Every so often, we hear about a military mission where something went wrong. The intelligence might have said, for example, that a targeted individual was thought to be in a certain location – so the military attacked that location but did not find the sought-after person.
In the same way, business leaders make decisions based (at least in part) on information about risks and opportunities.
If a risk assessment is unreliable, wrong decisions may be made with serious effects.
For example, if the risk is seen as ‘high’ that a competitor will shortly release an advanced version of a competitive product, the management team may decide to accelerate the launch of its own product even though its development team say they are not quite ready.
On the other hand, if the competitive product release risk is assessed as ‘low’, then management may wait and spend more time on product quality.
If the risk assessment is faulty and leads management to make the wrong decision, there may be severe damage.
Going to market too early with a less than perfect product can lead to customer dissatisfaction and longer-term revenue losses.
Going to market too late allows competitors to steal market share and for people to question the ability of the company to be a market-leader.
Are risk officers (CROs and their teams)…
