I always find articles by McKinsey worth reading – and I strongly recommend subscribing.
One that merits our attention is Managing the Future: Dynamic Risk Management for Uncertain Times.
It has one major flaw that I will mention and then we will look past: it imagines risk management as something you do to avoid failure rather than achieve success. It only considers downside risks and ignores upside opportunities. It certainly doesn’t help you determine which risks to take!
The minor flaw is that all times are uncertain!
Having said that, here are some interesting comments from the paper:
- The digital revolution has increased the availability of data, degree of connectivity, and speed at which decisions are made. Those changes offer transformational promise but also come with the potential for large-scale failure and security breaches, together with a rapid cascading of consequences. At the same time, fueled by digital connectivity and social media, reputational damage can spark and spread quickly.
Comment: let’s not downplay the enormous upside, not only in detecting and addressing ‘risk’ but in upgrading processes and identifying and seizing opportunities.
Comment: the point about the speed of decision-making is very important. Information about what might happen (a) must be rapidly available,…
