Probably a bit of both!
Reading a discussion on Linked In recently set me thinking. Someone working on their MSc asked whether risk management should be regarded as art or science. So I asked around the office.
The responses I got were not as clear cut as I’d imagined. Those involved very much on the technical side of product development here, mostly argued for science. Measuring what has happened in the past, logging events, cataloguing and building risk registers are all fact based and therefore seem to be more scientific. Collecting data from disparate sources, ensuring that it is in the same format for easy comparison, applying rules, policies, procedures is all clear cut and should be a science.
Talking to the risk practitioners though, I got a different response. Knowledge and experience are also very important, along with intuition. Identifying and defining an organisation’s risk appetite can be and should be supported by facts and figures, but ultimately someone needs to make a decision and this can only be made by seasoned professionals. Similarly, in an operational environment decisions often need to be taken quickly, and tend to be based on experience. All of which leans more to the art side.
Other more radical thinkers thought that it all depended on your definition of art and science, and that maybe this wasn’t the correct question. There was also an argument that risk management should actually be defined more as a discipline than either art or science.
Personally, I think it is a glorious mixture of both, you need the structure that only a scientific approach can bring to analyse what has gone before and learn from it. This is particularly true across a large enterprise. However, you need insight and imagination when thinking about what the future might bring, and of course you still need that human logic and instinct to make the right decisions in the right situation.
What do you think – we’d love to hear your insights – tweet us @ActiveRisk