said that humans are prone to overestimating how quickly something will happen (timing proximity), but underestimating the impact when it does happen.
Meanwhile, Thomas Schelling, a Nobel-prize winning economist, said ‘there is a tendency in our planning, to confuse the unfamiliar with the improbable. The contingency we have not considered seriously looks strange; what looks strange is thought improbable; what is improbable need not be considered seriously.’ In short, we are prone to confusing familiarity with probability.
Combining these two observations, it’s possible to create a simple matrix with familiarity and probability as the columns and timing proximity and impact as the rows. The combination of probability and impact is of course the well understood concept of risk.
In the matrix, the diagonally opposite quadrant to probability/impact is interesting – comparing familiarity with timing proximity. Arguably, this concerns flexibility – familiarity & timing proximity fostering preference, preference fostering choice and choice fostering flexibility. Then, if comparing short-term timing proximity with tangible familiarity, that’s a strong candidate for improving flexibility to cope (with a situation). However, if comparing long-term timing proximity with tangible familiarity, or short-term timing proximity with intangible familiarity, those are less strong candidates for improving the flexibility to cope.
Perhaps Schelling’s observation is valid is because we sometimes unconsciously confuse flexibility and risk? To recap, the variables of familiarity and timing proximity are reinforcing on flexibility. The variables of probability and impact are also reinforcing on risk. However, although risk can be managed by introducing greater flexibility (buying options, increasing the range, increasing the versatility or other performance improvements etc), other ways to mitigate risk are just as valid and some risks can be mitigated by decreasing the flexibility (road holding performance and car suspension or improving innovation through specialisation etc).
In conclusion, given all of our unique personalities and the complexities of how our brains work (or don’t work), I guess it’s less about solving the riddle and more about being ever watchful for the ‘sirens luring us onto the rocks, at any opportunity’.