Risk Evolves as Experience Evolves

Abstract

Most business leaders want to limit the shock of surprises and be prepared to act to avoid any crisis. There are a number of well-defined risk management methodologies that are used to define and judge possible risk scenarios. Some of the methodologies follow a scientific approach to identify possible interdependencies, while others aim to minimize the impact of a disaster on the system. To identify this impact and the probability of such an occurrence, statistical methods are typically used or sometimes decision makers guess based on past experiences. However, none of the common established business risk management practices incorporate analytical modeling and parameter analysis.

To win without risk is to triumph without glory.

—Pierre Corneille