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Pay attention to the anomalies

The first article is a bit of a thicker read as it’s meant for risk management professionals but it’s applicable to everyone since, when you think about it, risk management in your life is everyone’s job. We’ll look back on the pandemic as one of these novel risks (hopefully not to be repeated anytime soon!) and how we could all have better managed it and future novel risks.

The Risks You Can’t Foresee [Harvard Business Review] – “Well-run companies prepare for the risks they face. Those risks can be significant, and while they’re not always addressed successfully—think Deepwater Horizon, rogue securities traders, and explosions at chemical plants—the risk management function of a company generally helps it develop protocols and processes to anticipate, assess, and mitigate them. Yet even a world-class risk management system can’t prepare a company for everything. Some risks are so remote that no individual manager or group of managers could ever imagine them. And even when firms envision a far-off risk, it may seem so improbable that they’re unwilling to invest in the capabilities and resources to cope with it. Such distant threats, which we call novel risks, can’t be managed by using a standard playbook. […] The clearest signal that a novel risk is emerging is anomalies—things that just don’t make sense. This sounds obvious, but most anomalies are difficult for people to recognize.” It’s very easy to dismiss anomalies as just anomalies but they’re probably signals of something bigger. Anomalies aren’t “weird things you can easily dismiss” but may be a warning bell. Also, you’re the senior executive that needs to worry about what could go wrong. 🙂

10 Steps to Make Sure You Have Enough Money to Retire [Retirement Manifesto] – “One of the biggest worries folks have as they approach retirement is whether or not that they have enough money to retire. Since the goal of this blog is to “Help People Achieve A Great Retirement”, it seems appropriate to address that worry with this step-by-step plan. Follow these 10 steps and worry no more. They’re the steps my wife and I followed when we were making the decision on when to retire, and I’m confident they’ll serve you well as you make your decision.”

The Lesson to Unlearn [Paul Graham] – “The most damaging thing you learned in school wasn’t something you learned in any specific class. It was learning to get good grades.” Hmmm…. 🙂