Скачать или смотреть CRO DIARIES - Episode 8 Risk Management and Decision-Making

💡 The speaker believes that trying to make everyone happy is not feasible and that risk management has two separate audiences with conflicting objectives.
💡 Risk management involves considering the potential changes in underlying assumptions and how the world may behave differently from the original decision or plan.
📊 Risk management adds volatility to assumptions made by management, allowing for a more realistic view of the future in business planning and decision-making.
💡 By considering both positive and negative scenarios in their initial model and simulating the outcomes, managers can gain a full distribution of potential future outcomes, allowing for better decision-making and risk mitigation.
📊 The efficient frontier diagram can help identify bad choices with significant risks and low rewards, allowing for better decision-making.
🧠 The link between decision-making and bonuses in long-term incentive plans is significant, as shown in the field of neuroeconomics.
📊 Identifying and questioning assumptions is crucial in risk analysis and decision-making, as many decision-makers are unaware of the assumptions made in strategies and business plans.
💡 The speaker suggests that risk managers should focus more on risk management 2, which involves decision science, mathematics, statistics, and modeling, as it is more valuable and enjoyable, while risk management 1 is often just window-dressing and a waste of time.
🤔 "You have to be a special kind of ignorant person to think that you can represent risk as a single number."
Implications of the Coronavirus on Business

🦠 Depending on the type of business, the coronavirus can potentially have huge implications, especially for businesses that rely on imports or exports to China, transportation routes, suppliers from China, or require a lot of travel.

Proper risk analysis and integration into decision-making processes and business plans is crucial for effective risk management and business success.

00:00 📊 Proper risk analysis in decision-making provides more value to the business, but the speaker faced resistance from auditors and consultants who preferred a less effective traditional approach, leading to a question of merging risk analysis and satisfying all stakeholders.
09:02 📊 A scoring methodology is more helpful than a heat map or simulation for making important investments and decisions, and it is important to provide concise and insightful information to management and regulators, integrate risk management into business objectives, and address different expectations and approaches.
15:33 📊 Non-financial companies don't need a risk appetite statement, but should integrate risk analysis into business plans and consider the potential effects of changing assumptions in decision-making processes to better understand the chances of success and mitigate risks in investment projects.
25:50 📊 Applying quantitative risk analysis allows for better decision-making by understanding a business's operations, while understanding and reducing uncertainty is crucial in risk management and decision-making.
32:48 💡 Bonuses drive human behavior and it is crucial to question assumptions and consider the volatility of projections in order to conduct proper risk analysis.
38:29 📊 Establishing sound assumptions and correlations is crucial for business planning, with different priorities between management and external stakeholders, and the goal should be to prioritize decision science and modeling in risk management.
43:32 📊 Business plans for 2020 should consider the impact of the coronavirus on imports, exports, transportation, and travel; risk managers lack statistical skills and fail to understand uncertainty, hindering the use of advanced tools like Monte Carlo simulations and neural networks.
49:59 👉 Risk Academy YouTube channel has over 500 videos on various topics, including risk management, and the speaker encourages viewers to check out the Risk Awareness Week for insights from like-minded professionals on integrating risk into decision-making processes and business plans.