Surviving and Thriving in Uncertainty: Creating The Risk Intelligent Enterprise »

Frederick Funston is a principal with Deloitte & Touche LLP and has more than thirty years of experience working with leaders of numerous global companies. In 2000, Rick created the concept of risk intelligence for value creation and value protection. He is a frequent speaker and writer on leveraging risk intelligence for competitive advantage in complex, global organizations.

Stephen Wagner is a nationally recognized thought leader on corporate governance. In 2009, Steve retired as the managing partner of Deloitte LLP's Center for Corporate Governance, where he led the firm's integrated strategy for governance services. He is a frequent speaker at governance conferences and directors' colleges and has authored or contributed to numerous articles on governance and risk.

Why can't the cycle of scandal, speculation, greed, and recklessness be broken? With countless sums spent on enterprise risk management, why does it consistently fail at critical junctures? How can you hope to manage that? In a sense, you can't—not in the way you can manage a production facility or a sales force. Conventional risk management, though necessary, is concerned mainly with avoiding risk and protecting existing assets—and simply isn't enough for the survival of your organization.

Starting with a Foreword by the Honorable Tom Ridge—the nation's first Secretary of the Department of Homeland Security—Surviving and Thriving in Uncertainty: Creating the Risk Intelligent Enterprise reveals demonstrated methods you can use to help exercise better judgment and make better decisions under the most risky, uncertain, and turbulent conditions.

Based on their combined decades of experience as practitioners, consultants, and advisors to numerous business professionals throughout the world, recognized industry veterans and authors Frederick Funston and Stephen Wagner look at:

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  Perspectives of those who work in risk, from business directors and senior executives to combat pilots, first responders, race car drivers, and astronauts
  
  
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  How you can use risk management tools proactively instead of reactively to improve decision making
  
  
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  The ten fatal flaws in conventional risk management . . .
  
  
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  . . . And their ten corresponding enterprise risk intelligence skills
  
  
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  Why doing business based on tradition, habit, or on autopilot can mean your business's downfall
  
  

This book reveals risk management to be an integral part of value creation and preservation. Get smart in your approach to risk with the timely and relevant guidance found in Surviving and Thriving in Uncertainty: Creating the Risk Intelligent Enterprise.

Foreword.

Preface.

Introduction.

Conventional Risk Management.

A Risk Intelligent Approach.

The Approach of This Book.

The Structure of This Book.

PART I WHEN RISKS BECOME BRUTAL REALITIES.

CHAPTER 1 To Survive and Thrive: A Matter of Judgment.

The Revolving Door to the Corner Office.

Barriers to Board Effectiveness.

The Imperatives of the Enterprise.

CHAPTER 2 Conventional Risk Management Has Failed.

What Goes Up Must Come Down.

The Evolution of Finance, Market, and Risk Management Theory.

Taking a (Random) Walk.

CHAPTER 3 An Unconventional Approach to Risk Management.

Calculated Risk Taking Creates Value.

Calculated Risk Taking and Risk Aversion.

Risk Intelligence: An Unconventional Approach.

PART II TEN ESSENTIAL RISK INTELLIGENCE SKILLS.

CHAPTER 4 Check Your Assumptions at the Door.

Fatal Flaw #1: Failing to Challenge Your Assumptions.

Risk Intelligence Skill #1: Check Your Assumptions at the Door.

CHAPTER 5 Maintain Constant Vigilance.

Fatal Flaw #2: Lack of Vigilance.

Risk Intelligence Skill #2: Maintain Constant Vigilance.

CHAPTER 6 Factor in Velocity and Momentum.

Fatal Flaw # 3: Failure to Consider Velocity and Momentum.

Risk Intelligence Skill #3: Factor in Velocity and Momentum.

CHAPTER 7 Manage the Key Connections.

Fatal Flaw #4: Failure to Make Key Connections and Manage Complexity.

Risk Intelligence Skill #4: Manage Your Key Connections.

CHAPTER 8 Anticipate Causes of Failure.

Fatal Flaw #5: Failure to Anticipate Failure.

Risk Intelligence Skill #5: Anticipate Causes of Failure.

CHAPTER 9 Verify Sources and Corroborate Information.

Fatal Flaw #6: Failure to Verify Sources and Corroborate Information.

Risk Intelligence Skill # 6: Verify Sources and Corroborate Information.

CHAPTER 10 Maintain a Margin of Safety.

Fatal Flaw #7: Failing to Maintain a Margin of Safety.

Risk Intelligence Skill #7: Maintain a Margin of Safety.

CHAPTER 11 Set Your Enterprise Time Horizons.

Fatal Flaw #8: Short-Termism.

Risk Intelligence Skill #8: Set Your Enterprise Time Horizons.

CHAPTER 12 Take Enough of the Right Risks.

Fatal Flaw #9: Failure to Take Enough of the Right Risks.

Risk Intelligence Skill #9: Taking Enough of the Right Risks.

CHAPTER 13 Sustain Operational Discipline.

Case Example: The U.S. Submarine Force.

Fatal Flaw #10: Lack of Operational Discipline.

Risk Intelligence Skill #10: Develop and Sustain Operational Discipline.

PART III CREATING THE RISK INTELLIGENT ENTERPRISE.

CHAPTER 14 Risk Intelligence Is Free.

A Closer Look at Costs.

The Rewards of Risk Intelligence.

CHAPTER 15 Risk Intelligent Governance.

The Risk Intelligent Board.

Committees of the Board and Risk Intelligence.

Where Does Risk Oversight End and Risk Management Begin?.

CHAPTER 16 Risk Intelligent Enterprise Management.

ERM and Risk Intelligence.

Developing Risk Intelligent Enterprise Management.

Act as One.

A New Way of Doing Business.

CHAPTER 17 The Way Forward: Creating the Risk Intelligent Enterprise.

The Benefits of Improved Risk Intelligence.

What’s Your Enterprise Risk IQ?

Making the Transformation.

Conclusion.

Notes.

About the Authors.

Index.