Reliability engineers often struggle with the concept of risk appetite and how it impacts decision making. The long answer is that risk appetite is real and has been recognized by decision analysis academics and gurus over the past fifty years. The shorter, more practical answer is that risk appetite exists in every organization, but it is more implicit than explicit. Context (timing and position) significantly affects risk appetite.

My appetite is often driven by what I ate recently, who else is sharing the meal, and who is doing the cooking. But then, some days I want chicken and some days I want steak.

Risk Defined

Colloquially and according to most dictionaries, risk is defined as “the possibility of loss or injury; peril” (Merriam-Webster).