I read a recent post on LinkedIn (now deleted, fortunately) that asserted that the job of the risk manager is to quantify every risk. Of course I replied that their job is to help the organization and its leaders succeed by helping them get the right information at the right time to make the right decisions.
But there are some who talk as if the only and mandatory way to assess risk is through quantification, and they spend a lot of time talking about the mathematics involved.
Think about it. Do we need to quantify every risk in our professional and personal lives?
OK, time’s up. You took too long to think about it, as we more often than not don’t have the time we might like to be precise about the “value” of a source of risk.
We need to make a decision, often before related risks can be quantified.
Think about that. Time’s up!
Imagine you are driving your partner’s car at 35 mph down a fairly narrow road when a massive boulder rolls down the hill and stops in the middle of the road.
You have four choices:
- Slam on the brakes and pray (literally) that you will stop safely.
- Try to avoid the rock on the right (and pray).
- Try to avoid the rock on the left. (OK, pray.)
- Pray that you can survive by driving through the rock.
Do you quantify the risk under each option? Of course not.
Later, you are…
