Risk Thinking is a book about codifying common sense in a world of radical uncertainty. Our brains are wired to think forward, to imagine future situations, and to plan for the unknown. It is an ability engrained in our genetic software, but corporations and governments continue to rely on flawed forecasting to try and predict the unpredictable. This book advocates a new, more realistic approach to analyzing risk and strategizing-one that is less reliant on a single solution or unnuanced forecast. The approach is forward looking and accounts for the extreme events that may occur, and often do. It is one that uses the wisdom of a diverse set of experts whose views may be used to span the range of possible future events. They help us look for the situations that we cannot see, where the light does not shine. We use them to handle the radical uncertainty we face from climate change, pandemics, cyber and other radical risks. Risk Thinking gets us away from forecasting, which we know does not work as uncertainty becomes more extreme. It is as useful in everyday life as it is to make crucial decisions in business or government. This century is one of radical uncertainty. We hope risk thinking will enter the lexicon of all those whose decisions and strategy affect our lives.
About the Author
Ron S. Dembo has been an Associate Professor at Yale, visiting professor at MIT, consultant to Goldman Sachs and other large corporations and banks, and author. He founded Algorithmics, which he grew to become the largest supplier of enterprise financial risk systems to banks before it was sold to Fitch and then IBM. He has published many articles in scientific journals and is the author of numerous patents worldwide. He was made a lifetime fellow of The Fields Institute of Mathematics in 2007 for his contribution to Canadian mathematics and has received many awards for his work in optimization, risk management and climate change. He is the founder and CEO of Riskthinking.AI, which produces data and analytics for measuring climate related financial risk.