risk informed decision making

Retooling: Applying Problem Definition Process to Risk & Opportunity Management

By Carol Williams / May 12, 2021 /

In the manufacturing world, retooling machinery for a different purpose is a common practice. Once a machine becomes worn out, obsolete, or the product is no longer in demand, engineers can modify the equipment for another purpose and thus save the company tens of thousands, even millions of dollars. The best example of this on…

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Risk Appetite and Risk Tolerance – Which Definitions Do You Use?

By Carol Williams / May 5, 2021 /

In follow up to our recent article on handling risks that exceed the company’s appetite, we would like to share this perspective from our friend Hans Læssøe on this complex and controversial topic. Hans’ article below describes how the world’s leading risk management standards, COSO and ISO 31000, have differing definitions on risk appetite and…

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3 Steps to Handling Risks that Exceed your Company’s Appetite

By Carol Williams / April 14, 2021 /

As I and others repeat often, it is impossible to manage every risk. Doing so is counterproductive and leads to even more problems than it solves, including preventing your organization from achieving its goals and objectives. Here is the truth: life is about choices and resources (time, financial, etc.) are scarce. Risks are no different.…

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ERM for Small and Midsize Business: It’s Just NOT the Same

By Carol Williams / March 9, 2021 /

We’ve all heard it from politicians and the press, but it’s true – small and midsize business (SMB) constitutes the lion’s share of the economy. They account for 64% of new jobs created in the U.S. and over 90% of the “business population” according to this report. Gartner defines small businesses as those firms with…

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Performance-Focused Risk Management: Tying It All Together

By Carol Williams / February 16, 2021 /

Today’s article is a reprint of the last of four guest editorials originally published in The Demotech Difference, a journal targeting small- to midsize property and casualty insurance companies. The first three articles in the series delved into the foundations of building a performance-focused risk management process, specifically the importance of culture, identifying the company’s…

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29 Biases and Traps that Prevent Good Decision-Making

By Carol Williams / January 27, 2021 /

It seems like bias is everywhere in our world… Some bias is healthy and normal. We may have a bias for or against a certain sports team or those of us who are parents will naturally be biased toward our children. But when it comes to decision-making in our organizations, bias can lead to putting…

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Will Inflation be a Gray-Rhino in 2021?

By Carol Williams / January 11, 2021 /

Soon after COVID-19 began affecting the U.S. last March, I spotted a brief article on LinkedIn from Hans Læssøe explaining how the pandemic was not a “black swan” event as some were saying but rather a “gray-rhino.” As you may know, a “black swan” is an unforeseen, improbable event, be it positive or negative, which…

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Top 21 Risk Management (…and Other) Resources for 2021

By Carol Williams / January 3, 2021 /

Happy New Year!! As of this writing, the year 2020 is officially in the rearview mirror. Suffice it to say that between the COVID pandemic, a contentious election year here in the U.S., a record-breaking hurricane season, and other challenges, we are all glad to bid the past year farewell. Personally, the year had its…

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visual aids

Harnessing the Power of Visual Aids to Prompt Robust Risk Conversations

By Carol Williams / December 17, 2020 /

There’s a good chance – 65% in fact – that you are a visual learner. I personally put myself in this category. Rather than reading text or listening to instructions, I always perform better and remember more through visual aids, especially on a subject I’m not familiar with. Numerous research studies back up my personal…

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ERM best practices

Why Following ERM Best Practices Can Do More Harm than Good

By Carol Williams / December 10, 2020 /

Woven into many of my posts from the last 4+ years is the advice that ERM best practices should be approached with caution. While the updated COSO and ISO 31000 standards can be great starting points for some organizations, simply copying another organization’s policies and practices comes with many drawbacks that will eventually become painful.…

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