"Elements of Risk Management: Insights and Ideas from Prospect Theory and Psychology"

Rashid N. Kapadia, DTM, PMP, is a speaker, project manager, engineer, consultant, and author of “Necessary Bridges: Public Speaking & Storytelling for Project Managers & Engineers”.

Today he is an evangelist for “Eloquence”, “Public Speaking, & Storytelling”, FLOW”, and for “Regular & Disciplined Reading”. Rashid is a lifelong student and an avid reader—committed to reading a minimum of 50 non-fiction books every year. He is constantly on the lookout for new knowledge that can be converted into speeches to solve problems and be used to uplift professionals and professions.

He was educated in both India and the U.S. and has earned multiple degrees and certifications. He has worked in the merchant marine, maritime and offshore industries as an engineer, manager, project manager, and in business development. In 2015 he published his book and founded Necessary Bridges, Inc.

Topic Synopsis:

In this talk, Rashid will look at some significant failures in business, international affairs, industry, and finance (Enron, 2008 Financial Crisis, Eisenhower U-2 crisis, Plane Crashes, Cuban Missile Crisis) and argue that these were also failures of risk management.

Rashid will then offer some approaches and new language from Prospect theory and Psychology (the domain of gains, the domain of losses, inattentional blindness, motivated blindness, slippery slope) to better understand and prepare for similar events.

He will discuss some of the work of “Decision Making” expert Max Bazerman about the Power of Noticing.

He will discuss some of the work of “Risk & Intuition” expert Gerd Gigerenzer about Intuition and Heuristics.

He will also offer solutions from business expert Jim Collins to help leaders, and managers to manage risk better.

He will close with an unusual argument that Risk Management is also an Unending Campaign and that it would be most worthwhile for leaders and risk managers to acquire skills in persuasion, (convince, charm, cajole) campaigning, and public speaking.

Learning Objectives:

1. Analyze huge failures from a different perspective

2. Be familiar with the basics of prospect theory and be able to discuss risk using some of the languages of prospect theory.

3. Appreciate elements of psychology, which subconsciously drive decision-making and inadvertently increase decision-making, business and project risks.

4. Introduce new language into risk management meetings and discussions: prospect theory, the domain of gains and the domain of losses, inattentional blindness, motivated blindness, and slippery slope.

5. Appreciate the advantages of also thinking intuitively and using heuristics.

6. Create a business and project culture where autopsies can be conducted without blame.

7. Create RED FLAG mechanisms, which turn information into “information that cannot be ignored”.

8. Appreciate anew that Risk Management is also an Unending Campaign.

PDU Triangle:

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