Risk

Lehman Brothers couldn’t manage risk properly because its risk management functions were buried in corporate hierarchy. Make no mistake: the team’s risk assessments were not incorrect because they disregarded the idea of risk management entirely—in fact, Lehman Brothers had several formal mechanisms to Detect, Assess, and Respond to risk—they were

It is more an exercise in self-reflection and disciplined thinking, a unique approach to keeping risk fit and creating resilience throughout an organization.

Action and other Risk Control Factors are invariably interconnected. For example, communication is often necessary to act, while narrative and bias either enable or inhibit our ability to act effectively. It’s a complex system, but ultimately, if we can’t overcome our coefficient of friction, the gears won’t turn.

Another way to think of the Risk Immune System is like a series of interconnected dials, or gears, where the movement of one affects the shifting of all. Leadership is the wrench that orchestrates everything.

SYMPTOMS OF PROBLEMS IN THE MAN/MACHINE RELATIONSHIP Who’s in Charge? There is a lack of clarity in whether man or machine is actually making key decisions. Lieutenant Colonel Petrov’s case illustrates the malady. Unintended/Unknown Dependence. An organization is unpleasantly surprised at a critical moment to find itself dependent on technology tha

SYMPTOMS OF TIMING CHALLENGES Hurry Up and Wait. Poorly timed decisions can often cause some parts of the plan to be rushed, and others to be painfully delayed. Undercooked Cake. Taking a cake out of the oven too early means a soggy, unappetizing mess. Cutting corners and speeding up processes can compromise the end result. Jumping the Gun. Sprinte

We tend to look for leaders to provide something few ever really could—salvation from the things that threaten us. But the more constructive analysis would be to acknowledge that the real requirement in the people who lead us is not status but actual leadership, or the ability to effectively oversee the multidimensional Risk Control Factors—to turn

Soldiers and athletes know from experience that the most dangerous opponent is one who lost the last contest but has the humility to learn why—and the discipline to correct their weaknesses.

we do have dominion over ten key dimensions that we can adjust at any given time to take control over our response: communication, narrative, structure, technology, diversity, bias, action, timing, adaptability, and leadership.