Thank you for picking a title and all the suggestions for great risk stories. I've been overwhelmed with requests and ideas, from disasters such as Mary Rose, Nokia, Challenger, Piper Alpha, the GFC, and military failures in Afghanistan, through to some of the great success stories of Apple, Amazon, and SpaceX.
I'll need a second volume to cover all the stories at this rate, but please continue sending in your ideas. They are all very much appreciated.
Each story contains the essence of success and failure, but consistent themes emerge. Familiar human factors such as greed, arrogance, politics, and incompetence, but equally many positive examples of persistence, intelligent risk-taking, and genius ideas executed with commitment.
I hope you enjoyed my risk management take on the story of the Titanic for example. The theme that emerged, at least for me, was overconfidence and arrogance.
The confidence in the inability of a risk to eventuate can actually increase the chance of it happening, particularly if risk factors are not independent of each other or are correlated.
In hindsight, most of the elements of these stories I've drafted so far look apparent, or even easy. We might be tempted to think for example, that the PC market's growth was inevitable, and Microsoft just jumped on board. But in 1943, the President of IBM, Thomas Watson, famously asserted, "I think there is a world market for maybe five computers."
Even Bill Gates in 1981, confidently declared, "No one will ever need more than 637KB of memory in a computer. 640KB ought to be enough for anybody." All of which is to say that there was no clear path or assured success for Bill Gates or Microsoft.
Gates and his co-founder Paul Allen developed a series of innovative software products starting with the popular MS-DOS operating system and risked every cent they had, plus more. MS-DOS was an enormous success and quickly became the industry standard for personal computers. With the release of the Windows operating system in 1985, Microsoft cemented its position as a leader in the tech industry. The rest, as they say, is history.
I've tried to take a slightly different tack with each story. Different that is from the mainstream narrative. I am looking at them from engineering perspectives for some stories and human factors in others but mainly from a root cause perspective to take away the key ideas from risk managers. All the stories I've looked at so far, are, could equally be summed up in the words of Kurt Vonnegut Jr, with his famous line from Slaughterhouse 5 "So it goes."
But things are never that simple. Risks are like onions (or ogres, take your pick). Everything I've learned over the past decades of managing risks has found a place in these stories, and I can't wait to share them with you.
In the meantime, I've taken your votes to heart and drafted a couple of covers. I'd be most grateful if you could let me know your thoughts on which of the following sums up these ideas of risk management in action.
Which cover should we go with?
I like Option 1
Go with Option 2
Neither grabbed me.
Stay tuned for another story excerpt from the book, and if you have a little-known story that I should look at, I would love to hear about it.
Thank you as always, for taking the time to help out. It is truly appreciated.
Cheers,
Julian
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