Preparing for the Unexpected The Failure of Risk Management: Why It's Broken and How to Fix It
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Sep 14, 2023 Douglas Hubbard, author of 'The Failure of Risk Management: Why It's Broken and How to Fix it,' discusses the challenge with Risk Assessments, problems with the traditional risk matrix, analysis placebo, using information incorrectly, risk and impact, risk neutrality, value statistical life, and tips to improve current risk practices.
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Weak Risk Management
- Weak risk management is the biggest organizational risk.
- Flawed assessments affect all risk decisions.
Quantify Probability
- Use quantifiable probabilities instead of qualitative scales like "unlikely."
- Define probability as a percentage chance per year.
Qualitative Scales Add Error
- Qualitative scales add errors to risk assessments and create an illusion of agreement.
- Research shows that these scales can be worse than useless.