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Sometimes you need to go beyond nudging decision makers. However, the personal risk you take when challenging a decision depends on culture.

Last week I was given cause to reflect on my time at HIH Insurance and the causes of its demise in 2001. While there were many, and people with different lenses could easily come to different conclusions, my view is that the culture did not allow sufficient leaders to speak their mind.

The CEO, Ray Williams, was a powerful personality. One of the most caring,

Can you make a difference with measurement if the culture of your organisation is one that does not respect, let alone crave data? In my experience it is tough to go hard against the grain of an organisation’s culture. The better way is to nudge it.

How might you nudge it? Culture change can start from outside the executive team but ultimately it has to be adopted by a key executive and then the whole executive. So no better place to start than with the strategic risks of your organisation.

How do

Back in 2015, McKinsey published a paper on the future of risk management in the banking sector. At the time I sent it to many of my clients in other sectors because of its very important messages, including this one in their summary:

Where should your lead indicators (KRIs or Key Risk Indicators in the field of risk) come from?

A few years ago my colleague Andrew Prately and I toured the country to speak at Chartered Accountants Business Forums. We spoke on KPIs – Key Performance Indicators. We talked about lead and lag indicators and we talked about limiting the number of KPIs, as having too many creates its own industry of measurement and reporting with very little influence on decision making. Because more often than not o

My colleague Dr Andrew Pratley and I are on a mission to defeat quantifornication. Last week we ran the first of two free interactive webinars we are running to explore the topic. We had attendees from a range of industries including banking, emergency services, energy, insurance, health, policy agencies and regulators from federal and state governments, local government, engineering consultants, risk and cyber risk consultants, IT service providers and many more.

Everyone was there for the same

My stats guru colleague Dr Andrew Pratley and I are on the move to tackle Quantifornication, the plucking of numbers out of thin air. Last week was supposed to be our final blog we are co-writing but we couldn’t resist sneaking in another one after the great response from our last one.

Last week we wrote about the concept of directionality, taking what you know having applied the three-question framework and testing with more data to gain even more certainty of your decisions. We defined directio

My stats guru colleague Dr Andrew Pratley and I are on the move to tackle Quantifornication, the plucking of numbers out of thin air. Here is the seventh in a series we are co-writing.

Nothing is certain. Not even death and taxes. Because the only certainty is uncertainty, there’s no foolproof way to make the right decision. Most organisations deal with this by putting in a time constraint. Forcing a decision, however imperfect it may be.

While keeping the organisation moving by forcing decisions

My stats guru colleague Dr Andrew Pratley and I are on the move to tackle Quantifornication, the plucking of numbers out of thin air. Here is the sixth in a series we are co-writing.

Relationships are the branch of statistics that describe how one thing influences another. We know these as regression analysis, x-y plots or scatter plots. The classic regression plot involves a line of best fit. We tend to think that the better the line of fit, the better the statistical relationship. That’s true,

My stats guru colleague Dr Andrew Pratley and I are on the move to tackle Quantifornication, the plucking of numbers out of thin air. Here is the fifth in a series we are co-writing.

My stats guru colleague Dr Andrew Pratley and I are on the move to tackle Quantifornication, the plucking of numbers out of thin air. Here is the fourth in a series we are co-writing.

We all have a tendency to overestimate our knowledge. And as a result, we believe that we know things which we don't. Our understanding of what is random is even worse – hence Nassim Taleb’s book Fooled by Randomness. It's the overconfidence that is the problem. It causes us to jump to the wrong answer and believe i

My stats guru colleague Dr Andrew Pratley and I are on the move to tackle Quantifornication, the plucking of numbers out of thin air. Here is the third in a series we are co-writing.

Why do so many educators in statistics consistently fail to translate these ideas into something that people can both remember and use? The problem is the language, not the numbers. Part of the problem with statistics, as is the case with most technical subjects, is the unique terminology. The COVID-19 pandemic has s

My stats guru colleague Dr Andrew Pratley and I are on the move to tackle Quantifornication, the plucking of numbers out of thin air. Here is the first in a series co-written together.

We’re far better at identifying good and bad writing than we are identifying good and bad numbers. The premise of this idea almost doesn’t seem logical. How can a language like English, with all of its oddities, be easier to separate the good from the bad?

Our education in English has a substantial amount of time de

My stats guru colleague Dr Andrew Pratley and I are on the move to tackle Quantifornication, the plucking of numbers out of thin air. Here is the first in a series co-written together.

Assessing and measuring risk appetite away from an investment portfolio is perhaps one of the most difficult risk management initiatives practitioners have to entertain, it is also discussed often on risk forums and written about avidly by many consulting firms.

In this article we release a white paper that steps through the entire process of measuring and assessing risk appetite, dealing with the numbers specifically rather than just top level summaries and catch phrases on what risk appetite is

Douglas Hubbard, in his book "The Failure of Risk Management", claims that risk management failed us in the lead up to the GFC because of flawed risk models, the use of qualitative risk assessment through the use of risk matrices or both. He contends that anything can be measured and that we should be measuring.

The case for quantification
There is no doubt in my mind that quantification is better than using our best judgement because our minds are at the mercy of our psychological biases. A coup

A recent debate on the ISO 31000 Linked in forum about time and risk poses the following question "Is delaying a risk considered a separate treatment method or is it just a sub-type of changing the likelihood?"