All business proceeds on beliefs or judgments of probabilities, and not on certainties.
Charles Eliot, President Harvard University
By consciously or unconsciously calculating probabilities, we make intelligent decisions and take control of our lives. We don’t make a conscious risk analysis but intuitively look at alternatives at how we live day-to-day. When we’re confident of an outcome, we decide to do something. Rightness to do something comes when there’s congruence with our heart, head, and gut.
The dictionary defines risk as the “potential for the realization of unwanted negative consequences of an event.” Therefore, Murphy is alive and well – if something can happen, it will. We can try to understand and mitigate Murphies or they can victimize us. The choice is ours. Risk management is the process by which we try to control Murphies from crossing a street to starting a business. Why do we bother looking both ways when we cross a street? We look for possible sources of risk like a truck pancaking us as we cross the street.
The one-world concept is reality now. When a satellite recently suffered a computer failure and rotated out of orbit, The Wall Street Journal declared: “it severed a lifeline in American business and society that most people never knew existed.” What happened? Eight of the nation’s 10 biggest paging companies were unable to supply service to hospitals and police departments. Drivers at Chevron gas stations couldn’t use pumps at thousands of service stations.
As the world is becoming globally interconnected, more Murphies are just waiting to occur. Understand risk management. Add it to your professional tool kit.
Life Lesson Earned: Read risk books: Black Swan and Against the Gods: The Remarkable Story of Risk. In the latter book, the author says the mastery of risk is the foundation of modern life and is what divides modern from ancient times.