"The decision which achieves organization objectives must be both (1) technologically sound and (2) carried out by people. If we lose sight of the second requirement or if we assume naively that people can be made to carry out whatever decisions are technically sound - we run the risk of decreasing rather than increasing the effectiveness of the organization." (Douglas McGregor, "The Human Side of Enterprise", 1960)
"But the greater the primary risk, the safer and more careful your secondary assumptions must be. A project is only as sound as its weakest assumption, or its largest uncertainty." (Robert Heller, "The Naked Manager: Games Executives Play", 1972)
"Management theory is obsessed with risks. Top executives bemoan the lack of risk-taking initiative among their young. Politicians and stockholders are advised (by directors) to make directors rich, so that they can afford to take risks. Theorists teach how to construct decision trees, heraldic devices of scientific management; and how to marry the trees with probability theory, so that the degree of risk along each branch (each branch and twig representing alternative results of alternative courses of action) can be metered. But the measuring is spurious, and, anyway, the best management doesn't take risks. It avoids them. It goes for the sure thing.
"Taking no action to solve these problems is equivalent of taking strong action. Every day of continued exponential growth brings the world system closer to the ultimate limits of that growth. A decision to do nothing is a decision to increase the risk of collapse." (Donella Meadows et al, "The Limits to Growth", 1972)
"Overly optimistic goals nearly always result in one of two extremes. If the goal is seen as a must, then the division manager must 'go for broke. This can result in reckless risk taking. More commonly [...] ultraconservative action. The reasoning is: "Why take any chances to achieve an unattainable goal."(Bruce Henderson, "Henderson on Corporate Strategy", 1979)
"Risk is a function of how poorly a strategy will perform if the 'wrong' scenario occurs." (Michael Porter, "Competitive Advantage: Creating and Sustaining Superior Performance", 1985)
"The risk of making a decision that's wrong is so enormous that sometimes it just crushes people so that they can't make any decision at all because they're afraid of making the wrong decision." (James M McPherson, "An Exchange With a Civil War Historian", 1995)
"Until we can distinguish between an event that is truly random and an event that is the result of cause and effect, we will never know whether what we see is what we'll get, nor how we got what we got. When we take a risk, we are betting on an outcome that will result from a decision we have made, though we do not know for certain what the outcome will be. The essence of risk management lies in maximizing the areas where we have some control over the outcome while minimizing the areas where we have absolutely no control over the outcome and the linkage between effect and cause is hidden from us."
"Risk management is the explicit quantitative declaration of uncertainty. But in some corporate cultures, people aren’t allowed to be uncertain. They’re allowed to be wrong, but they can’t be uncertain. They are obliged to look their bosses and clients in the face and lie rather than show uncertainty about outcomes. Uncertainty is for wimps.
"Risk mitigation is the set of actions you will take to reduce the impact of a risk should it materialize. There are two not-immediately-obvious aspects to risk mitigation: The plan has to precede materialization. Some of the mitigation activities must also precede materialization."
"According to the traditional distinction from economics, risk is measurable, whereas uncertainty is indefinite or incalculable. In truth, risk can never be measured precisely except in dice rolls and games of chance, called a priori probability. Risk can only be estimated from observations in the real world, but to do that, we need to take a sample, and estimate the underlying distribution. In a sense, our estimates of real-world volatility are themselves volatile. Failure to realize this fundamental untidiness of the real world is called the ludic fallacy from the Latin for games. […] However, when the term risk measurement is used as opposed to risk estimation, a degree of precision is suggested that is unrealistic, and the choice of language suggests that we know more than we do. Even the language 'risk management' implies we can do more than we can." (Paul Gibbons, "The Science of Successful Organizational Change", 2015)
"Change strategy is, by this definition, the way a business (1) manages the portfolio of change to make sure that the parts deliver the whole business strategy, (2) creates the context for change, and (3) monitors change risk and change performance across the entire business." (Paul Gibbons, "The Science of Successful Organizational Change", 2015)
"After you think, you act. After you act, you learn. Make decisions, but decisions will have risks of mistakes. But make sure you avoid disastrous mistakes and avoid making the same mistake twice." (Sukanto Tanoto, [Keynote speech] 2015)
"Governance and leadership are the yin and the yang of successful organisations. If you have leadership without governance you risk tyranny, fraud and personal fiefdoms. If you have governance without leadership you risk atrophy, bureaucracy and indifference." (Mark Goyder, "What Matters in Corporate Governance?", 2015)
"Our minds, especially our intuitions, are not equipped to deal with a probabilistic world. Risk and prediction are widely misunderstood, […] All decision making in a probabilistic world involves estimating the likelihood of an event and how much we will value it (affective forecasting). Humans are bad at both - particularly at the former. […] In business, understanding the psychology of risk is more important than understanding the mathematics of risk." (Paul Gibbons, "The Science of Successful Organizational Change", 2015)
"Often greater risk is involved in postponement than in making a wrong decision." (Harry A Hopf)
No comments:
Post a Comment