The Right Way to do Risk Management with Alex Sidorenko

Risk management is essential for effective decision making and should be integrated into investments, budgeting, and performance to ensure internal well-being and external assurance.

00:00 🤔 Alex Sidorenko joins Marcus Dimbleby to discuss how to lead more effectively through understanding the uncertainties of a decision and managing risk registers quantitatively.
1.1 Alex Sidorenko joins Marcus Dimbleby to discuss how great leaders think and how to lead more effectively.
1.2 Alex, a chief risk officer with 16 years of experience, hosts the Risk Awareness Week conference, the Risk Academy YouTube blog, and is the most controversial risk management Vlog on YouTube.
1.3 Risk management is a simplified version of complex sciences such as probability theory, decision science, and neuroscience, which has been hijacked and sold as a new concept.
1.4 Quantitative risk management is the scientific approach to risk management, while qualitative risk management is the astrological approach that has no measurable impact on decision making.
1.5 Risk management is about understanding the uncertainties of a decision and how it will change with different assumptions to make better decisions faster.
1.6 Risk registers should be managed quantitatively to mitigate and avoid risks before they manifest.

05:52 🤑 Quantitative risk analysis and communication of fair prices can save money and make better decisions faster for a high return on investments.
2.1 Risk management is a great passion and hobby, and my blog is called the most controversial risk management as it challenges the idea of astrology and encourages people to focus on astronomy instead.
2.2 Companies are making money by selling horoscopes to risk professionals, despite the irony of applying quantitative risk management.
2.3 By doing quantitative risk analysis and communicating the fair price of policies to the markets, we saved 13 million in a single year.
2.4 Buy quantitative and make better decisions faster to get a high return on investments and future-proof your risk management.
2.5 Risk management one is window dressing that disconnects the decision from the risk, often leading to unnecessary mitigation of risk.
2.6 Risk management starts with the decision at hand, and the methodology used depends on the desired speed and accuracy of the analysis.

11:54 🤔 Think before you act or speak, as there is always inherent risk in any decision, and agility encourages short-term decision making with optionality to pivot if risks manifest.
3.1 Risk management should be renamed to risk taking as it is about understanding how much risk to take in order to make a decision.
3.2 Risk is unavoidable in today's complex world, and risk aversion can lead to missed opportunities and disadvantages.
3.3 Think before you act or speak, as there is always inherent risk in any decision.
3.4 Decisions are usually binary, but in reality there are multiple options to choose from, including doing nothing.
3.5 Simple mathematical models consistently outperform intuition when it comes to predicting the future, and iterative decision making is necessary to account for changing conditions.
3.6 Agility encourages short-term decision making with optionality to pivot if risks manifest, delegating decision-making to teams instead of holding it at the top.

19:00 🤔 Adopting a risk management mentality and challenging industry best practices can help us identify threats and opportunities and create a hybrid journey to navigate our desired future.

27:15 🤔 Organizations are mistakenly relying on outdated risk management strategies instead of integrating it into decisions and adjusting investments, budgeting, and performance.

35:46 🔑 Opening the door to risk thinking and managing it can lead to increased internal well-being, confidence, and assurance from external stakeholders.

41:37 🤔 Teaching children to be honest about mistakes can help avoid bigger consequences and Risk Awareness Week encourages people to go back to the roots of risk management.

46:16 💡 Get the most out of risk management by focusing on decision science, risk awareness, and understanding who is in front of you.