March 2018
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“You’re Not Getting a New Bike”

Answers to questions you haven’t asked can speak volumes
I live in the middle of Copenhagen, where the best way to get from A to B is on a bike. A few years ago, I bought a new bicycle. A month later I was outside the shop asking the owner why the rear brake had gouged the frame.
“I don’t know”, [...]

Of Course You Can Trust Me

Probability vs. Vulnerability or “What if I trust you, but shouldn’t have?

Danish Amagerbanken went bust on Sunday, which is a drag. Their shareholders feel betrayed, as do their customers, and given that the regulators said it was stable, so should the rest of us. After all, if you can’t trust a Scandinavian bank regulator, who can [...]

Let’s say the Euro does crack up… what’s in it for me?

What would a potential or even worst case scenario look like for the PIIGS?

There is no shortage of people willing to speculate on whether or not the Euro will survive or the fates of various indebted member countries, but surprisingly little talk of what a break up or default would look like. Adjectives like “bad” and [...]

Case - Assessing Supplier Risk

Assessing Vulnerability vs. Probability

A small technology company was on the verge of major success. They had created a superb product that outclassed the competition. A prestigious customer had placed a major order. The order had been big enough to fund the establishment of supply networks and start production without the need to raise more capital. The [...]

Case – Probability vs. Vulnerability (Processes)

At the prompting of their board, a small investment company managing a large amount of money hired a consultant firm to review their processes. The consultants immediately uncovered that there were no formal processes, nor a concern about their absence. The dozen or so employees knew their jobs, knew who was responsible [...]

Case – Probability vs. Vulnerability

A small investment firm completely reliant on the internet to do all of their trading thought they had planned for sufficient redundancy by securing three separate means of access to the internet. One day all three failed. The manager responsible defended himself claiming he had done all that could reasonably be expected. Two back-ups to the [...]

Probability vs. Vulnerability

Traditionally, risk is measured by weighing effect and probability. The general view on this is changing. Effect is still measured in terms of how much damage the risk will cause if it occurs, but now probability is being replaced by vulnerability.

Probability is being criticized for only looking backwards, for measuring the odds something bad will happen [...]