Learn about Monte Carlo Simulation, Decision Trees, Risk and Return Spectrum, Scenario Analysis and Lessons Learned, Business Impact Analysis, PERT, Sensitivity Analysis, Data Analysis. Horizon Scanning

1. 10 risk tools to use
before you die
Prof. Hernan Huwyler, MBA CPA

2. IE, top global MBA

3. Simulations of 10,000 scenarios with
multiple random variables to see the
distribution of all possible outputs
1Monte Carlo Simulation
Calculate reserves for non-compliance
Estimate potential profits in a future contract
Estimate default provisions

4. Flowchart with expected chances and
financial outcomes of alternatives with
their expected monetary values
2 Decision Tree
Set the strategy in legal cases
Decide how much to invest in corporate defense
Select the best investment alternative

5. Comparison of expected profits
against costs and liabilities in
investment projects
3 Risk Return Spectrum
Determine bidding prices
Diversify investments
Support a go/no-go decision in due diligences

6. Assessment of future events by
considering alternative possible
outcomes
4 Scenario Analysis
Prepare business continuity plans
Analyze what-if scenarios in legal proposals
Forecast impacts of observable threats

7. Assessment on how the disruption of a
critical process affects the business
5Business Impact Analysis
Prepare protocols for disasters and crisis
Set when service disruptions are not tolerable
Determine response strategies
Negotiate liability clauses

8. Assessment of best, most probable
and worst outputs with the
(best+base*4+worst)/6 formula
6 PERT
Program Evaluation and Review Technique
Assess losses for claims and compensations
Estimate the duration of tasks
Evaluate reasonableness of contractual
requirements

9. Assessment of the relationship
between input and output variables
7 Sensitivity Analysis
Prepare a tornado chart to assess importance
of variables
Identify the sources of risks in the assumptions
Design controls for executing a business plan

10. Review of historical information on risk
events to prevent reoccurrence
8 Lessons Learned
Analyze compliance breaches databases
Reduce customer complaints and disputes
Review of non-conformances in inspections

11. Query of data bases to identify
trends and distributions
9 Data Analysis
Validate data used for planning assumptions
Calculate key risk indicators
Identify different types of distributions

12. Outlook of early signs of potential
threats and opportunities
10 Horizon Scanning
Set commercial, innovation, growth and legal
strategies
Prepare for disruptors for business plans

13. Impact estimation of drastic worst
scenarios, usually in the macro
economy
Stress Testing
Calculate capital holdings for a portfolio
Assess hedging coverage levels
Estimate probabilities of credit defaults

14. They only have risk matrices (also known as heat
maps) based on opinions and debunked by science
Choose your side
Charlatans
They have a complete data-driven tool box
for different decision-making situations
Risk managers

15. Our

16. Case method