GPM First
Chapter 6 of Understanding and Managing Risk Attitude (978-0-5660-8798-1) by David Hillson and Ruth Murray Webster

Emotion – Definition and Relevance


Everyone experiences emotions throughout their waking and working day, and even when they sleep. Yet like the term ‘risk’, there is no single widely accepted definition for what we all experience. All standard dictionaries offer definitions for the term ‘emotion’, from ‘disturbance of mind’ which suggests something moderately alarming, to ‘mental sensation or state’ which at least begins to hint that the emotions that everyone experiences are neither positive nor negative, but are neutral. For example the fact that a particular person feels fear is only meaningful in context. If the fear is preventing the person from pursuing a course of action that would be beneficial for them, the emotion is negative. Conversely if the fear is preventing the person from doing something dangerous then the emotion is positive. Emotions in themselves have no absolute meaning, their significance is only important in relation to the objectives that people seek to achieve.

One dictionary definition defines emotions as ‘instinctive feelings that arise spontaneously rather than through conscious effort, often accompanied by physiological change’. Such instinctive feelings are not reasoned or logical, but neither do individuals need to be victims of them. Whilst psychologists may differentiate between emotions, feelings, moods, temperament and other affective states, here the term ‘emotion’ is used to mean all of those instinctive feelings that are held and expressed. Further, this definition of the term emotion is used making two central assumptions:

  • Emotions can be recognized, understood, appropriately expressed and managed.

  • People can harness emotions to help themselves and others succeed.


Emotion in the Workplace

However much people may like to think that in work situations they behave logically, analysing problems and making decisions in a rational way, the reality is that emotions are always present, influencing behaviour and actions.

In just the same way that some people may feel fear if they need to express an opinion in front of strangers, others feel angry that people ‘say what they think others want to hear’ instead of telling the ‘truth’. Emotions are at play continually, and people need to understand and deal with them in order to be truly effective.

Although many researchers have attempted to categorize emotions into a small number of basic feelings towards external stimuli, the rich English vocabulary has many words to describe how people feel. Some emotions however are so primal that they are difficult to ignore or mask. For example if someone feels fear, anger or desire in a situation it can be difficult for them to consciously over-ride the subconscious tendency to ‘go with their feeling’. Less emotive words may be used for these feelings, such as anxious, cross or excited, but the effect is the same. Resultant actions that occur as a result of such emotions may be positive or negative (that is fear/anger/desire can be empowering or debilitating), but it is certain that they will affect behaviour.

Other emotions that people feel are less primal and more of a secondary response to some other situation. For example if someone feels sad, worried, happy, joyful, guilty or remorseful about a situation, there is a strong likelihood that the decisions and actions taken will reflect the emotional state of the person involved, unless they consciously manage them.

Not only do emotions drive the actions of individuals, they also affect the wider groups in which people work, and vice versa: the emotional state of colleagues affects decision-making processes if not acknowledged and managed.

Whilst the world would be a lesser place without spontaneity, the route to effective decision-making begins with individuals being cognizant of the emotions that drive them. This awareness does not make the emotion go away, although awareness and understanding can enable the choice to change, but it does provide the basis for harnessing emotions to produce results that lead towards rather than away from goals. Accordingly, it is asserted that If you know yourself, you won’t get in the way (… of your decision-making processes)’, and this is directly relevant to decision-making in general and effective risk management in particular.

The History of Emotional Intelligence

Although the term ‘emotional intelligence’ has only been part of common parlance in the last decade, the concept, as with most things, is not new.

The word emotion (like motivation) has its roots in the Latin verb ‘movere’, which means to move. This is consistent with the definition of emotion that links the instinctive feeling to physiological state. Psychologists in recent times have observed that there is a direct relationship between emotions and motivational states. But such a link has been recognized for centuries.

In 400 bc, the Greek philosopher Socrates (469–399 bc) argued that it is necessary to ‘know thyself to be wise’ and that ‘the unexamined life is not worth living’. Socrates went on to state that ‘Every pleasure or pain has a sort of rivet with which it fastens the soul to the body and pins it down and makes it corporeal, accepting as true whatever the body certifies.’ This was perhaps the earliest published recognition that in order to understand oneself, it is necessary to understand the physiological effects caused by emotions, and also to recognize the emotional effects when we physiologically encounter similar situations in future. This link between the psychological and physiological effect of emotions is shown in Figure 6.1. A key part of emotional intelligence as described today requires people to understand the subconscious patterns they create, and if necessary to be able to interrupt or modify them.

Figure 6.1 Link between the psychological and physiological effects of emotion


In 1649, the French philosopher René Descartes (1596–1650) wrote his last major book called The Passions of the Soul (Les passions de l’âme), and argued that although six basic human emotions affect all the things that people do, one can know what they are and learn how to control them. The six basic human emotions listed by Descartes were wonder, desire, love, hatred, joy and sadness, as illustrated in Figure 6.2.

Descartes claimed that ‘all the others (emotions) are either composed from some of these six or they are species of them’. Like Socrates more than 2000 years before him, Descartes stressed the importance of understanding what each of these emotions [passions] feels like, as well as recognizing the physiological causes and effects in the body. If this is done, he argued that all related emotions could be understood and managed.

Figure 6.2 Descartes’ six passions


Descartes asserted that people can become ‘masters of their passions’ and can ‘control them with such skill that the evils which they cause are quite bearable and can even become a source of joy’. Whilst it is recognized today that not all emotions are negative, the central premise posed by Descartes is that emotions will drive people whether they want that or not, and therefore it is better to understand and harness those emotions for positive rather than negative effect.

In the last hundred years, many people have become aware of the work of the psychologist Sigmund Freud (1856–1939) in exposing the influence of the subconscious mind, and the term ‘Freudian slip’ is now part of everyday language. It is recognized that the subconscious has a much greater impact on behaviour than the rational thought of the conscious mind. However, the application of Freud’s work in the business context has been less clear. This is in part because in the early 1900s, the study of emotions was excluded from scientific psychology because the introspective method used was deemed to be biased and subject to distortion. In addition, during the past century, people began to link success in life with a type of power where a powerful person was one with ‘nerves of steel’ and the capacity to be emotionally detached and cool. In such a world emotions are best kept under a tight rein. These views have changed in more recent years and it is recognized that subjective study into emotions between people is valid, and that personal power depends on having a comfortable relationship with emotions. Emotional intelligence requires that emotions be listened to and expressed in a productive way.

In 1983, the psychologist Howard Gardner (1943–) first published work to demonstrate that human beings display intelligence in a number of different ways, from the classically understood linguistic and logical-mathematical types of intelligence, through intrapersonal and interpersonal intelligences to areas such as musical intelligence. Gardner’s original work described seven intelligences as shown in Table 6.1. This work was ground-breaking in raising awareness that different people learn and demonstrate their intelligence in different ways, and that the classic view of intelligence (measured by the intelligence quotient (IQ) and focused on the use of logical reasoning, rational analysis and spatial orientation to solve problems) was not the whole story. In more recent times Gardner has extended his thinking to examine the validity of inclusion of other areas including moral, naturalist and existential intelligences. This demonstrates the breadth of application of the term ‘intelligence’ beyond traditional interpretations, and lays the ground for inclusion of emotional aspects of the human experience as another type of intelligence.

Table 6.1 Gardner’s seven intelligences

Linguistic intelligence

Sensitivity to spoken and written language, the ability to learn languages and the capacity to use language to accomplish certain goals.

Logical-mathematical intelligence

Capacity to analyse problems logically, carry out mathematical operations and investigate issues scientifically.

Musical intelligence

Skill in the performance, composition and appreciation of musical patterns.

Bodily-kinaesthetic intelligence

Potential for using one’s whole body or parts of the body to solve problems or fashion products.

Spatial intelligence

Potential to recognize and manipulate the patterns of wide space as well as the patterns of more confined areas.

Interpersonal intelligence

Capacity to understand the intentions, motivations and desires of other people and consequently to work effectively with others.

Intrapersonal intelligence

Capacity to understand one’s own desires, fears and capacities and to use such information effectively in regulating one’s own life.

Accordingly when Peter Salovey and John Mayer in 1989 formally introduced the term ‘emotional intelligence’, it made real sense to people who intuitively already knew that IQ was not the only determinant of success in a business context. Many will have smiled at the caricature of the absent-minded professor who fails to succeed in everyday situations despite a high IQ. Some may also have observed, perhaps with some concern if they themselves have high IQ and a brilliant academic record, that many of the people who have succeeded in business terms, either as entrepreneurs or leaders of organizations, may not be particularly intelligent in the classical sense, but that they have something else that enables their success.

Some authors have concluded that traditional intelligence (as measured by IQ tests and academic qualifications in rational subjects) contributes only 20 per cent to the success a person can achieve. The accuracy of this estimate is not important. What matters is that for most people in most situations, success happens (or fails to happen) in a social context, that is involving other people.

Whilst it may be possible to research, describe and theoretically solve a problem by working alone, implementing the solution usually means bringing others along too. There are a plethora of management terms that could be used to describe this ability, from the intangible ‘charisma’ through to the more eclectic ‘leadership’. Whichever term is preferred, all require an ability to handle one’s own emotions (intrapersonally) and those of others (interpersonally); all require emotional intelligence, or a high emotional quotient (EQ) to augment IQ.

The published work of the psychologist and journalist Daniel Goleman and other authors has popularized the term ‘emotional intelligence’ over the past decade. There is now a wealth of literature dedicated to this theme, and designed to help individuals understand how they can become more emotionally intelligent and thus be more successful in attaining their goals.

In some respects, emotional intelligence is a ‘container term’ and clearly everyone has some degree of emotional intelligence that has been learned and developed more or less intuitively. The key questions are:

  • How does natural, intuitive behaviour affect actions?

  • How can individuals acknowledge it (at least), and continually and intentionally develop it (if they choose to)?


The chapters that follow explore the component parts of emotional intelligence as formally researched by a range of psychologists, sociologists and anthropologists, and demonstrate what this means for individuals and for groups, particularly related to decision-making in uncertain situations. Before proceeding, however, it is important to clarify the difference between emotional intelligence and another related term – emotional literacy.

From Emotional Intelligence to Emotional Literacy

The purpose of this distinction is not to argue any particular pedantic point, or to lose the importance of the subject in an argument on jargon. Either term can be used as long as individuals recognize that their ability to understand and manage their emotions is not inherently fixed, but is eminently capable of development.

The term ‘intelligence’ can be unhelpful when thinking of emotional development, partly because western society in recent times has conditioned people to think of IQ as being inherited, fixed or stable. However, intelligence has also recently taken on a somewhat pejorative connotation, for example in the use of the derivative ‘intelligentsia’. By contrast the term ‘literacy’, used predominantly in an educational context, implies a skill that can be learned, nurtured and developed.

Since the early 1960s the clinical psychologist Claude Steiner (1935–) has referred to emotional literacy when working with individuals in therapy (in response to addictions) and for personal development. Steiner’s work importantly relates emotional literacy to those ‘ego-states’ that form the core of Transactional Analysis, the technique originally developed by Eric Berne (1910–1970) in the 1950s (see Figure 6.3 and described in more detail in Chapter 7), and to the concept of giving and receiving positive ‘strokes’ that is the other theoretical foundation of the transactional analytic study of emotions. Steiner is a long-time teacher of emotional literacy and works with people who instinctively feel that emotional literacy training will lead to a loss of control and power in their personal and business lives. When trained in emotional literacy, these people learn that it does not merely involve an unleashing of the emotions. It also involves learning to understand, manage and control them, getting emotions to work for you instead of against you.

Figure 6.3 Transactional Analysis: the rational adult gets data from three sources


Others have picked up on this theme, including the psychotherapist Susie Orbach and her partners in setting up Antidote in 1995, which is a UK-based national charity to promote emotional literacy (see The definition of emotional literacy used by Antidote is: ‘the practice of thinking individually and collectively about how emotions shape our actions and of using emotional understanding to enrich our thinking.’ This definition is important as it acknowledges the need for both individuals and groups (the collective) to be emotionally literate if the quality of thinking and decision-making is to improve.

Emotional literacy development is now widely available for individuals and teams in the workplace as well as for individuals on the psychiatrist’s couch. Unfortunately to some, such development has become a consultant’s growth business, and in the workplace emotional literacy (or emotional intelligence) can be seen as synonymous with qualities such as mature, stable and/or hard-working, which is to miss the point. Whilst such qualities are highly desirable in people at work, they are not the same as, nor are they necessarily indicative of the qualities of the emotional literate person which include the ability to be self-aware, empathetic and emotionally resilient. There is huge scope for development of individuals and groups in the workplace if the idea can be dispelled that being emotionally literate is mutually exclusive with power or commercial savvy.

In contrast, emotional literacy has become a significant subject matter for educational authorities and schools where children are increasingly being educated about their different feelings, how to speak about them and how to express and control them appropriately. This bodes well for future recognition of the importance of emotional literacy in business, as emotionally literate children and young people grow up and take their place in society.

For most adults, emotional development is a complex process and at a basic level involves both:

  • temperament, which is largely inherited and is often described as nature, and

  • environmental factors, which are products of experiences such as parenting, friendships, education and passive uptake of information from the media and can be described as nurture.


It is not necessary here to debate the relative importance of nature and nurture and relate this to emotional literacy as it is the overall effect rather than the relative impacts of the constituent parts that matter. The important thing is to acknowledge that everyone has emotions, and emotions can get in the way of decision-making and success in attaining goals. To prevent emotions having a negative effect on success, or to avoid leaving the emotional element of success to chance, the starting premise is that people are not victims of their emotions but can choose to become increasingly emotionally literate and thus take greater control of their destiny, both in their personal private lives and in the work environment.

Accordingly, and in line with the published work of educational psychologist Peter Sharp, the definition of emotional literacy used here is the ability to:

  • recognize emotions,

  • understand emotions,

  • appropriately express emotions and

  • deal with emotions


in such a way that it facilitates achievement of business and personal goals. In short, the aim is for people to know themselves well enough that they don’t get in the way of the situation. This approach is powerful when adopted at an individual level, but the potential impact of emotionally literate groups is immense.

Emotional Literacy and Risk Management

It is inherent in the nature of risk management for it to be exposed to sources of explicit and implicit bias, since all elements of the risk process are performed by individuals and groups of people whose risk attitudes affect every aspect of risk management. Part 2 of this book has shown that risk attitudes exist at individual and group levels, and these can be assessed and described with some degree of accuracy. Sources of bias as a result of situational assessments (p46) and heuristics (see Chapter 4) can also be diagnosed, exposing their influence on the risk process. In this chapter we have added to the analysis of sources of bias on perception of risk by drawing attention to emotions that matter. Emotions can assist people in managing risk or can be a hindrance. The three influences intertwine to influence perception and shape risk attitude; this intertwining of three different influences we will refer to as the ‘triple strand’.

Figure 6.4 The triple strand of influences on perception and risk attitude


Where the risk attitude adopted is not conducive to effective risk management, action is required to modify attitude. Emotional literacy provides a means by which attitudinal change can be promoted and managed, for both individuals and groups.

All elements of the risk process are affected by the emotional literacy of the stakeholders, at both individual and group levels, including:

  • identification of uncertainties;

  • assessment of probability or likelihood of the uncertainty occurring;

  • assessment of potential impact should the uncertainty occur; and/or

  • deciding how to respond to assessed risks.


The assertion that emotional literacy aids effective risk management can best be demonstrated by considering a number of scenarios. Each of the four examples below presents a realistic (though fictitious) case, allowing the effect of ‘the triple strand’ to be considered in the context of specific elements of the risk management process, and exposing the different outcomes that might result if the people involved were emotionally literate or not. After outlining each scenario, the implications for an emotionally literate response are summarized. Readers are invited to read each scenario and think about the different ways in which situational assessment, heuristics and/or emotions might affect the outcome, before reading the summary.


The effect of emotional literacy on identification of uncertainties

Manager A feels very pleased that his company’s most recent project to offer services in a new geographic region has met all the business objectives set at the start. He feels confident, despite some opposition, that his personal leadership of the project was pivotal to the success. He asserts strongly that ‘people are people’ the world over and that there is no need to pay any particular attention to national cultural differences when planning such market extensions. The company is now planning to extend service provision further and is holding a risk workshop to identify the potential threats and opportunities which it will be necessary for the company to manage. Manager A is frustrated that some members of his management team seem to think that there is a number of threats associated with the new venture that he does not see; he wants to press on quickly and build on the success of the previous project.

Summary of the influence of perceptual factors on Scenario 1

If Manager A were emotionally literate he would recognize his feelings of pleasure in past efforts, confidence in himself and frustration that others might see potential problems that he does not see. He would also recognise that his perception was biased by his experience of success in a similar, but different, project that was recent and therefore vivid. He would be aware that this combination of situational assessment, the representatitiveness heuristic and his accompanying emotions might result in him doing the wrong thing in the risk workshop. He would recognise the need to involve others who did not have the same background and experience when identifying uncertainties and the need to look for both threats and opportunities, not just the upsides to confirm his starting position.

However, if Manager A lacks emotional literacy, he may use his position of power in the management team to close down creativity and bully colleagues into conforming with his views, not recognizing or caring about the effect he is having on others and the resultant potential effect on the latest project.

If Manager A were to misuse his power in this way, emotionally literate colleagues may recognize how this behaviour makes them feel and have the ability to control the effect of this.


The effect of emotional literacy on accurate assessment of probability

Manager B is resentful of the actions of a previous colleague when they were involved in a joint business venture. This resentment was debilitating for Manager B for a long while, but a business opportunity has arisen with a new company that, if successful, would damage the business of the former colleague. Manager B is excited about this opportunity for revenge. Her management team has identified a number of threats and opportunities associated with the new venture. Manager B’s view is that the threats are minimal (this won’t happen to us) and the opportunities are massive (we can definitely make this happen).

Summary of the influence of perceptual factors on Scenario 2

Acting with emotional literacy, Manager B would understand that her past feelings of resentment and desire for revenge may result in her making the wrong decisions about the new business venture. She would realise that personal propinquity (this is of importance to her personally) was a biasing situational factor and would develop strategies to cope with their feelings when they arise. She would also recognise the supporting role that colleagues could play in countering her reactions.

An emotionally illeterate Manager B may be able to convince her colleagues that she is right about the assessment of probability of the risk identified, unaware that her assessment is driven by the personal nature of her past experience and her emotion-charged memories associated with this experience.

Emotionally literate colleagues may be able to recognize the feelings of Manager B and find ways of helping her see that it is not sensible to jeopardize the new venture by biasing decisions based on feelings.


The effect of emotional literacy on accurate assessment of impact on objectives

Manager C is the sole shareholder in a company that made a loss in the last financial year due to an investment made in a new product that, to date, has not met sales targets. The causes of the disappointing results were due to changes in market conditions that could not have been foreseen or managed by the company. A new opportunity has been identified to design a further new product to meet a market need. Investment appraisal has shown that the initiative should pay back the initial investment of £2M within 12 months of product launch with an ongoing contribution to company profits of £5M/annum from this product line. Manager C is keen that on this occasion the team identifies all the potential threats and assesses their probability of occurrence and impact should they occur, as he is frightened that the company is going to make another expensive mistake that may ‘take the company down’. The team has identified a long list of potential threats, assessed the probability of each and is assessing the impact should each occur.

Summary of the influence of perceptual factors on Scenario 3

If he is emotionally literate, Manager C would recognise and acknowledge that his fear of failure may result in him overplaying the impact of threats on objectives for the new venture. A recent situation with a disappointing outcome tends to bias assessment of probability (more likely) and overplay the impact (would be even worse than last time) so he would recognise the value of colleagues in balancing this view and providing more objective evidence with which to evaluate the new opportunity.

Lack of emotional literacy may mean that Manager C might try to convince colleagues that the project is so risky that it should not be pursued, thus pandering to his fear and preventing the company from taking the opportunity.

Emotionally literate colleagues may be able to counter the fears of their boss, or at least be able to acknowledge his position and deal with their own feelings in a rational way.


The effect of emotional literacy on risk response decisions

Manager D has just joined a new company as Health and Safety Manager. At her previous company, an employee suffered a fatal injury and the resulting enquiry criticized the management for failing to provide adequate supervision for the activity being undertaken. The employee that died was a personal friend of Manager D and she still grieves the loss and blames herself for the situation although it has been explained many times that she was not actually personally responsible in any way. The new company is building a new facility and Manager D is leading the hazard and operability (HAZOP) studies for the development.

Summary of the influence of perceptual factors on Scenario 4

An emotionally literate Manager D would recognise that her grief and guilt may bias her assessment of the hazards in the new situation. She would understand that the strong memory of the major impact in her previous company was biasing her judgement about the likelihood of a similar situation happening and she would seek the advice of other colleagues to support her and bring objectivity to the assessment.

Without emotional literacy Manager D may have enough influence to impose her views on the other HAZOP team members, and result in inappropriate safeguards being made.

Emotionally literate colleagues may be able to support Manager D to the extent that her grief does not interfere with her ability to make judgements in future.


The importance of being able to recognize, understand, express and manage emotions as a means of controlling behaviour has been recognized for centuries as expressed by philosophers, psychologists and educators alike. In recent times, writers have popularized the fact that success in both a personal and business context requires emotional as well as traditional intelligence. A significant body of evidence also exists to demonstrate that emotional intelligence can be developed where there is a desire to do so, and that accordingly people can become emotionally literate.

Decision-making is an activity that consumes a large percentage of time for many individuals and groups, particularly in the workplace, and this is definitely the case for people involved in the discipline and profession of risk management. However, decision-making in uncertain situations is affected by the numerous sources of explicit and implicit bias as described in Part 2, and these biases exert a significant influence over individual and group risk attitudes. This chapter has asserted that another significant contributor to risk attitude is the emotional state of the individual or group involved, and therefore development of emotional literacy will have a direct effect on the efficacy of the risk management process.

The remainder of Part 3 focuses on a more in-depth examination of the component parts of emotional literacy for individuals in Chapter 7, followed by examination of the application of emotional literacy to groups in Chapter 8.

Submit your own content for publication

Submit content