The Seven Ages of the Leader by Warren Bennis

Reading HARVARD BUSINESS REVIEW on THE MIND OF A LEADER is like attending one whole seminar on leadership with leading gurus as trainers. It tells about Leadership—Warts and All, When Followers Become Toxic, Putting Leaders on the Couch: A Conversation with Manfred F.R. Kets de Vries, Managers and Leaders: Are They Different, What Makes a Leader?, Narcissistic Leaders: The Incredible Pros, the Inevitable Cons and Understanding Leadership. And they were written by respected experts such as Barbara Kellerman, Lynn Offerman, Diane Coutu, Abraham Zalesznik, Daniel Goldman, Michael MacCoby and W.C.H. Prentice. Get a copy and learn a lot about leadership. What I am missing is some kind of self-assessment instrument. Well, maybe in a real seminar.

Intriguing is The Seven Ages of the Leader by Warren Bennis. In this intuitive article, Prof. Bennis, founding chairman of the University of Southern California's Leadership Institute, reflects on his own leadership journey from a young lieutenant in the infantry in World War II, as president of a university and as the mentor to a unique nursing student and also shares the experiences of his fellow leaders.

A leader's life has seven ages and they parallel those Shakespeare describes in "As You Like It." To paraphrase, these stages can be described as infant, schoolboy, lover, soldier, general, statesman, and sage. One way to learn about leadership is to look at each of these developmental stages and consider the issues and crises that are typical of each.

Infant. For the young man or woman on the brink of becoming a leader, the world that lies ahead is a mysterious, even frightening place. The fortunate neophyte leader has a mentor. The popular view of mentors is that they seek out younger people to encourage and champion, in fact the reverse is more often true. The best mentors are usually recruited and one mark of a future leader is the ability to identify, woo, and win the mentors who will change his or her life. It may feel strange to seek a mentor even before you have the job, but it's a good habit to develop early on. Recruit a team to back you up; you may feel lonely in your first top job, but you won't be totally unsupported.

The schoolboy, with a shining face. The first leadership experience is an agonizing education. It's like parenting, in that nothing else in life fully prepares you to be responsible, to a greater or lesser degree, for other people's well-being. Worse, you have to learn how to do the job in public, subject to unsettling scrutiny of your every word and act, a situation that's profoundly unnerving and for all but minority of people who truly crave the spotlight. Like it or not, as a new leader you are always onstage, and everything about you is fair game for comment, criticism, and interpretation (or misinterpretation). Your dress, your spouse, your table manners, your diction, your wit, your friends, your children's table manners—all will be inspected, dissected and judged. Your first acts will win people over or they will turn people against you, sometimes permanently. And those initial acts may have a long-lasting effect on how the group performs. It is, therefore, almost always best for the novice to make a low-key entry.

The Lover, with a woeful ballad. Many leaders find themselves "sighing like furnace" as they struggle with the tsunami of problems every organization presents. For the leader who has come up through the ranks, one of the toughest is how to relate to former peers who now report to you. It is difficult to set boundaries and fine-tune your working relationships with former cronies. As a modern leader, you don't have the option of telling the person with whom you once shared a pod and lunchtime confidences that you know her not. But relationships inevitably change when a person is promoted from within the ranks. You may no longer be able to speak openly as you once did, and your friends may feel awkward around you or resent you. They may perceive you as lording your position over them when you're just behaving as a leader should. Knowing what to pay attention to is just as important—and just as difficult. The challenge for the newcomer is knowing who to listen to and who to trust.

The Bearded Soldier. Over time, leaders grow comfortable with the role. This comfort brings confidence and conviction, but it also snap the connection between leader and followers. Two things can happen as a result: leaders may forget the true impact of their words and actions, and they may assume that what they are hearing from followers is what needs to be heard. The scrutiny never really ends. Followers continue to pay close attention to event he most offhand remark, and the more effective the leader is the more careful he or she must be, because followers may implement an idea that was a little more than a passing thought. Followers don't tell leaders everything. A second challenge for leaders in their ascendancy is to nurture those people whose stars may shine as brightly as—even brighter than—the leaders' own. In many ways, this is the real test of character for a leader. Many people cannot resist using a leadership position to thwart competition. Authentic leaders are generous.

The General, full of wise saws. One of the greatest challenges a leader faces at the height of his or her career is not simply allowing people to speak the truth but actually being able to hear it. A current example can be seen in Howell Raines, the deposed executive editor of the New York Times. Among the many ways he blocked the flow of information upward was to limit he pool of people he championed and, thus the number of people he listened to. Raines was notorious for having a small A-list of stars and a large B-list made up of everyone else. The two-tier system was unwise and ultimately a career-ender for Raines. His attitude and of his managing editor was that their way was the only way. He should have been a good enough newsman to be able to tell the difference between acceptance and angry silence on the part of those who worked for him.

The Statesman, with spectacles on nose. Shakespeare's sixth age covers the years in which a leader's power begins to wane. The leader in this stage is often hard at work preparing to pass on his or her wisdom in the interest of the organization. The leader may also be called upon to play important interim roles, bolstered by the knowledge and perception that come with age and experience and without the sometimes distracting ambition that characterizes early career. One of the gratifying roles that people in late career can play is the leadership equivalent of a pinch hitter. A leader is able to perform an even better job because he or she brings a lifetime's worth of knowledge and experience but also he or she didn't have to waste time engaging in the political machinations often needed to advance a career.

The Sage, the second childishness. "When you mentor, you know that what you have achieved will not be lost, that you are leaving a professional legacy for future generations. The reciprocal benefits of such bonds are profound, amounting to much more than warm feelings on both sides. Mentoring isn't a simple exchange of ideas. Neuroscientist Robert Sapolsky lived among wild baboons and found that alliances between old and young apes were an effective strategy for survival. Older males that affiliated with younger males lived longer, healthier lives than their unallied peers. Age is neither end nor oblivion. Rather, it is the joyous rediscovery of childhood at its best. It is waking up each morning ready to devour the world, full of hope and promise. It lacks nothing but the tawdrier forms of ambition that make less sense as each day passes.

Indeed, there is a time for everything and a thing for particular times. The important take away from this article is that leadership is a journey, not a destination. Everything changes, in time. As a true leader, we need to know when our time is up and how to exit graciously.

5 Books on Leadership

BUSH-ISMS: President George Herbert Walker Bush, in his own words
Compiled by the editors of The New Republic
(Workman Publishing, 1992)

THE NATURE OF LEADERSHIP: Reptiles, mammals, and the challenge of becoming a great leader
By B. Joseph White with Yaron Prymes
(Amacom, 2007)

Harvard Business Review on THE TESTS OF A LEADER
Harvard Business School Press, 2007)

LEAD LIKE JESUS: Lessons from the Greatest Leadership Role Model of All Time
By Ken Blanchard and Phil Hodges
(W Publishing Group, 2005)

NANOCOSM: Nanotechnology and the big changes coming from the inconceivably small.
By William Illsey Atkinson
(Amacom, 2005)

Here are some quotes from former President Bush and you will know from whom the current President Bush got his communication flair.

“We’re enjoying sluggish times, and not enjoying them very much.”

“Thank you all very much. And let me just say this, on a personal basis. I’ve screwed up a couple of times here and I’m very grateful for your assistance in straightening it out. God, I’d hate to have had some of those answers stand.” (8/8/90)

“I think that in politics there are certain moral values. I’m one who—we believe strong in separation of church and state, but when you get into some questions, there are some moral overtones. Murder, that kind of thing, and I feel a little, I will say, uncomfortable with the elevation of the religion thing.” (Bush explains his position on church-state issues this way, “We don’t believe in denominationally moving in.” 9/16/84)

“I saw a story yesterday that I went a little ballistic—which is only part true—semi-ballistic.” (12/16/88)

“I’m for Mr. Reagan—blindly.” (11/1/84)

“I know what I’ve told you I’m going to say, I’m going to say. And what else I say, well, I’ll take some time to figure that out—figure that out.” (at a joint press conference with Uruguay President Louis Alberto Lacalde, on the message he was planning to deliver to Iraqi Foreign Minister Tariq Aziz. Later, asked if there were room for a face-saving measure, Bush was adamant: “I don’t care about face! He doesn’t need any face!” 12/4/90)

“Fluency in English is something that I’m often not accused of.” (at a White House dinner. Despite his lack of fluency, however, the president insists on controlling the content of his speeches. “inarticulate as though I may be.” 6/6/89)

“You cannot be president of the United States if you don’t have faith. Remember Lincoln, going to his knees in times of trial and the Civil War and all that stuff. You can’t be. And we are blessed. So don’t feel sorry for—don’t cry for me, Argentina.” (1/15/92)

“The democrats want to ram it down my ear in a political victory.” (10/31/91)

”It has been said by some cynic, maybe it was a former president, ‘If you want a friend in Washington, get a dog.’ We took them literally—that advice—as you know. But I didn’t need that, because I have Barbara Bush.” (3/30/89)

“All I was doing was appealing for an endorsement, not suggesting that you endorse it.” (2/3/92)

“I was shot down, and I was floating around in a little yellow raft, setting a record for paddling. I though of my family, my mom and dad, and the strength I got from them. I thought of my faith, the separation of church and state.” (12/5/87)

Hahahahahahahahaha Who says that Americans, and their Yale alumnus President, speak good English?

When I met Bob Pike and his lovely wife in Taipei, Taiwan, last September, he was all praises for their new leadership program Lead Like Jesus with Ken Blanchard. And as he promised, he sent me a copy of the book.

Author Blanchard writes:
The term leader is mentioned only six times in the King James Version of the Bible, while the term servant is mentioned more than nine hundred times. That fact highlights the third distinction between a self-serving leader and a servant leader: who leads and who follows? Self-serving leaders think they should lead and others should follow. Servant leaders, on the other hand, seek to respect the wishes of those who have entrusted them with a season of influence and responsibility.

Throughout His life and leadership, Jesus affirmed that God is not looking for leaders but for servants who will let Him be the Leader and who will focus first on the Kingdom of God. When God came to Abraham, God had the plan and Abraham was instructed to carry it out according to God’s promise. When God came to Mary, she surrendered to God’s will and undertook the role of servant leader with her infant son. When God came to Paul, God had a plan that this passionate man spent the rest of his life fulfilling through his leadership and witness to the Gentiles. When God was the leader and these faithful people were the servants, His plan was effectively accomplished.

On the other hand, whenever we become the leader and try to make God the servant, things don’t work out. Why? Because our EGO gets in the way, and we Edge God Out! If you want your life to be significant, then you have to recognize that it’s all about God, not about you. As the old Yiddish saying goes, “If you want to make God laugh, tell Him your plans.”

We are negotiating to bring the duo of Pike and Blanchard here to do their Lead Like Jesus Program. Abangan!

The executive summary of the article “What to Ask the Person in the Mirror” of this HBR book on leadership reads:

Every leader gets off track from time to time. But as leaders rise through the ranks, they have fewer and fewer opportunities for honest and direct feedback. Their bosses are no longer monitoring their actions, and by the time management missteps have a negative impact on business results, it’s usually too late to make course corrections that will set things right. Therefore, it is wise to go through a self-assessment, to periodically step back from the bustle of running a business and ask some key questions of yourself.

Author Robert S. Kaplan, who during his 22-year career at Goldman Sachs chaired the firm’s senior leadership training efforts and co-chaired its partnership committee, identifies seven areas for self-reflection: vision and priorities, managing time, feedback, succession planning, evaluation and alignment, leading under pressure, and staying true to yourself. The author sets out a series of questions in each of the areas, illustrating the impact of self-assessment through vivid accounts of real executives.

Although the questions sound simple, people are often shocked—even horrified—by their own answers. Executives are aware that they should be focusing on their most important priorities, for instance, but without stepping back to reflect, few actually know where they are allocating their time. Kaplan advocates writing down what you do every working hour for a week and checking how well your actions match up with your intentions. As for feedback, managers should ask themselves whether they’re getting truthful evaluations from their subordinates (in all likelihood, they aren’t). It takes time and discipline to persuade your employees to tell you about your failings.

This HBR collection has other instructional articles like Becoming the Boss, Courage as a Skill, The CEO’s Second Act, Moments of Truth: Global Executives Talk about the Challenges that Shaped Them as Leaders, How Leaders Create and Use Networks, When a New Manager Takes Charges and Leading Change. Go get a copy.

Nanotechnology has always intrigued and amazed me no end. Rick Smally write in his Foreword:

Real nanotechnology isn’t about physical immortality, or killer nanobots, or waking up dear dead Auntie Flo from her long nap in the freezer. Real nanotechnology is more amazing than any pipe dream. It is closing in on structural materials stronger than anything we’ve know; on computers the size of molecules; on complete diagnostic laboratories smaller than your thumbnail; on ways to painlessly cook cancer cells to death; on buildings that stay up despite storms, earthquakes and attacks. Set pulp fiction aside. The genuine nanocosm has sci-fi beat six ways to Sunday.

Author Atkinson writes:

Nanoscience has recently made such staggering gains that it is undeniably on the bring of a true nanotechnology. We have now mapped enough of the nanocosm to let us make educated guesses about the type of world it will soon support. These estimates range from the merely surprising to the wig-flipping outrageous. Some very big changes in business and leisure are about to come to us by way of the very small.

The world is shrinking and lots of things are becoming portable and affordable—thanks to nanotechnology. Remember those monstrous computers that required whole buildings to house them and two-ton battery pack for cell phones of years ago? Now, computers and cell phones are getting smaller and smaller and smaller—thanks to nanotech. Tomorrow, we might not even need to carry them, we could implant them somewhere in our body. Think of a camera implanted at the tip of your index finger—now you can take pictures of anything, anywhere. Scary, but exciting!

What are the implications of nanotechnology for future leaders? Smaller leaders? Hahahahahahahaha

4 Books on Going Out-of-the-Box for Results

THE DISNEY WAY
By Bill Capodagli and Lynn Jackson
(McGraw-Hill)

BUSINESS LEADERS & SUCCESS
By 55 Top Business Leaders
With an introduction from William J. O’Neil
Founder of Investor’s Business Daily

The Book of NO
By Susan Newman, Ph.D
(McGraw-Hill)

WORDS THAT SELL
By Richard Bayan
(McGraw-Hill)

Every time I go to the USA, I am drawn to the theme parks of Walt Disney Company. Disney, indeed, explores beyond and delivers results. There is always something new in their facilities or they seem to be always new. So there is always a sea of young and young-once moving in a pattern around the park.

“Peter Drucker once said, ‘When you see a successful business, someone once made a courageous decision.’ Those who have prospered despite a pathway of obstacles have done so with an inner compass that steers their course: deeply held values that have crystallized and led them to achieve tangible results. Walt Disney, the great storyteller and innovator, had such a compass that defined his enviable empire. His four steps were simple:

1. Dream beyond the boundaries of today.
2. Believe in sound values.
3. Dare to make a difference.
4. And then just go out and do it: Dream, Believe, Date, Do.

“Walt Disney explained his success this way: I dream, I test my dream against my beliefs, I dare to take risks, and I execute my vision to make those dreams come true.

“Dream, Believe, Dare, Do. These words reverberates across the decades of Disney achievement. Everything Walt did—every choice he made, every strategy he pursued—evolved from these four principles.”

In subsequent pages of this paperback, the authors shared the details of Walt’s four steps. Easy read and usable ideas.. Last word from him: “We keep moving forward, opening new doors, and doing new things, because we’re curious and curiosity keeps leading us down new paths.”

Among the top business leaders who shared their success in this book are: media innovator Oprah Winfrey (staying positive helped her climb to the top); publisher Katharine Graham (built her career on persistence and integrity; Paychex’s Thomas Galisano (built business by hiring for guts instead of know-how); Barney creator Sheryl Leach (relied on common sense to help her build a purple empire); aviation pioneer William Boeing (in building his empire, he bowed to just one authority); Nvidia’s Jen-Hsun Huang (his laserlike focus helps keep his company on top); IGT’s Charles Mathewson (relationship-building helped him win big); Nokia’s Jorma Ollila (with innovation and insight, he made his company no. 1 and Starbuck’s Howard Schultz (kept his passion as fresh as the morning coffee).

Let’s focus on 99 Cents Only Stores’ David Gold and how he ignored status quo to break new retailing ground. “Gold’s success story reads something like those of other retailers. He works hard, finds and sells products with good value and focuses on serving customers. But the parallels stop there.”

He was sure that he needs dedicated, loyal employees to grow his company in the healthiest way. So Gold decided award options to every member of his stores. “The one thing that gratifies our family the most is that every single employee gets stock options after six months whether they’re part time or full time. The firm granted options worth 985,444 shares to employees in 1999 alone. No options went to Gold, his two sons, Howard and Jeff, or the president and Gold’s son-in-law, Eric Schiffer. The options hold the potential to enrich each employee, and they also inspire a company-wide drive to succeed.”

On the other hand, Intel co-founder Robert Noyce thought the best way to make a leap forward was to give talented people the tools they needed and then get out of the way. He saw his job as: “People come here because of their abilities. My job is to remove all impediments to progress and give them as much freedom as possible. Optimism is an essential ingredient for innovation. How else can the individual welcome change over security, adventure over staying in safe places?”

Very engaging and inspiring read.

To move forward, we need to say NO!, mean it and stop pleasing people forever so says Dr. Newman. Let’s examine these examples, The Scenario 1: “I have another question. Do you have a minute?” What’s going on here: It’s not yet noon and the guy in the next cubicle has been in yours four times with different questions on the same problem. As this point you want to say, “Just leave it on my desk and I’ll do it.” Don’t!

Response: “Work with the information you have and we’ll talk later.”

Alert: You have to take a strong stand in order to get your own work done and not be manipulated into doing someone else’s work.

The Scenario 2: You boss says, “A new client, a rush job. Can you take it on? What’s going on here? You can feel the weight of the job as soon as the question hits your ears. You can’t imagine squeezing in one more client, and a rush job to boot. Before answering think about what’s on your plate already and if this new client may or may not move you in the direction of your goals.

Response: “Not me, not unless you take me off several projects.”

Alert: When you carry a full load, doing more doesn’t necessarily equate to increased job security. It will, however, greatly add to your anxiety and exhaustion.

Sounds familiar? Dr. Newman has 248 other examples of how to say no with friends, family, really difficult persons and at work. Read the examples, try them and live and work in peace.

Many times the reason we couldn’t move ahead is the negative words in our vocabulary that condition our minds to act and think negative. Author Bayan put together more than 6,000 words and phrases to help you promote your products, services and ideas.

For example, instead of the usual new/advanced, use just published, just released, now available, fresh, sleek new, shiny new, newly minted, amazing new, bold new, innovative, ultramodern,, starling, futuristic, revolutionary, groundbreaking, breakthrough, the next generation of and many others. Hmmm, cutting edge!

For the word suitable, you could use a perfect match, ideally sized, it’s the real you, mirrors your, a welcome addition to your collection, designed to suit your needs, the ultimate in versatility, etc. Try feisty, gutsy, scrappy, sharp, astute, shrewd, potent, daring, forceful, goes the distance, commanding and masterful to mean competitive.

Wow, amazing words that make perceiving and thinking easy. This book is handy reference for when you are stuck with a word and kept repeating it monotonously in the same page.

5 Books on Managing Change

MANAGING IN TIMES OF CHANGE
By Michael D. Maginn
(McGraw-Hill Professional Education)

WHEN CHANGE COME UNDONE WHAT WILL YOU DO?
Harvard Business Review
(Harvard Business School Press)

LEADING THROUGH CHANGE
Harvard Business Review
(Harvard Business School Press)

MANAGING THE DYNAMICS OF CHANGE
By Jerald M. Jellison, Ph.D.
(McGraw-Hill Companies)

THE ESSENTIALS OF RISK MANAGEMENT
By Michel Crouhy, Dan Galai and Robert Mark
(McGraw-Hill Companies)

Author Maginn defines organizational change as “when the organization is moved from the status quo to something different. “From-to” is the change.” He writes that whether a company is on the upside of the growth curve or fighting to survive, one thing is common: The people working within those organizations are experiencing change in a very personal way. “Employees have to stop what they have been doing and work in different ways with different—or fewer—team members. They may have to work away from home more frequently or move to another facility in a strange, new city. They have to work with new technologies that require new skills, say new things to customers, meet with each other more or less frequently, or do more with less.”

“When people face these kinds of dramatic changes in the way they live and work, the reaction can be negative and unproductive. What had been predictable and stable at work is now replaced by confusion, vagueness, and uncertainty.

“When change affects an organization, the leaders of the organization—from the top executive to line supervisors—need to demonstrate leadership skills as never before. The managers of an organization provide the bridge from the old way of doing things to new work practices. Paradoxically, these managers are also employees who experience the same reactions as anyone else. How can a leader lead when he or she may be uncertain and uncomfortable about the future?”

What comes to mind is the quote,¨ “I can’t change the direction of the wind, but I can adjust my sails.”

A few of Maginn’s suggested 24 tools for managers, individuals and teams are: understand the “from-to,” choose a productive response; paint a picture of what’s happening; Build new rules for a new game; squash the rumor mill; and customize help for struggling individuals. Pick up a copy of the book and read the interesting and useful details.

On the other hand, HBR on When Things Come Undone offers six fictional case studies on change. One case goes:

“C.J. Albert, the head of family owned Armor Coat Insurance, is just settling in on a Sunday evening when he receives an unsettling phone call from his star salesman. Fifty-two-year-old Ed McGlynn has just returned from a business dinner with his younger technology mentor, and he’s none too happy with the way he’s being treated. If C.J. doesn’t take this attack dog off him, Ed warns, he’s gone.

“C.J. had indeed assigned 28-year-old Roger Sterling—the company’s monomaniacal, slightly anti-social director of e-commerce—to teach Ed about digital strategy and the Web. Reverse mentoring seemed like a good way to create a digital insurance that would allow Armor Coat to keep up with its competitors.

“But there’d been tension between Ed and Roger right from the start—stemming from their personalities and their two departments. So when the two reluctantly agreed to meet for dinner to talk, their conversation didn’t go well. Ed insisted that great sales reps, not the internet, are crucial to selling insurance. Roger insisted that the Web will revolutionalize the way insurance is sold and distributed—that Ed either give in or move on. Ed took off in a huff and subsequently phoned C.J. Roger followed Ed’s irate call with his own weary ultimatum: “Either Ed goes or I go.’

“C.J. faces some difficult Monday morning discussions with both disgruntled parties. What should he do? Six commentators offer their advice to this case.”

As Woodrow Wilson once said, “If you want to make enemies, try to change something.”

What, indeed, would you do? Think about it given the context of your organization and compare your answers with those of the commentators. Or simply look up the answers of the commentators; get a copy of this Harvard Business Review book. The other case studies in the book are The best-laid plans, Welcome aboard (but don’t change a thing), The cost center that paid its way, and What’s he waiting for?

In HBR on Leading Through Change, John P. Kotter writes about leading change, “one lesson is that change involves numerous phases that, together, usually take a long time. Skipping steps creates only an illusion of speed and never produces a satisfying result. A second lesson is that critical mistakes in any of the phases can have a devastating impact, slowing momentum and negating previous gains. Kotter’s lessons are instructive, for even the most capable managers often make at least one big error.”

W. Chan Kim and Renee Mauborgne writes about Tipping Point Leadership. “The theory of tipping point hinges on the insight that in any organization, fundamental changes can occur quickly when the beliefs and energies of a critical mass of people create an epidemic movement toward an idea. Like William Bratton, police commissioner of New York City in 1994, any manager looking to turn around an organization can use remarkably consistent methods to overcome forces of inertia and reach the tipping point.”

The other writers discuss instructive topics like Why do employees resist change?, Conquering a culture of indecision, Change through persuasion, Moments of greatness, Change without plan and The hard side of change management. If you are having problems with your change initiatives read this book.

What’s common among IBM, Chevron and 3M and even your golf swing? They use the J Curve to manage change. “The J Curve provides a platform for dealing with the human dimensions of change. The letter J approximates the path that most major changes follow, whether it’s introducing a new business process, merging mega corporations, or chaning your golf swing. First, there’s a precipitous drop in performance followed by a ragged period of limited progress, and then a steep climb in performance improvement. If you understand where you and your employees are on the J Curve, you can make sense of all changes, past and present.

“Change is about what happens to performance over time. Whether it’s a whole business unit that’s making the change or just one person, the arc of change normally follows a similar pattern. The J Curve nicely describes the pattern of progress or stages of change—The Plateau, The Cliff, The Valley, The Ascent and The Mountaintop.

“Some changes, though, doesn’t always follow that script. Some changes never climb to the dizzying heights of increased productivity and profitability. Many reasons exist why changes don’t produce the expected benefits. You can help team members and coworkers handle change more smoothly and quickly when you understand what they’re thinking and feeling. You can learn to help them with their doubts and worries as they move along the J Curve’s predictable stages.”

Finally, whenever there are changes, there are risks. Authors Crouhy, Galai and Mark writes: “The future cannot be predicted. It is uncertain, and no one has ever been successful in forecasting the stock marker, interest rates, or exchange rates consistently—or credit, operational and systemic events with major financial implications. Yet, the financial risk that arises from uncertainty can be managed. Indeed, much of what distinguishes modern economies from those of the past is the new ability to identify risk, to measure it, to appreciate its consequences, and then to take action accordingly, such as transferring or mitigating the risk.

“The simple sequence of events (identify risk exposures, measure and estimate risk exposures, assess effects of exposure, find instruments and facilities to shift or trade risks, assess costs and benefits of instruments, form a risk mitigation strategy and evaluate performance) is often used to define risk management as a formal discipline. But it’s a sequence that rarely runs smoothly in practice; sometimes simply identifying a risk is the critical problem, while at other times arranging an efficient economic transfer of the risk is the skill that makes one risk manager stand out from another.

“Risk management is really about how firms actively select the type and level of risk that is appropriate for them to assume. In this sense, risk management and risk taking aren’t opposites, but two sides of the same coin.”

The authors discussed the breadth and depth of risk management in 414 pages, but I assure you it is easy reading and offers practical examples and solutions.

Coming from two holidays, you have a lot of catching up to do with your readings to grow in your career and personal life. Happy reading!