Author Archives | Steven Slezak
political risk storm

Why corporate culture needs risk literacy

Risk can be calculated with at least fair amount of confidence. Uncertainty cannot. Therein lies confusion. It is important to recognize the distinction between two fundamental but closely related concepts in risk analysis – the difference between uncertainty and risk. Trouble ensures when companies and organizations fail to develop a clear understanding of the nature […]

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General Motors

GM’s risk management failures provide lessons for other firms

Strategic fails afford valuable lessons. There is something to be learned from the spectacular recent failure of General Motors’ once highly-touted enterprise risk management program. In 2012, G. Mustafa Mohatarem, the Chief Economist at General Motors, in praise of his firm’s implementation of a new Enterprise Risk Management (ERM) program, commented on lessons learned by […]

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Dairy cows

U.S. beef recall affects fragile agribusiness supply chain

A recent U.S. federal government recall of tainted beef illustrates the complexity and pressing risks of the global food supply chain. Managing these risks is critical to agribusiness, the well-being of billions of people and the global economy. To those who make a living from the fields, the global food supply chain appears about as […]

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California drought threatens to destabilize agriculture markets

Food availability, affordability and quality drive food security problems in the world. The drought in California threatens to exacerbate food security problems in all three issue areas. The state of California is deep into the third year of a record drought. An excellent map from the University of Nebraska shows that nearly 91% of the […]

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The Diaoyu Islands may be China’s Islas Malvinas

China’s combative strategy, which is not supported by its actual military capabilities, risks more than it is likely to gain. It does not matter how slowly you go as long as you do not stop. – Confucius Thirty-five years ago, China launched a strategic policy of “peaceful rise.” Its goal was to foster Chinese economic […]

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currency trading

Risk management is at the core of strategy development

Strategy does not just happen. It is the result of a systematic process and risk management is at the core. Strategy is a dynamic process characterized by three distinct stages: formulation, implementation, and evaluation. The first phase creates strategies and plans, the second and third are their execution. The entire process consumes a great deal […]

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Deepwater Horizon

Sound risk management creates competitive advantage

Companies can be analyzed in terms of the relative maturity of their risk management practices. This helps us understand how a company uses risk management to create value and develop its competitive advantage. The PwC and the MIT Forum for Supply Chain Innovation released a study in 2013 that found, of 209 companies it surveyed, […]

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Is risk management a component of competitive advantage?

Competitive advantage is dead!  Long live competitive advantage!  Several previous posts argue that strategic risk management creates value for a corporation by operating within the company’s value chain. The point was to demonstrate that strategic risk management is an important component of any company’s competitive advantage, as described by Michael Porter of Harvard University. And competitive […]

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Sri_Lankan_elephants

Companies shouldn’t risk how they manage risk

To quote UCLA Coach John Wooden, “Never mistake activity for achievement.” Integrating risk management into the corporate value chain is a daunting proposition. Policy is not enough. Execution is critical. A company can get in its own way. An ancient Indian parable tells of blind men describing an elephant. The task exceeds their capabilities. They cannot […]

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Canary Wharf

Corporate risk management still lags behind

The good news is strategic risk management is beginning to gain traction. The bad news is practitioners still think traditionally. A survey released recently by Deloitte and Forbes Insight, celebrates the fact that corporations around the world “have changed their approach to strategic risk management over the past three years.” It goes on, “companies are […]

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