Jost, as Associate Professor of Strategic Leadership at VU, you publish in leading academic journals on leadership and decision making in complex environments. Can you share a research finding that typically serves as an eye opener for executives about their own judgment, something that challenges how they think about their decision-making capabilities?

Jost: The biggest eye-opener for most executives is the realization that their ‘personal’ risk appetite is far less internal or ‘strategic’ than they think. We often like to believe that our risk tolerance is a stable personality trait or a result of years of professional expertise. However, this is just partially the case. Research shows that our judgment is profoundly and subconsciously ‘imprinted’ by the external environment we lived through during our formative professional years.

For example, studies have shown that CEOs who began their careers during a severe economic crisis or a market crash, we sometimes call this ‘Depression Babies’ in research, carry a more conservative risk appetite for the rest of their lives. They are less likely to take on debt and more likely to hold higher cash reserves, even decades after the crisis has passed. Conversely, those who ‘grew up’ during a bull market tend to be systematically over-optimistic. These external influences have therefore a real impact on strategic decisions and company performance.

Julia, as a risk management researcher and consultant at VU, you combine academic knowledge with years of practical experience in recognizing behavioral risks at organizations and translating them into concrete interventions. What is a persistent blind spot you repeatedly encounter?

Julia: The blind spot I encounter most often is what I call “the illusion of the framework.” Organizations invest heavily in risk models, governance structures, and three-lines-of-defense architectures, and over time, the existence of the framework becomes confused with actually managing risk. I’ve seen enough beautifully crafted risk appetite statements, the risk register was immaculately maintained, and yet nobody in the room could tell what actually kept them awake at night. The framework had become a comfort blanket. You tick the box, the regulator is satisfied, audit signs off. But meanwhile, the real risks live in the corridors, not in the register. In my experience, the most dangerous moment for an organization is not when the framework fails, but when everyone believes it’s working perfectly.

And this connects directly to what Jost described. If you combine an unexamined risk appetite shaped by formative experiences with an over-reliance on formal structures, you get a leadership team that is essentially managing yesterday’s risks with yesterday’s judgment, while being convinced they’re in full control.

You are both Co-Directors of the Risk and Crisis Management Knowledge Hub at VU. What core beliefs and ideas underpin this hub?

Julia & Jost: At the heart of our Hub are three fundamental beliefs that challenge the traditional, often siloed, approach to risk management:
First, organizations often treat risk as a technical problem and focus on better models, more data, and stricter rules. We believe that the most catastrophic risks don’t live in the models, but in the judgment and behavior of people. Thus, understanding the human side is just as important as understanding a risk model.
Second, there is often a disconnect between academic research on decision-making and the high-pressure reality of the boardroom. The Hub exists to bridge this gap. We believe that academic research and practitioner experience must be applied simultaneously.
Third, a perfect risk model is useless if the culture prevents people from speaking up. We believe that the risk culture of an organization is the ultimate safety net. Our Hub promotes the idea that true resilience isn’t about avoiding all errors, but about creating a culture where ’the silent dissenter’ is empowered and where leaders understand how their own past experiences influence their risk appetite.

You complement each other: Jost brings leadership and management academic knowledge, Julia brings years of field experience. How does that complementarity play out during the training, and how do participants experience the way you reinforce each other?

Julia & Jost: In the training, our complementarity plays out as a continuous loop between the why and the how. Jost provides scientifically proven frameworks that explain the ‘hidden’ mechanics of their decision-making. He ensures that what we teach isn’t just an opinion, but grounded in rigorous cognitive and organizational science.

Julia provides the “reality check.” She translates those abstract frameworks into concrete, high-stakes actions, bringing the field experience that ensures the theory survives the pressure of a real boardroom.
And no, we don’t always agree. We sometimes even “spar” during the session, but participants see this as a major benefit. It demonstrates that risk management isn’t a static checklist; it’s a living debate. This healthy tension ensures we hold each other accountable for both the academic integrity and the practical value of the tools we provide. We make sure participants leave with insights they can apply at their desk the very next morning.

You start the training by mapping participants’ risk identities and decision styles (guardian vs. catalyst; gut feel vs. models). Why did you decide to open the session this way? What does it unlock for the rest of the day?

Jost & Julia: We start this way because you cannot manage risk effectively until you understand the “human lens” you are viewing it through. Most executives believe their risk decisions are purely data-driven, but they are actually filtered through their professional identity and environmental imprinting.
By mapping the room, we make the invisible visible. It unlocks a level of radical honesty that you rarely find in business. It forces participants to confront a simple but uncomfortable question: “Is my risk assessment based on the facts, or is it just a reflection of my role?” This opening creates the necessary self-awareness for the rest of the day. Once a leader realizes that their “gut” or their “model” is a biased instrument, they stop defending their position and start investigating their judgment.

The Risk Triple Loop Framework serves as the diagnostic lens throughout the training. What makes this framework different from the classical risk models participants already know and use?

Jost & Julia: The classical risk models that participants use daily are excellent at identifying loop 1 failures; the technical ‘what went wrong’ with the math, the data, or the process. But as we’ve seen in many major financial collapses of the last decade, the models were often technically “correct” while the organization was heading for a cliff.

What makes the risk triple loop different is that it doesn’t just look at the error; it looks at the entire ecosystem of judgment that allowed the error to happen. We force leaders to look at the cognitive loop (loop 2). For instance, how their own biases and ‘imprinted’ experiences distort the data. They also look at the cultural loop (loop 3). For instance, how the power dynamics in their boardroom actually silence the truth. We think this adds a clear benefit over other established models. We want to give participants the language to identify and address more than just technical risks.

The adversarial AI simulation is trained using input from participants’ own discussions during the session. What does it add to practice against a system that deliberately pushes back?

Jost & Julia: In most training sessions, you discuss a theory and then go home. In our training, we believe that insight without practice is useless. The Adversarial AI Simulation is our ultimate bridge to the “next morning.” By training an AI on the actual cultural dilemmas discussed in the room, we create a “digital mirror” of their own organizations. We believe it adds three critical dimensions to the learning: First, traditional role-playing with a colleague is often too “polite.” The AI, however, is programmed to be a “biased CEO” who won’t be easily moved. It forces participants to experience the actual frustration.
Second, it provides a safe, low-stakes environment to test responses. If a participant tries to use raw data and the AI pushes back, they can “tag-team” a peer to try a different psychological tactic and see the impact in real-time.

Third, it’s one thing to understand loop 2 (cognitive bias) intellectually; it’s quite another to have to “de-bias” a stubborn stakeholder who is suffering from it. The simulation proves that risk management isn’t just about being right, but about being effective.

The training closes with a premortem for participants’ own organizations. What is the difference between a premortem and a classical risk analysis? And why is this exercise a powerful way to end the session?

Jost & Julia: The fundamental difference lies in the direction of the imagination. A classical risk analysis normally asks: ‘What might go wrong?’ This often leads to a “checkbox” mentality where teams list manageable risks they feel they can control. A pre-mortem flips the script. We ask participants to fast-forward to 2027 and assume the organization has already failed. We then ask why it failed. By making failure the starting assumption, we remove the social stigma of being a “negative” person. It gives everyone permission to speak the uncomfortable truth.

Why is it so critical for mid-level and senior risk professionals to become aware of their blind spots, both in themselves and in their organizations? Put differently: what is at stake if they don’t?

Jost & Julia: For mid-level and senior risk professionals, blind spots aren’t just “limitations.” They are structural weaknesses in the firm’s defense. At this level of seniority, the “technical loop” (models and math) is rarely where the ship sinks. The catastrophe almost always originates in the cognitive and cultural loops (the human elements). If you don’t map your blind spots, you are essentially flying a high-performance aircraft with a cracked windshield. You might feel in control, but you aren’t seeing the obstacle that will actually bring you down. In finance, what you don’t see doesn’t just hurt you. It can destroy capital, reputations, and institutional trust.

When experienced risk managers don’t recognize their own biases, what’s actually at stake for their organization?

Jost & Julia: When senior risk managers ignore their own biases, they don’t just miss a “red flag,” but they may break a line of defense in their organization. Risk managers are often the final filter for the truth. If that filter is clogged with unexamined bias, the decision-making ecosystem in the organization may be hurt.