Summary of Douglas W. Hubbard's The Failure of Risk Management

Please note: This is a companion version & not the original book. Book Preview:

#1 The first edition of this book came out on the tail end of the Great Recession in 2008 and 2009. Since then, several major events have resulted in extraordinary losses both financially and in terms of human health and safety.

#2 The widespread inability to make the sometimes-difficult distinction between methods that work and those that don't means that ineffectual methods are likely to spread. Once certain methods are adopted, institutional inertia cemented them in place.

#3 In 2017, a new variation of the Boeing 737 MAX series passenger aircraft was introduced: the 737 MAX 8. Within twelve months of the initial roll out, well over one hundred MAX 8s were in service. In 2018 and 2019, two crashes with the MAX 8, totaling 339 fatalities, showed that a particular category of failure was still possible in air travel.

#4 The common mode failure hierarchy could be taken even further. A single software problem may cause problems on multiple 737 crashes, but the risk management method itself could be flawed. A weak risk management approach is the biggest risk in an organization.

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