Risky Business: How Data Analytics Can Help
New Operational Risk Thinking Can Help Predict and Prevent Disasters of a Global Scale and Improve Bottom Lines as Well
In an interview with Renee Boucher Ferguson of the MIT Sloan Management Review, Kathleen Long discusses some of the threats operational risk can pose to a company and how her company, Montage Analytics, is helping businesses combat these dangers.
A socio-cybernetician and behavioral scientist, Kathleen Long battles operational risk. As CEO of Montage Analytics, a Mountain View, Calif., consultancy offering risk assessment software services and analytic reports, Long has combined her training with the experience of Montage Analyticâ€™s CTO, Doug Campbell, in Bayesian network design. The company helps organizations better understand and mitigate everything from risky business practices and employee fraud to the big, unwieldy, nearly undetectable risks referred to as â€śblack swans.â€ť
This isnâ€™t an easy undertaking. Part of the problem, according to Long, is that not everyone knows how to define operational risk (if you canâ€™t define it, you canâ€™t guard against it). At the same time, the risk landscape is changing so fast that what happened yesterday is no longer a marker for what might happen tomorrow.
â€śWe are living in unprecedented times. You canâ€™t say the past is a reliable predictor of the future,â€ť says Long. â€śToo many events happen that are black swans that come out of the blueâ€”Bernie Madoff, 9/11. Things have changed dramatically. And the fact that we are living in an increasingly globalized and networked world means that even small events happening somewhere on the other side of the world can quickly cascade around the globe and affect us in places we didnâ€™t expect.â€ť
Â© Massachusetts Institute of Technology
Read the full article on the MIT websiteÂ here.Â http://sloanreview.mit.edu/