Risk to Return -- Why didn't we know?
 Business and markets continue to react to nasty surprises.
Supply chain disruptions, “unusual” trading events, natural disasters, civil
unrest, trading system outages, communications network failures, frauds and
more. After hundreds of years of risk management history, why are we so
surprised when a bad thing occurs? What root cause or early warning was missed?
Who knew before we knew and why?
What wasteful activities distract risk managers and business leaders to
managing real risk to return in the real work?
Most importantly,
why do enterprises sadly miss the opportunity to earn more
risk-adjusted return?
These weaknesses in risk management apply whether
evaluating the purchase of a share of stock in an individual company, the market
for those shares or a broader view of the economy.
Failure to Act
People, good people, fail to
act when they don't feel the full pain of the sickness, or feel the cure is
worse or too costly. In risk management, this means not fully
understanding risk faced or the response. This is a tragedy in
itself and opens the door to disaster.
Learning from across time, industries and
professions
Yes, we have decades and centuries of experience in risk
management – across professional disciplines and industries. Yet, individual
human beings are often too focused in their silos to draw on the wide range of
proven tools and methods. Further, the varying terminology and methods of
different disciplines often muddy the waters. This deprives them of the
opportunity to better understand risk in their piece of the system and to
understand how the risks in the rest of the system might affect their piece.
Shifting toward performance-oriented risk
management
Brian Barnier steps back to appreciate this diversity and
attempts to harmonize. In his writing, teaching and speaking, he reaches out to
help people become aware of the rich history of risk management disciplines and
apply that library to their individual situations to improve performance.
Performance is measured in profitable revenue in an
individual enterprise or in sustaining broader economic growth. His objective is
not only to help leaders improve, but also to guide them to improve more
efficiently -- to do “six months of work in six weeks.”
As a speaker, he is appreciated for his clarity, focus and
enthusiasm, motivating people to actions that produce results. |
