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Risk Intelligence: Learning to Manage What We Don't Know, by David Apgar, 2006, Cambridge, MA: Harvard Business School Press. Pp. ix + 210. ISBN: 978-1-59139954-4
In Risk Intelligence: Learning to Manage What We Don't Know (2006), David Apgar develops a framework of risk management best practices for nonfinancial firms, based on his experience as a financial firm risk manager. Throughout the book, Apgar translates and applies financial risk management methods to general business risk management. Based on his research findings, Apgar asserts that by separating financial from nonfinancial risk management techniques, business managers will improve their decision-making processes, as well as the end results of their respective decisions in a world of growing risk and uncertainty.
Throughout Risk Intelligence, Apgar presents his arguments in a readable fashion toward the general business risk management audience, although others will certainly benefit from the ideas presented. Stories, examples, risk management theory, and bestpractice methodologies provide readers with an examination and critique of current risk management methods and provide steps for action to correct the flaws that currently exist in the methodology that is presently being employed in the world of business. In each chapter of the book, Apgar first presents a research question or problem, followed by an answer or solution as it relates to risk management methods for nonfinancial risk managers. The author clearly defines the terms and definitions presented in each chapter, gives examples to support his argument, and offers a solution that is both practical and theoretically sound. The logical manner in which the information is presented contributes to a greater understanding of the arguments presented and aids in the overall readability of the book.
In the first chapter, "Changing Your Approach to Risk," Apgar relates the story of a businessman who seemed to be randomly affected by both the start and the conclusion of the U.S. Civil War in order to illustrate the seemingly unpredictable and uncontrollable nature of risk. According to the author, even though risk may appear to be unpredictable and uncontrollable, it is in fact manageable. Apgar defines risk as "the possibility of a loss or reversal - or gain or advance - different from what we expect from a decision or an activity" (p. 11). But, equally as important...