Date posted: 29/01/2021 5 min read

How to think fresh

The recent past upended a lot of conventional business ideas, so sharpen your thinking with these CA Library resources.

In Brief

  • In “The Failure of Risk Management”, Douglas Hubbard looks at how quantitative methods should be used to monitor and respond to risks.
  • Other resources examine the concept of “humanocracy” and how to deal with government debt through modern monetary theory.
  • All CA Library resources are free for CA ANZ members to borrow, excluding the costs of returning.

Reviews Paul Robinson

The Failure of Risk Management: Why it’s broken and how to fix it

By Douglas W Hubbard (Wiley)

The Failure of Risk Management: Why it’s broken and how to fix itUncertainty implies risk and the job of risk management is to deal with it. In this revised and updated second edition of his book (the first was in 2012), Douglas Hubbard argues that many conventional qualitative risk management techniques simply don’t work.

To illustrate the “crisis in risk management”, he cites the 1989 crash of United Airlines Flight 232. That accident was attributed to a single event – a damaged turbine – that caused three separate hydraulic systems to fail simultaneously. The probability of this triple failure was estimated at less than one in a billion.

But the turbine collapsed because it hadn’t been inspected properly and the probability estimate hadn’t considered human oversight. Weak risk management had huge consequences.

Hubbard’s solution is to use quantitative methods based on mathematical models, simulations and the collection of evidence and data.

He argues that without sound quantitative measures, many commonly used risk management methods can be subject to flawed perceptions (cognitive bias) and overconfidence.

After examining the state of risk management practice in the wake of the global financial crisis, Hubbard comes down firmly on the side of calibrated probabilistic modelling, and emphasises the importance of creating an organisation-wide approach.

In practice, he advises risk managers to implement four key measures: identify deficiencies in your current strategy and fix them; employ a calibrated approach using current statistical tools; use accurate quantitative risk analysis and modelling; and keep up with new developments – “a risk that is not even on the radar cannot be managed at all”.

The Future is Faster Than You Think: How converging technologies are transforming business, industries and our lives

By Peter H. Diamandis and Steven Kotler (Simon & Schuster), also an audiobook

The Future is Faster Than You Think: How converging technologies are transforming business, industries and our livesThis is the practical guide you need for the accelerating tech revolution. Peter Diamandis and Steven Kotler assess how the convergence of successive waves of exponentially accelerating technologies (doubling in power while regularly dropping in price) will disrupt industries and our lives in years to come.

The book examines technologies currently on exponential growth curves – such as quantum computing, artificial intelligence, robotics, sensors, 3-D printing and augmented reality – and what may be coming to market. It looks at major industries such as retail, energy, transport, health care and finance to show how they will be transformed by this technology during the coming decade, and evaluates corresponding risk. The demise of the middleman and corresponding rise in consumer power are already becoming realities.

The authors predict “five great migrations” across the next century – initially driven by economics and climate change, then into space and the virtual world – and analyse how these will solve problems and accelerate innovation even further.

Humanocracy: Creating organizations as amazing as the people inside them

By Gary Hamel and Michele Zanini (Harvard Business Review Press), also an audiobook

Humanocracy: Creating organizations as amazing as the people inside themIn a world with many crises – coronavirus, climate change, geopolitical instability and wealth inequality – “business thinker” Gary Hamel argues organisations should be restructured to be “resilient, creative and passionate”.

Yet, in a time of accelerating global change, the existing bureaucratic red tape and industrial-age thinking are encouraging an incremental inertia that Hamel labels “inhuman”, reducing flexibility, innovation and transparency.

Hamel and co-author Michele Zanini, co-founder of The Management Lab, argue for a triumph of humanocracy over bureaucracy. Drawing on years of research and practical examples, they lay out a blueprint for organisations to become as inspired and smart as the people working in them.

The authors flag five steps companies can take.

  • Assess what your old business model is costing you.
  • Learn from successful organisations at the forefront of new ideas – they don’t need multiple management tiers.
  • Maximise human contribution and impact by focusing on newer principles such as meritocracy, experimentation and openness rather than traditional ones such as standardisation and specialisation.
  • Teach people to hack outmoded processes and systems to eliminate bureaucracy –“effective change is going to roll up, not down”.
  • Finally, start small and encourage innovation.

Lead From the Future: How to turn visionary thinking into breakthrough growth

Lead From the Future: How to turn visionary thinking into breakthrough growth

By Mark Johnson and Josh Suskewicz (Harvard Business Review Press), also an audiobook

A different kind of leadership is needed in these uncertain times, including the ability to turn vision into action. But how is that done? This ebook offers new ways of managing and presents a systematic approach to overcome barriers to change and look beyond short-term planning.

Blockchain, Artificial Intelligence and Financial Services: Implications and applications for finance and accounting professionals

By Sean Stein Smith (Springer Nature)

Blockchain, Artificial Intelligence and Financial Services: Implications and applications for finance and accounting professionalsWhat impact will technology really have on financial services? Sean Stein Smith analyses the implications of these new technologies and provides an action plan for professionals to apply them in financial and accounting organisations.

Harvard Business Publishing ebook collection

CA ANZ members have unlimited access to HBR business ebooks through CA Library. Whether you are after a quick dive into an article collection or thought leadership ebooks on a wide range of business topics, members can now tap into the biggest ideas in business from one of the world’s most respected publishers. Simply search ‘HBR’ or ‘Harvard Business’ in the CA Library catalogue.

LISTEN

The Innovation Stack: Building an unbeatable business one crazy idea at a time

By Jim McKelvey (Portfolio), audiobook

The Innovation Stack: Building an unbeatable business one crazy idea at a timeWhat does it take to come up with an innovative idea? This is an inspiring and humorous account of what it means to be an entrepreneur and create a sustainable business. McKelvey looks at groundbreaking companies such as credit card start-up Square and others.

Burnout to Breakthrough: Building resilience to refuel, recharge, and reclaim what matters

By Eileen McDargh (Berrett-Koehler), audiobook

Burnout to Breakthrough: Building resilience to refuel, recharge, and reclaim what mattersBurnout – exhaustion from chronic workplace stress – was recognised as a medical diagnosis by the World Health Organization in 2019. This audiobook has a survey to evaluate your resilience and provides strategies to avoid or treat burnout.

WATCH

Debunking the Deficit Myth

Stephanie Kelton(Town Hall Seattle), video run time: 59 mins

Debunking the Deficit MythWith every country in the world now saddled with extraordinary levels of debt, Stephanie Kelton, Stony Brook University economics professor and author of The Deficit Myth, makes a compelling argument to solve debt with modern monetary theory, which includes nations printing more money to pay the bills.

Available from the CA Library

All resources featured are available for members to download from the library catalogue. Access to electronic resources – ebooks, audiobooks and online articles – and the library’s research service is free to members.

The CA Library also offers tools, templates and resources tailored to both public practitioners and members in the corporate sector.

Members can also use the CA Library to access EBSCO, an online journal database that includes accounting, business and management journals such as Harvard Business Review and Strategic Finance, and newspapers such as The Australian Financial Review.

Visit: library.charteredaccountantsanz.com

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Audiobooks at the CA Library

Check out the CA Library audiobook offerings at charteredaccountantsanz.overdrive.com