An old friend from England pointed me to this white paper - A new risk culture model - that he wrote recently (hi Jason). Jason is working on developing on an open-source risk framework (details here) and the white paper is an interesting, if straightforward concept, for describing risk culture in terms of factors that influence and motivate a certain risk response. The principle is to replace a risk-centric description of the approach with an action-centric one. Worth a read if you are interested in risk. Download and read the paper for more.
Regular readers of the blog will know that much of what I describe is based on a preference for action - to turn insight and expertise into actions that make an operational decision better. One of the challenges with true enterprise risk management is not just the assessment of low-volume, high-impact risks but also that of high-volume low-impact ones. The potential loss on a single transaction due to poor risk assessment of a new supplier, say, may be small but the cumulative impact of many such transactions might be very large. I blogged about this before in response to a Claudia Imhoff webinar.
This is the essence of Enterprise Decision Management - finding these small individual decisions and then automating and improving them so as to constantly improve your business. Risk is a particularly profitable area for this approach as there is risk in many of your decisions, even if only the risk of not having the resources you committed to use elsewhere. These kind of risk decisions also become more complex as you typically have to consider them as a set and trade them off against one another - a great use for optimization and simulation technologies - to come up with the best rules to use.
If you are interested in how organizations make decisions you might enjoy David Ullman's book Making Robust Decisions.
