If you believe that this podcast only concerns specialists in risk management, I shall try to show that also you are called to rethink the way you act when managing risks in your business, even in your private life.
At the RiskIn conference 2025, there was a witty but profound presentation made by the risk manager of a big hospital group in Switzerland and a professor at the University of Lucerne. It was an enlightening and fascinating dialogue.
I wish I had the talent of a script writer to tell you this tale!
It all started with a statement: the homo oeconomicus is dead, let’s work with the homo heuristicus! At this point, there was a danger of losing an audience whose Latin might be a long-forgotten language spoken in some churches and scientific publications on plants, flowers and birds…
But they immediately switched to an even more provocative discourse on the “Big Five” Risk Management Failures. I was slightly irritated because I feel that professors are far away from practice. Still, I am polite and patient and was rewarded. The messages were not only true but also overdue, at least for many of us.
The quintessential part of the presentation was that we work according to time-old methods and ignore all the possibilities that science offers to do a better job.
The Big Five? Here they are:
We believe that risks are predictable, we mistake qualitative analysis for objectivity, we assume that people behave rationally, we believe that risk analysis needs no technical skills, and we detach risk management from decisions.
The professor went even further in his critics. I noted a few sentences, like “Methods survive not because they work, but because they feel good or are easy to sell”, or “It takes decades for evidence-based insights to trickle into corporate routine”. One more: “Consultants offer scalable tools, not those that challenge client comfort zones.” And finally: “Changing risk practices is itself risky. So most don’t.”
Refreshing? Well, more than food for thought. It is a call to action. And if the current generation does not take up the challenge, I know that many young people are eager to do so.
Paul.
P.S. Don´t forget to ask PAVEL anything about insurance.
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