A board or a CEO that is too cautious may do as much harm as one that is reckless.
It’s called a “Goldilocks Zone.” Planets have them. Sand dunes have them. NASCAR drivers, too. That narrow range between too much and not enough. Find it, and great things begin to happen.
It’s a startling question. The answers provide critical guidance for risk management, strategic planning, writing governance policies.
In their Harvard Business Review article Managing Risks: A New Framework, Robert S. Kaplan and Anette Mikes provide three qualitative distinctions among the types of risk organizations face. Two of these categories, preventable risks and strategy risks, are internal to the organization and so are within the control of the leadership. The third category includes risks from external sources; leadership may not control the risks, but they can prepare for them. Here’s how.
Young Hornblower did everything right — given what he knew. But he failed to get the key piece of data that might have saved his ship.