Book Review: Operational Risk Management by Mark Abkowitz

Dave Kinnear1-On Leadership, Book Reviews

Abkowitz has compiled an impressive number of high profile case studies to illustrate our need to pay attention to the risks we have in our business operations, and for that matter, our personal lives. But unlike the multiple points of view found in the Harvard Business Review case studies, Abkowitz provides definitive analysis of “what went wrong” and allows us to see clearly what we might do in our own organizations to minimize operational risk.

This excellent book is broken into Four Parts, comprising several chapters each. Those parts are; Man Made Accidents, Terrorist Acts, Natural Disasters, and Success Stories. Then the final chapter brings things together in “Lessons Learned,” while the epilogue gives us some ideas on where we might go from here.

Abkowitz notes in chapter one that there are 10 basic risk factors he considered: Design and construction flaws, Deferred maintenance, Economic pressure, Schedule constraints, Inadequate training, Not following procedures, Lack of planning and preparedness, Communication failure, Arrogance, and Stifling political agendas. Based on these, he analyzed many major disasters, summarized the results and gleaned some interesting lessons from the analysis.

There were 12 “Lessons Learned” presented based on the 10 risk factors spelled out in chapter one. The 12 lessons are:

  1. Risk factors work together to generate an event with disastrous consequences
  2. Communication failure is a risk factor in every disaster, irrespective of whether the event is caused by accident, intentional act, or nature
  3. Take planning and preparedness seriously; it should never be short-changed
  4. Economic pressure is a chronic problem that appears as a risk factor in most man-made accidents and natural disasters and in some intentional acts
  5. Not following procedures is a significant problem in man-made accidents, and is also present in some natural disasters and intentional acts
  6. Design and construction flaws are the bane of man-made accidents
  7. Co not underestimate the significance of political agendas in creating high-risk situations
  8. Arrogance among individuals and organizations is perhaps a far more significant risk factor than previously imagined
  9. The lack of uniform safety standards across different nations creates an uneven risk management playing field, conditions ripe for exploitation
  10. Regardless of how well risks are being addressed, “luck” can change your fortunes one way or another
  11. It usually takes a disastrous event to convince people that something needs to be done
  12. Risk cannot be entirely avoided; nothing can be designed or built to perfection, nor last forever

This book will be invaluable for those times when I’m searching for examples of why our organization needs to make a change. It should serve as a warning to all our leadership in private and public organizations that we must pay attention to and encourage proper planning and expenditures to mitigate our organizational risk.

Click to view at Amazon.