Mastering Catastrophic Risk: How Companies Are Coping with Disruption

Three Wharton professors, who previously coauthored Leadership Dispatches: Chile's Extraordinary Comeback from Disaster, take a thorough, if dry, look at risk management. They set the stage by noting that "given the increasing pace and scale of disruptive events," corporate leadership is under more pressure than ever to manage risk well. Executives and directors don't need to learn necessary lessons through experience, the book posits; through scenario planning exercises, they can learn from the mistakes of others and forestall their own crises. The authors interviewed more than 100 prominent figures from a variety of industries about their mistakes and corrective measures. The book works best at its most concrete-outlining the kinds of thought processes, such as an intuitive approach to calculating risk, that require radical change, and risk-management practices that can help, such as Dell's moves to diversify and monitor its supply chain after a 2001 flood in Bangkok shut down one of the company's main plants. The authors also helpfully highlight some major players, including Lufthansa and Deutsche Bank, that have used their mistakes to set up programs to avoid them in the future. Nonetheless, the focus on dramatic case studies does not compensate for the off-puttingly academic tone, and there are many easier-to-digest books on the same subject available. (June)