Elements of Risk Management: Ideas & Insights from Prospect Theory & Psychology

Описание: A look at some significant failures in business, international affairs, industry, and finance (Enron, 2008 Financial Crisis, Eisenhower U-2 crisis, Plane Crashes, Cuban Missile Crisis) And an argument that these were also failures of “Risk Management.”

Some approaches and new language from Prospect theory and Psychology (domain of gains, domain of losses, inattentional blindness, motivated blindness, slippery slope) are discussed, to better understand and prepare for similar events.

Ideas from some of the work of “Decision Making” expert Max Bazerman about the Power of Noticing are discussed.

Ideas from some of the work of “Risk & Intuition” expert Gerd Gigerenzer about Intuition and Heuristics are briefly discussed.

Solutions from business expert Jim Collins that can help leaders and managers to manage risk better are discussed.
(1) Create a climate where the truth can be heard.
(2) Create Red-Flag mechanisms which ensure that "information that should not be ignored" is communicated effectively.

An unusual argument is offered, that Risk Management is also an Unending Campaign, and that it would be most worthwhile for leaders and risk managers to acquire skills in persuasion, (convince, charm, cajole) campaigning, and public speaking.

After watching this talk viewers will be able to:
1. Analyze huge failures from a different perspective.
2. Be familiar with the basics of prospect theory and be able to discuss risk using some of the language of prospect theory.
3. Appreciate elements of psychology, which subconsciously drive decision-making and inadvertently increase decision-making, business and project risks.
4. Introduce new language into risk management meetings and discussions: prospect theory, domain of gains and domain of losses, inattentional blindness, motivated blindness, and slippery slope.
5. Appreciate the advantages of also thinking intuitively and using heuristics.
6. Create a business and project culture where autopsies can be conducted without blame.
7. Create RED FLAG mechanisms, which turn information into “information that cannot be ignored”.
8. Appreciate anew that Risk Management is also an Unending Campaign.

Delivered on July 9, 2019 to PMI-H (Project Management Institute – Houston)

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For a more detailed understanding of the Enron & 2008 Financial Crisis players and mechanics:
1. Enron: The Biggest Fraud in History.    • Enron - The Biggest Fraud in History   19 minutes
2. The Crisis of Credit Visualized.    • The Crisis of Credit Visualized - HD   11 minutes
3. Panic: The Untold Story of the 2008 Financial Crisis (VICE Special Report)    • Видео   96 minutes.

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