The greater the control you have over risk, the more finely you can judge the risk, and the more money you can make. But, how much control do you have – can you have?
When IT execs talk about big data, they say they have to start with baby steps; they have to get buy in from many areas of the organization. Here are some of their tips for getting both IT and executives on board with analytics implementations and data governance policies that will help the organization make the most of data.
The most creative thinkers may not be the best choices for high organizational rank — in fact; there is often a conflict between the intuitive leaps that underlie attractive risks and the meticulous attention to process necessary for a large organization to remain organized. An important function of a risk manager is to give permission to fail, which is the only way an organization can succeed.
The words “risk management” usually evoke less subjective, more data-driven pursuits. But data and objectivity can only get you so far. To navigate unquantifiable hazards, your risk management team must make judgment calls – calls that are in jeopardy if all of the team’s viewpoints aren’t considered.
How can a CEO influence staff to do the right thing consistently? Safeway has created an environment where its employees are given incentives for managing risk – being risk managers.
Companies differ enough from hives that we’ll probably never be able to do without regulation. Managing for practical scale, long-term success, distributed decision making, diversity and least worst outcomes may be the best hope for keeping organizations healthy.
Risk management predicated on a mix of standardized risk tracking and cultural norms falls short. The only way for risky behavior to create value is if it is logically and precisely directed.
In the past decade, there have been numerous examples of organizations being toppled by a slow progression of risks that add up to big trouble. The reason, according to Dylan Evans, is that people have difficulty dealing with small differences in probability. The key trusting you risk management to analytics, not gut feeling.
The University of California has a unique risk management strategy: The Chief Risk Officer gives employees organization wide the tools to manage their own risks. Over the last six years, the program has saved the university more than $500 million.
Carol Dweck has researched people’s behavior. She says that business leaders who take unusual and unwise risks often share what she calls a “fixed” rather than “growth” mindset. Those with a fixed mindset think they’re infallible and want to show that they’re superior. This mindset can result in a skewed appetite for risk.