Coauthors Frederick Funston and Stephen Wagner ask this question early in their new book Surviving and Thriving in Uncertainty: Creating the Risk Intelligent Enterprise.
They pose the question in a chapter that describes why, and how coach bags, conventional risk management has failed.
Good stuff, and I hear that Full Disclosure blogger Eric Krell will soon post more on the book. ###
“The record of forecasting in business, investing, and economics is not good, particularly when it comes to crises, which are by definition improbable and, well, unpredictable,” Funston and Wagner write.
Substitute the word “company” for “species,” and you have a compelling argument for the coauthors’ concept of risk intelligence, which I think they would agree equates to being Future Ready.
Here’s another discussion I enjoyed: The coauthors cite Ashby’s Law of Requisite Variety to emphasize the importance of adaptability. The law essentially says that “the more finely adapted to a specific environment a species becomes, the more likely it is to be successful as long as its environment does not change,” Funston and Wagner write. “Conversely, such a species is more likely to fail if its environment changes suddenly.”
In other words, the failure of conventional forecasting is a prime reason why conventional risk management has failed.
Are (traditional) forecasts meaningful?
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