This is excellent advice and widely applicable. I'm definitely stealing "Managing your risk budget".
That said, I find it important to also consider where risk implies inevitable failure. You need not only manage your risk budget, but also your failure budget. Let me explain:
Risk is a collective concept. Individuals anticipate risk, but see realized success and failure. Collectives see realized rates of success. In that sense, if there is any risk, there is bound to be some failure. Failure is not always negative, it also generates knowledge! This is essential to avoid future risks.
How do we handle this?
- Normalize talking about failure. Document failure.
- Don't stigmatize individuals for bearing risk and failure that is necessary to the organization.
- Create support structures that enable individuals to reason about failure.
- Create visibility so everyone learns from others' failures.
That said, I find it important to also consider where risk implies inevitable failure. You need not only manage your risk budget, but also your failure budget. Let me explain:
Risk is a collective concept. Individuals anticipate risk, but see realized success and failure. Collectives see realized rates of success. In that sense, if there is any risk, there is bound to be some failure. Failure is not always negative, it also generates knowledge! This is essential to avoid future risks.
How do we handle this?
- Normalize talking about failure. Document failure.
- Don't stigmatize individuals for bearing risk and failure that is necessary to the organization.
- Create support structures that enable individuals to reason about failure.
- Create visibility so everyone learns from others' failures.