My guess would be that risk analysis and mitigation would be one of the more useful positive techniques in practical rationality. I wish every organization with executive officers had a CRO (chief risk officer) position. Of course, a person like that would be highly unpopular, as they would be constantly asking some very hard questions. Imagine that it is you against Murphy. What can go wrong? What are the odds of its going wrong? What are the odds of you mis-estimating that it will go wrong? What has gone wrong in the past? What are the potential mitigation steps? What are the odds of the mitigation steps themselves going wrong? Basically, a CRO would ensure that an organization is (almost) never blindsided, except maybe for true black swans. Otherwise the most that can happen is “a failure mode described in has occurred, we should now review, possibly update and implement the risk mitigation steps outlined”. The standard business plan is certainly not a substitute for something like that.
Most companies do not do nearly enough risk analysis and management, possibly because the CEOs are required to be optimistic, and neither the CEO nor the board are personally responsible for failures. The worst that can happen is that they are booted out and get a golden parachute.
My guess would be that risk analysis and mitigation would be one of the more useful positive techniques in practical rationality. I wish every organization with executive officers had a CRO (chief risk officer) position. Of course, a person like that would be highly unpopular, as they would be constantly asking some very hard questions. Imagine that it is you against Murphy. What can go wrong? What are the odds of its going wrong? What are the odds of you mis-estimating that it will go wrong? What has gone wrong in the past? What are the potential mitigation steps? What are the odds of the mitigation steps themselves going wrong? Basically, a CRO would ensure that an organization is (almost) never blindsided, except maybe for true black swans. Otherwise the most that can happen is “a failure mode described in has occurred, we should now review, possibly update and implement the risk mitigation steps outlined”. The standard business plan is certainly not a substitute for something like that.
Most companies do not do nearly enough risk analysis and management, possibly because the CEOs are required to be optimistic, and neither the CEO nor the board are personally responsible for failures. The worst that can happen is that they are booted out and get a golden parachute.