Tag Archives: Risk management

In the face of uncertainty, be vulnerable

Decision-making in uncertainty is a difficult art. One of the reasons is that the tools and concepts we use are, for the most part, design for risk, i.e. for clearly defined and repeated situations. Such tools assume that uncertainty is something to protect against. This mental model of protection, which seems so logical, is in fact counterproductive. What if, on the contrary, we should not protect ourselves (too much) from uncertainty?

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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.

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My new Forbes Piece: 1962, The U2, and You: A Risk Management Lesson from the Cold War

My new Forbes piece shows that by looking at the origins of the Cuban Missile Crisis, one can learn valuable lessons on Risk management. Read it here.