Sunday, 31 August 2008

Risks and type

Anne Fadiman is a wonderfully perceptive reader and she throws up lots of risks which attentive proof readers salivate over, some of which have serious consequences. In no particular order:

* misplaced apostrophes and spaces- my example would be man's laughter or manslaughter.
* misspellings as in the opening paragraph of Beverly Sills' memoirs -" When I was only three and still named Beverly Miriam Silverman I sang my first aria in pubic."
* key words missed out - here her example of the 1631 edition of the St James Bible which had the 7th commandment as "Thou shalt commit adultery."
* misplaced decimal point in a ship's mortgage in 1986 by a New York Law firm which cost their client $11 million.
* omitted hyphen by a NASA computer progammer from Mariner I's flight programme which sent the probe off course so badly that it had to be destroyed, thus wasting the $7 million investment.

However in writing this appreciation of her book "Ex Libris, Confessions of a Common Reader" I find myself at risk of offending her by describing it as a masterpiece, which has far too masculine an overtone for one so alert to gender issues in print, yet mistresspiece seems inappropriate and presumptuous and mispiece reads like the female equivalent of codpiece. So here we are, the only way around is to advise you to read her piece de resistance.

Wednesday, 27 August 2008

Impact on the public domain

Great risk management quote from Sir Edwin Nixon's obituary in the Telegraph today;

"Write nothing internally without considering its impact on the public domain."

Nixon became managing director of IBM UK in 1965 and retired as Chairman of its holding company in 1990, a remarkably long tenure, by today's standards. He also was Chairman of Amersham International from 1988-1996 overseeing notable growth.

In 1968 when I worked at Dexion, known for its slotted angle storage systems , Eddie Nixon was still proudly remembered after his four year stint as a Dexion management accountant, his first business post, as " the one who got away". He certainly managed his career risks extremely well and the obituary records that "although both approachable and good humoured, he was at the same time a perfectionist who liked things done well, and with style."

How does your CEO match up?

Monday, 18 August 2008

Holidays, fun and risk

Holidays away from home are fraught with risks. You are in an unfamiliar place, exposed to unfamiliar weather, eating unfamiliar food and without the restraints that normally you recognise. On top of all of this you have the absurd expectation that, because you are on holiday, nothing can go wrong. Truth is you don't want to think about details when you are on holiday.

I have seen a middle aged European holidaymaker agree to be strapped into a parachute harness and towed into the sky by a motor launch off a Phuket beach whilst a Thai lad, sitting on his shoulders, manipulated the parachute cords to steer him around the bay. To make matters worse the boat did not have a clear run to get up speed, but had to weave its way through the swimmers near the beach.

The issue was not did he have insurance - it would probably not have paid out if there had been an accident - but why did he not recognise the danger and the slapdash nature of the people who he was about to risk his life with. Maybe he was too laden with alcohol to take a sensible view, even more likely he thought it a good idea at the time and, his protective mantra was " nothing can go wrong, 'cos I'm on holiday." Nine times out of ten there was no problem, but those are only slightly better odds than Russian roulette.

The same lack of thought can happen on company away days, where risks are taken, often by the chief executive, with the whole management team, in the interests of bonding. There is usually no attempt to understand the risks and to get the team to find ways of mitigating them, there is just the focus on the goal of having a good time and there is sometimes an element of bullying . Directors who allow such thoughtless risk taking may find themselves faced with a corporate manslaughter charge if things go wrong. On holiday you're on your own.

Wednesday, 6 August 2008

Sounds familiar

Compare and contrast -

"It is clear that there has been a mispricing of risk.The Market did not understand the value or importance of liquidity and some banks did not fully understand some of the instruments they were dealing in."
Mervyn Davies, Chairman of Standard Chartered this week.

" A board that does not understand the strategy may not appreciate the risks, and if it does not appreciate the risks it will probably not ask the right questions to ensure the strategy is properly executed."
Justice Neville Owen in his summing up during the HIH bankruptcy case.