Essay

Distortions and deceptions in strategic decisions

Source McKinsey Quarterly, by Dan P. Lovallo and Olivier Sibony. Companies are vulnerable to misconceptions, biases, and plain old lies. But not hopelessly vulnerable. The chief executive of a large multinational was trying to decide whether to undertake an enormous merger—one that would not only change the direction of his company but also transform its whole industry. He had gathered his top team for a final discussion… Errors in strategic decision making can arise from the cognitive biases we all have […]

Strategic Disaster Planning

Source: ICMA. Those who work with communities in the aftermath of natural disasters see the importance of advance planning firsthand. Disaster plans save time, money, headaches and, ultimately, they can save lives. In short, planning makes disasters less disastrous. And yet, it can be difficult for communities to prioritize disaster planning, particularly for those with limited time, budget, or staff. These communities can also be hit the hardest when a disaster does strike. One of the biggest challenges we see […]

Climate change: global reshuffle of wildlife will have huge impacts on humanity

Source: The Guardian. Mass migration of species to cooler climes has profound implications for society, pushing disease-carrying insects, crop pests and crucial pollinators into new areas, says international team of scientists. Global warming is reshuffling the ranges of animals and plants around the world with profound consequences for humanity, according to a major new analysis. Rising temperatures on land and sea are increasingly forcing species to migrate to cooler climes, pushing disease-carrying insects into new areas, moving the pests that attack […]

The evolution of model risk management

By Ignacio Crespo, Pankaj Kumar, Peter Noteboom, and Marc Taymans. McKinsey&Company An increasing reliance on models, regulatory challenges, and talent scarcity is driving banks toward a model risk management organization that is both more effective and value-centric. The number of models is rising dramatically—10 to 25 percent annually at large institutions—as banks utilize models for an ever-widening scope of decision making. More complex models are being created with advanced-analytics techniques, such as machine learning, to achieve higher performance standards. A typical […]

The Risk of Leadership

A plea for a new search for modern leadership. By Jack Kruf Yes, we have our democratic system as a great set of principles and values for good public governance. Public leadership is embedded in this, at least it should be. You may expect excellent results, because the democratic system traces back to the Greek δημοκρατία 508 BC. From there it developed until now, anno 2017. Considering the state of society and natural ecosystems you may expected more of 2525 […]

Nonfinancial risk today: getting risk and the business aligned

By Joseba Eceiza, Piotr Kaminski and Thomas Poppensieker, McKinsey&Company. Ask senior managers at any company if they have nonfinancial risk under control, and the answer is likely to be yes. But as managers of companies in automotive, banking, oil and gas, pharmaceuticals and many other sectors can attest, the reality is often very different. And as personal liability for corporate actions takes hold, board members—both executive and nonexecutive—are on the hook not just for their personal involvement in risk- and compliance-related […]

Good Government and Coordination

By Jack Kruf. The painting in the Town Hall of the City (and from Republic) of Siena is called The Allegory of Good and Bad Government. It is a series of three fresco panels painted in the Sala Dei Nove by Ambrogio Lorenzetti in 1338/1339. The series consists of six different scenes: Allegory of Good Government, Allegory of Bad Government, Effects of Bad Government in the City, Effects of Bad Government in the Country, Effects of Good Government in the City and Effects of Good Government in the Country.  The only way to get […]

Strategic decisions: When can you trust your gut?

Source: McKinsey Quaterly. A classic article from 2010: “Nobel laureate Daniel Kahneman and psychologist Gary Klein debate the power and perils of intuition for senior executives. For two scholars representing opposing schools of thought, Daniel Kahneman and Gary Klein find a surprising amount of common ground. Kahneman, a psychologist, won the Nobel Prize in economics in 2002 for prospect theory, which helps explain the sometimes counterintuitive choices people make under uncertainty. Klein, a senior scientist at MacroCognition, has focused on the power […]

EU Migration Crisis Update

According PRIMO one of the main public risks is  – caused by the way we manage the migrants in a very slow and non-systemic way – the harm we do to the resilience and self respect of individual humans and their integration in public society. This update by Medecins Sans Frontiers (MSF) is an impressive and in depth story of ourselves. It proofs once again that risk management is still lacking momentum and is considered mainly from a higher ground perspective. Still public […]

Myopic Voters and Natural Disaster Policy

In our democratic system citizens vote for their representative politicians, elected councils as well their public leaders, governors and governing councils. But what about the perception by citizens of how risks are handled by their leaders and what about citizen’s appreciation of proactive thinking by councillors related to public risks when it comes to voting. This article, published in 2009, is very noteworthy and actual. It gives insight in the beating heart of our democratic system related to preventing and handling of risks. […]

Creating Public Value

By John O’Dea* Public value is defined as “using government assets to produce a good and just society”. The term was first mooted in 1995 by Mark H. Moore – Hauser Professor of Non-Profit Organisations at the Harvard Kennedy School of Government – in his book Creating Public Value (Harvard University Press). Public value in public sector management is the equivalent of shareholder value in private sector organisations. Shareholder value is a business term which implies that the ultimate measure […]

Why Do We Change Our Avatars After Tragedy?

The New Yorker, Vinson Cunningham | 11 December 2015 There seems to be no such thing, anymore, as a pause between sadnesses. Before one occasion for worldwide shock, or pity, or horror, or shame, has a chance to subside, another comes stepping on its heels. The reasons for this sense aren’t totally clear, but they might include the unstoppable velocity of news from all corners of the globe (a blessing that will forever remain mixed); a nostalgia for times that […]

The strategic importance of risk managing the supply chain

Risk managers should keep a handle on their supplier relationships as this can lead to significant gains. The corporate risks posed by a potential supply chain failure are leading more risk managers to keep a close handle on their supplier relationships and they are finding, in some instances, that significant gains can be made in the process. The latest spate of negative headlines about UK-based corporates that have been found wanting in their governance of suppliers or have suffered operational […]

The development of Cyber Insurance

Cyber Risk & Insurance Forum (CRIF) “In Boardrooms around the world cyber insurance is an important subject that is gaining in profile and importance. In this article Daljitt Barn, Cyber Director of PwC, looks at the how the Cyber Insurance Sector has evolved over the past four years and what the next few years may bring. For purists out there, I acknowledge that what might be termed Cyber Insurance has been around as a specialty line for some years. More recently […]

La collectivité dans la Troisième Révolution Industrielle

3 mars, 2015, PRIMO France Vers une nouvelle revolution industrielle La Première Révolution Industrielle naît de technologies mécaniques utilisant la vapeur d’eau comme force motrice, permettant l’essor de transports rapides et augmentant la vitesse de communication tout en réduisant les coûts d’impression. Locomotives, presses rotatives et linotypes sont quelques-uns des outils mis à disposition, et ont favorisé l’alphabétisation de masse et la communication, en convergence avec une volonté politique d’enseignement public. Tout ceci contribue à faire émerger une main d’œuvre […]

Renewing PP-Partnership

By Eulalio Avila Cano  & Rainier D-Haussonville. Infrastructure investment needs in Europe are driven by consumer trends and expectations, climate and resources pressures as well as the need to meet the requirements and objectives of an evolving European regulatory framework. It is paramount that the current economic circumstances and generalized public budgetary constraints do not take their toll on implementations and pace of those much needed investments. This requires an optimization of the use of public resources and innovation in […]

Public Values and Risks

By Jack Kruf. From the many meetings with public leaders and city managers in the last five years emerged a personal (growing) conviction that the interpretations and definitions of the terms ‘public value’ and hereto related ‘public risk’  have become highly diversified. This diversification makes a sharp and focused dialogue between institutions (business, media, non-profit, government and science) in the public domain – society and the natural environment as a whole – more difficult than necessary. The reasons for this […]

10 Ways to improve risk management

Door Marinus de Pooter. With an awareness of common shortcomings, internal auditors can help their organization better meet stakeholder expectations and ensure business objectives are achieved. Why do risk management implementations and functions often fail to deliver what is expected? And what causes senior management to feel that its investments in risk management systems are not delivering the expected returns? Many factors, potentially, are to blame, stemming from various parts of the organization and its systems. But most often, the culprits come down to a handful of common dysfunctions. Ten key practices, in […]

Nuclear Energy, Risk, and Emotions

 By Prof.dr. Sabine Roeser * The pictures of the nuclear disaster in Fukushima are in our minds and are updated daily. People from around the world feel compassion for the Japanese, who have had to cope with a triple disaster: earthquake, tsunami, and nuclear accident. At the moment of writing this piece, it is far from clear how the latter of this apocalyptic triad will end. In the meantime, the debate about nuclear energy has taken an unexpected turn. In the […]

10 Ways to improve risk management

Door* Marinus de Pooter** With an awareness of common shortcomings, internal auditors can help their organization better meet stakeholder expectations and ensure business objectives are achieved. Why do risk management implementations and functions often fail to deliver what is expected? And what causes senior management to feel that its investments in risk management systems are not delivering the expected returns? Many factors, potentially, are to blame, stemming from various parts of the organization and its systems. But most often, the culprits come down to a handful of common dysfunctions. Ten key practices, in […]

Innovation Risk: How to Make Smarter Decisions

By Robert Carhart Merton for Harvard Business Review New products and services are created to enable people to do tasks better than they previously could, or to do things that they couldn’t before. But innovations also carry risks. Just how risky an innovation proves to be depends in great measure on the choices people make in using it. Ask yourself this: If you had to drive from Boston to New York in a snowstorm, would you feel safer in a car […]