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Immediate Vault

RIMS 2011 Wrap Up

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Freakonomics and SuperFreakonomics co-author Stephen Dubner talks risk at RIMS 2011 Vancouver.

It was an exhilarating, educational, exciting and eye-opening week for those of us who enjoyed RIMS 2011 in Vancouver throughout the past week. Having made the long journey back to New York yesterday, I sit here today leafing through my notes from great conversations, thinking back upon the events I attended and appreciating all the friendly faces I met.

In the days to come, we will surely have a few more posts related to what we learned or thought up during the show, but for now I’ll leave you with a look back at the week that was as we head into the weekend — one certain to include a lot of sleep for these battle-worn editor.

RIMS 2011 Coverage from the Risk Management Monitor:

Stephen Dubner on Predicting Risk at RIMS 2011

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Stephen Dubner, author of Freakonomics and SuperFreakonomics, proved he is an interesting and extremely intelligent individual with the publication of his two books, which explore the hidden side of everything, from cheating teachers, bizarre baby names, self-dealing realtors, and crack-selling mama’s boys. Crazy, but smart.

The staff of Risk Management are fans of Dubner and co-author Steven Levitt’s work (read our review of SuperFreakonomics), so we were thrilled to learn that Dubner would be the keynote speaker here at RIMS 2011.

Dubner, a scholar and journalist, talked to the packed room about how difficult it is to manage risk, as he so aptly stated: “Assessing risk is predicting the future, which is somewhere between very hard and impossible.” He noted that even the “experts” cannot predict what will unfold in the future. As an example, he used football experts who predict the winners and losers every season.

“They have the best experience and access to info,” he said. “When you go back and look at their predictions, however, we’d have a better chance of predicting with a dart and dartboard.”

Why?

Because just like in business, you can’t predict acts of randomness. Though football experts may know what team or player they think is the best, they cannot predict injuries or turnovers, footballs acts of randomness. And it’s random events that can have a huge impact on your business. Though we can’t predict, we can prepare.