Monthly Archives: October 2009

NYPL, LIVE from the NYPL, Event Description

Shared by JohnH

This is a live event, Tuesday, November 3, 2009 at 7:00 PM. New York Public Library. 5th Ave. and 42nd St. Somebody please audio record this! (PS I can edit, compress and host audio file.)

The President of the Aspen Institute, Walter Isaacson joined by Niall Ferguson, author of The Ascent of Money, Indra Nooyi, Chairman and CEO of PepsiCo, Eric Schmidt, Chief Executive Officer of Google, and Nassim Taleb, scholar of randomness and risk and author of The Black Swantogether will examine:

What will the American economic system look like in the months and years ahead?

Who are the innovators currently shaping the future?

What will be the role of business in that future?

The Six Mistakes Executives Make in Risk Management –

Shared by JohnH

There’s a pay wall, or at least a login, but more than what I have here at the link above.

We don’t live in the world for which conventional risk-management textbooks prepare us. No forecasting model predicted the impact of the current economic crisis, and its consequences continue to take establishment economists and business academics by surprise. Moreover, as we all know, the crisis has been compounded by the banks’ so-called risk-management models, which increased their exposure to risk instead of limiting it and rendered the global economic system more fragile than ever.

Low-probability, high-impact events that are almost impossible to forecast—we call them Black Swan events—are increasingly dominating the environment. Because of the internet and globalization, the world has become a complex system, made up of a tangled web of relationships and other interdependent factors. Complexity not only increases the incidence of Black Swan events but also makes forecasting even ordinary events impossible. All we can predict is that companies that ignore Black Swan events will go under.

Instead of trying to anticipate low-probability, high-impact events, we should reduce our vulnerability to them. Risk management, we believe, should be about lessening the impact of what we don’t understand—not a futile attempt to develop sophisticated techniques and stories that perpetuate our illusions of being able to understand and predict the social and economic environment.

To change the way we think about risk, we must avoid making six mistakes.

1. We think we can manage risk by predicting extreme events.