Customer Reviews:
Showing reviews 21-25 of 32
 Important Reading June 2, 2009
John Schuyler (Denver)
4 out of 6 found this review helpful
This book needed writing. Doug Hubbard convincingly makes the case with abundant examples that risk management has failed. Memorable examples include anecdotes about:
* Space shuttle launch risks
* Outsourcing drug manufacturing in China
* The ongoing financial crisis
* Examples from his consulting (mostly in IT).
Fixing risk management isn't difficult. It's mostly about modeling uncertain systems. Express judgments as probability distributions and employ Monte Carlo simulation to do the calculations. Be a scientist: Look outward for available input data and for model validation. Recognize risk and decision analysis as valuable profession that warrants certification.
I enjoyed humor in the book. He favors short over long and definitions. He forsakes a long, formal definition of risk management, in favor of this shorter definition: "Being smart about taking chances." Regarding the recently-popular term, enterprise risk management, he warns that adding enterprise means more expensive. In reference to management's ill-placed attraction to scoring methods, he writes, "If you call it a score, it will sound more like golf, and it will be more fun for them." The title of chapter 7 is "Worse Than Useless: The Most Popular Risk Assessment Method and Why It Doesn't Work."
The book is superbly written, designed and edited. The straightforward organization includes three parts:
1. An Introduction to the Crisis
2. Why It's Broken
3. How to Fix It.
High points for me were the sections about the history of risk management, debunking popular scoring methods that are worse than useless, calibration tests (short, illuminating exercises for the reader to do), human biases, the current financial crisis (there will always be a next crisis), and near-misses as potential-failure warnings (e.g., foiled terrorism plots).
I wish the book or its associated website 1) included more calculation examples, 2) recognized decision tree analysis as a calculation alternative (sometimes preferable to simulation), and 3) provided stronger guidance about improving decision policy.
Hubbard provides abundant citations and references as take-off points for the interested reader to pursue. His first book, How to Measure Anything (Wiley, 2000), is built upon--though not prerequisite--and provides additional detail about assessing (measuring) uncertainties.
In another generation perhaps this book will be unnecessary. As soon as kids learn fractions, they can start learning about probability--the language of uncertainty. The techniques in the book should become mainstream and part of every numerically-literate person's toolkit. Then, the "Introduction to the Crisis" and "Why It's Broken," Parts 1 and 2, will be only of historical interest. Once people and organizations recognize risk management as routine, the needed instruction will be about good risk assessment and modeling practice.
Five stars! In my opinion most any professional, especially in management, should read this book.
Doug Hubbard knows his stuff May 22, 2009
Sam L. Savage (Palo Alto, CA USA)
3 out of 4 found this review helpful
Doug Hubbard really knows his stuff. He is not just an author who has learned enough about a current popular topic to write a book, but instead is a talented consultant in this area, who has learned how to write, and write well. He displays a deep real world understanding that ranges from mathematics to everyday human behavior, a trait that is all too rare in this age of specialization.
Because this subject is poorly understood by the public at large, many "accepted" risk management procedures, both qualitative and quantitative are fundamentally flawed. Doug has the experience to know what actually works.
Great science and great writing May 19, 2009
Tomas Friend (Alabama, USA)
2 out of 4 found this review helpful
If I had to pick a single book to exemplify how technically oriented books should be written, this would be it. This book is as entertaining as it is informative, and it is very informative. Mr. Hubbard's conversational style of writing makes reading the book as pleasant as having a conversation with a good friend. He mixes wit and knowledge in proportions that kept me turing the pages without diminishing the importance of the topic or the scientific reasoning he uses to address it. His ability to criticize in truly objective language is all too rare and, I regret to say, responsible for the only disappointment I felt in reading the book. Mr. Hubbard does not vilify, point fingers, or judge in ways that I have come to expect from well known authors I have seen on television. No support for my biases here. This book is a great read for anyone who appreciates the application of science and reason to solve problems.
The definitive guide to risk for business readers May 10, 2009
AmericanDane (Glen Ellyn, IL USA)
1 out of 2 found this review helpful
In Failure of Risk Management, Doug Hubbard does two things exceptionally well. First, he critiques the current state of thought on risk management. This overview summarizes the state of the art as well as comments on the (unfortunately) worst practices that some consulting firms espouse and the `grow-your-own' approaches that many well-meaning subject matter experts invent.
Second, Hubbard synthesizes this survey down to a practical set of recommendations that both pass muster with the literature, as well as carry his own unique brand of praxis. This is what makes him the premier thinker on this subject for the business reader.
Along the way, he suggests innovative ideas on how businesses might better set themselves up for success. He proposes metric-based incentives to mitigate over-risky behavior. He also addresses the group dynamic issues that are crucial for ensuring that risk management getting its objective, honest due. Readers will immediately recognize that such management challenges are at least as crucial in managing risk as is getting the science right.
Another Home Run May 6, 2009
Michael Palmer (Cornwall, VT)
5 out of 7 found this review helpful
Douglas Hubbard has done it again. After creating what I call the Rosetta Stone of measurement in How To Measure Anything, Hubbard has now given us a straightforward roadmap to risk management in The Failure of Risk Management. The book is clear, easy-to-read, and easy-to-understand. This is a guidebook, not a tome.
Hubbard uses a problem-solving structure for the book. First he describes some of the problems associated with risk management, as that concept is frequently understood in the business world. He then provides a diagnosis of why some current models of risk management are inadequate or worse. In this section, Hubbard builds on material from his previous book and adds new insights from the psychology of uncertainty. In Part Three, he describes how we can fix what ails risk management as practiced in the business world.
As with his previous book, Hubbard's central message is about the importance of asking the right questions. Indeed, persuading us to ask questions at all, rather than assuming that we know the answers is part of Hubbard's mission. Our minds are marvelous instruments of problem solving, which are most effective when we calibrate them and focus them properly by means of good questions.
Anyone who must assess risk and make decisions based on such assessments will profit from this book. One could expect to pay hundreds of dollars to attend a seminar on this topic and not learn as much as the price of this book will get you.
Showing reviews 21-25 of 32
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