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Eat Your Vegetables

“Risk management is too negative. We’re focused on growing our business.”  – a startup CEO

A certain Captain Smith once entertained the same certainty about large pieces of ice at sea and ignored the potential effect. He was focused on getting to New York, but that focus didn’t help him much when he ran into trouble.

Preparation is [...]

“The Prospect of Hanging Concentrates the Mind…” – Samuel Johnson

Avon Barksdale on Managing Risk, Part Two

Avon Barksdale, the drug kingpin from HBO’s “The Wire“, was a man of many precautions, because his life and his freedom depended on them. Managing his risks effectively kept him free and alive – and enabled him to build an empire that made him fabulously wealthy.

Do not ignore failure

Most of us can limit [...]

Strange Notions

 
Sometimes our faith in an idea is wierd
My grandmother was a cultivated woman of many opinions, most of them strongly held, and some of them distinctly unusual. For many years she insisted on watching TV in the dark while wearing sunglasses. She kept her TV in the dining room for almost as many years and so she would sit at the [...]

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 [...]

Hvilket billede tegner dine risici?

Uddrag fra 3. opdatering 2010 af Børsens Ledelseshåndbog Krise- og risikostyring

Hvordan dine risici udvikler sig er vigtigt – og ofte overset

Det er som bekendt svært at spå om fremtiden, men vi er nødt til at gætte. Forudsigelse har altid været en svær kunst, og det er ofte vanskeligt at anvende resultatet. Som målmand er det én [...]

The Yoko Ono Factor

Tool: Dealing with the fact that nothing lasts forever

Two weeks ago, I spoke with a start up team that had just lost a team member and was in the dumps. Starting a business is tough and having someone leave was hard on those that stayed. They are not the first firm to experience it and they [...]

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 [...]

Who’s in The Crow’s Nest?

“Right now, we don’t have an entity, an oversight entity, a government entity, that thinks to itself: What happens if this institution gets into trouble and is going to fail? What would we do about it at that time? The primary focus of most supervision is to prevent them from getting into trouble…”

Ron Feldman [...]

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 [...]