Black Swan Problem: Risk Management Strategies for a World of Wild Uncertainty

"Proactive risk management is a common buzzword nowadays and a hot topic in the corporate world. The execution, however, is not as easy as it may seem. We essentially live in a world of "wild uncertainty" instead of neat probabilities. What should managers do about it? The book explores different basic approaches -- high-level strategies -- for navigating in such a world. It argues that getting organizational culture and analytics right is a key aspect of making firms less "swan-prone." It explains and maps out the three generic strategies for increasing resilience/antifragility: insurance, buffers and flexibility. Intriguingly, however, resilience and antifragility may not be the primary goals of some firms. There may in fact be a case to be made for engaging in "big-wave surfing" and maximising exposure to the swans. The book also covers some fascinating theories about risk-taking in firms, showing that the BSP is about more than just minimising risk. The book will: Explain in detail, and using examples and stories (e.g. Norwegian, Netflix, Texas energy retailer Griddy, private equity sector, BP, etc.), how the commonly misunderstood Swans function, and the mechanisms that bring them about. Extend the typical focus on individual biases to analyse Swansas an organizational problem Elevate the Swans to the level of strategy and explains how Swans are make-it-or-break-it moments for firms Discuss important differences between different kinds of Swans Illustrate various practical applications and tactics related to the generic strategies of insurance, buffers and flexibility"--
An incisive framework for companies seeking to increase their resilience In The Black Swan Problem: Risk Management Strategies for a World of Wild Uncertainty, renowned risk and finance expert Håkan Jankensgård delivers an extraordinary and startling discussion of how firms should navigate a world of uncertainty and unexpected events. It examines three fundamental, high-level strategies for creating resilience in the face of “black swan” risks, highly unlikely but devastating events: insurance, buffering, and flexibility: The author also presents: Detailed case studies, stories, and examples of major firms that failed to anticipate Black Swan Problems and, as a result, were either wiped out or experienced a major strategy disruption Extending the usual academic focus on individual biases to analyze Swans from an organizational perspective and prime organizations to proactive rather than reactive action Practical applications and tactics to mitigate Black Swan risks and protect corporate strategies against catastrophic losses and the collateral damage that they cause Strategies and tools for turning Black Swan events into opportunities, reflecting the fact that resilience can be used for strategic advantage An expert blueprint for companies seeking to anticipate, mitigate, and process tail risks, The Black Swan Problem is a must-read for students and practitioners of risk management, executives, founders, managers, and other business leaders.