Learn Why Risk Management is Still Broken and How to Fix It

The risk management field is constantly evolving. Unfortunately, many organizations fail to evolve with it. They frequently apply risk management techniques that are proven not to work. These dangerously flawed methods are mere placebos which do nothing to reduce risk and improve decisions.

That doesn't need to be the case. In The Failure of Risk Management, Second Edition renowned risk analysis expert Douglas W. Hubbard explains why certain common risk management techniques are causing bad decision making. He also explains which techniques actually deliver genuine value. Through case studies, review of existing research, and detailed procedures, Hubbard illustrates how decision-makers at organizations in any and all industries can adjust their risk management methodologies to better suit the demands of the modern world.

Once you understand the reason popular risk management techniques don't work, you'll know what you must do to ensure your organization thrives in the future.

"Some study the theory of risk management. Some actively engage in risk management and find that what works in theory does not always work in practice. Some develop new technologies that will make risk management work better in the future. Doug Hubbard does all three. That's why this book should be your risk management must-read."
—SAM L. SAVAGE, PhD, Executive Director, ProbabilityManagement.org, Author, The Flaw of Averages: Why we Underestimate Risk in the Face of Uncertainty

"Combining solid research with unassailable logic and examples, Douglas describes why today's common risk measurement beliefs and practices are profoundly flawed. Perhaps more importantly, he provides alternative methods that are effective and practical. His 'start simple and evolve from there' strategy is spot-on, proving that you don't need high levels of complexity or a PhD in math to make significantly better-informed risk management decisions. This book should be required reading for anyone whose job responsibilities include risk management."
—JACK JONES, RiskLens Co-Founder and Chief Scientist, Creator of the FAIR method

"Not long after the Great Recession of 2008, I assigned my students the First Edition of The Failure of Risk Management as required reading. My students still tell me that they turn to this book in their professional careers. Hubbard disrupted the world of risk consultants with this masterpiece and with its Second Edition he brings us fresh examples and insights from new research."
—PETER ALAN SMITH, Professor of Insurance and Risk Management, College of Charleston School of Business

"The First Edition of The Failure of Risk Management demolished myths and mistakes and the thinking that qualitative assessments are 'good enough.' The Second Edition extends this excellent work with new useful and practical methods to be quantitative in assessing risk and taking actions to manage it."
—STEVE ROEMERMAN, Lone Star Chairman and CEO

A practical guide to adopting an accurate risk analysis methodology

The Failure of Risk Management provides effective solutionstosignificantfaults in current risk analysis methods. Conventional approaches to managing risk lack accurate quantitative analysis methods, yielding strategies that can actually make things worse. Many widely used methods have no systems to measure performance, resulting in inaccurate selection and ineffective application of risk management strategies. These fundamental flaws propagate unrealistic perceptions of risk in business, government, and the general public. This book provides expert examination of essential areas of risk management, including risk assessment and evaluation methods, risk mitigation strategies, common errors in quantitative models, and more. Guidance on topics such as probability modelling and empirical inputs emphasizes the efficacy of appropriate risk methodology in practical applications.

Recognized as a leader in the field of risk management, author Douglas W. Hubbard combines science-based analysis with real-world examples to present a detailed investigation of risk management practices. This revised and updated second edition includes updated data sets and checklists, expanded coverage of innovative statistical methods, and new cases of current risk management issues such as data breaches and natural disasters.

• Identify deficiencies in your current risk management strategy and take appropriate corrective measures
• Adopt a calibrated approach to risk analysis using up-to-date statistical tools
• Employ accurate quantitative risk analysis and modelling methods
• Keep pace with new developments in the rapidly expanding risk analysis industry

Risk analysis is a vital component of government policy, public safety, banking and finance, and many other public and private institutions. The Failure of Risk Management: Why It's Broken and How to Fix It is a valuable resource for business leaders, policy makers, managers, consultants, and practitioners across industries.