The Failure of Risk Management: Why It's Broken and How to Fix It

Front Cover
John Wiley and Sons, Apr 6, 2009 - Business & Economics - 304 pages
An essential guide to the calibrated risk analysis approach

The Failure of Risk Management takes a close look at misused and misapplied basic analysis methods and shows how some of the most popular "risk management" methods are no better than astrology! Using examples from the 2008 credit crisis, natural disasters, outsourcing to China, engineering disasters, and more, Hubbard reveals critical flaws in risk management methods–and shows how all of these problems can be fixed. The solutions involve combinations of scientifically proven and frequently used methods from nuclear power, exploratory oil, and other areas of business and government. Finally, Hubbard explains how new forms of collaboration across all industries and government can improve risk management in every field.

Douglas W. Hubbard (Glen Ellyn, IL) is the inventor of Applied Information Economics (AIE) and the author of Wiley's How to Measure Anything: Finding the Value of Intangibles in Business (978-0-470-11012-6), the #1 bestseller in business math on Amazon. He has applied innovative risk assessment and risk management methods in government and corporations since 1994.

"Doug Hubbard, a recognized expert among experts in the field of risk management, covers the entire spectrum of risk management in this invaluable guide. There are specific value-added take aways in each chapter that are sure to enrich all readers including IT, business management, students, and academics alike"
—Peter Julian, former chief-information officer of the New York Metro Transit Authority. President of Alliance Group consulting

"In his trademark style, Doug asks the tough questions on risk management. A must-read not only for analysts, but also for the executive who is making critical business decisions."
—Jim Franklin, VP Enterprise Performance Management and General Manager, Crystal Ball Global Business Unit, Oracle Corporation.

From inside the book

Contents

Title Page
PART TWO Why Its Broken
A Very Short Introduction to Where Weve
How Do We Know What Works?
Some Mostly
PITCH CHANGED RISK MANAGEMENT
Fixing the Confusion about Risk
Why We Dont Know What
BUT NOT HERE
SURVEY OF MONTE CARLO USERS
WHERES THE SCIENCE? THE LACK OF EMPIRICISM IN RISK
The First Step Toward
DECOMPOSING RISK WITH MONTE
Adding Empirical Science
Intra and Extraorganizational Issues
INCENTIVES FOR A CALIBRATED CULTURE

OVERCONFIDENCE
The Most Popular Risk Assessment
HURT
Overcoming
APPENDIX Additional Calibration Tests and Answers
Index
Copyright

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About the author (2009)

Douglas W. Hubbard is the inventor of Applied Information Economics (AIE). He is an internationally recognized expert in the field of measuring intangibles, risks, and value, especially in IT value, and is a popular speaker at numerous conferences. He has written articles for InformationWeek, CIO Enterprise, and DBMS magazine. His AIE method has been applied to dozens of large Fortune 500 IT investments, military logistics, venture capital, aerospace, and environmental issues. Doug is the author of How to Measure Anything: Finding the Value of Intangibles in Business (Wiley).

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