Tag: risk control

decision making, uncertainty

Challenging Cassandra – The two risks of predictions in uncertainty

We live in a time of great uncertainty, where many predictions and strongly held beliefs have been brutally disproved by the facts, especially in the last three years. And yet, we continue to make predictions. This seems rational: we want to protect ourselves against bad surprises and prepare for the worst. But this preparation comes at a significant cost.

(more…)
entrepreneurship

The Three Principles that Entrepreneurs Use to Control their Risk

How do entrepreneurs manage risk? A persistent and widely shared belief is that entrepreneurs are risk seekers; that they like taking risk. Ask anyone in the street or in a classroom, and they will tell you, “An entrepreneur is someone who is courageous, who likes to take risks.” But nothing could be further from the truth. Entrepreneurs don’t like risk; no study has ever shown that. What studies show is that while entrepreneurs are willing to take risks, because they recognize that it is necessary, they try to control them. To do that, they use three principles that are at the core of the entrepreneurial theory called effectuation, proposed twenty years ago by Darden professor Saras Sarasvathy.

(more…)