Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Working Knowledge
Business Research for Business Leaders
  • Browse All Articles
  • Popular Articles
  • Cold Call Podcast
  • Managing the Future of Work Podcast
  • About Us
  • Book
  • Leadership
  • Marketing
  • Finance
  • Management
  • Entrepreneurship
  • All Topics...
  • Topics
    • COVID-19
    • Entrepreneurship
    • Finance
    • Gender
    • Globalization
    • Leadership
    • Management
    • Negotiation
    • Social Enterprise
    • Strategy
  • Sections
    • Book
    • Podcasts
    • HBS Case
    • In Practice
    • Lessons from the Classroom
    • Op-Ed
    • Research & Ideas
    • Research Event
    • Sharpening Your Skills
    • What Do You Think?
    • Working Paper Summaries
  • Browse All
    Novel Risks
    27 Mar 2020Working Paper Summaries

    Novel Risks

    by Robert S. Kaplan, Dutch Leonard, and Anette Mikes
    Companies can manage known risks by reducing their likelihood and impact. But such routine risk management often prevents them from recognizing and responding rapidly to novel risks, those not envisioned or seen before. Setting up teams, processes, and capabilities in advance for dealing with unexpected circumstances can protect against their severe consequences.
    LinkedIn
    Email

    Author Abstract

    All organizations now practice some form of risk management to identify and assess routine risks for compliance—in their operations, supply chains, and strategy, as well as from envisioned external events. These risk management policies, however, fail when employees do not recognize the potential for novel risks to occur during apparently routine operations. Novel risks—arising from circumstances that haven’t been thought of or seen before—make routine risk management ineffective, and, more seriously, delude management into thinking that risks have been mitigated when, in fact, novel risks can escalate to serious if not fatal consequences. The paper discusses why well-known behavioral and organizational biases cause novel risks to go unrecognized and unmitigated. Based on best practices in several organizations, the paper describes the processes that private and public entities can institute to identify and manage novel risks. These risks require organizations to launch adaptive and nimble responses to avoid being trapped in routines that are inadequate or even counterproductive when novel circumstances arise.

    Paper Information

    • Full Working Paper Text
    • Working Paper Publication Date: March 2020
    • HBS Working Paper Number: HBS Working Paper #20-094
    • Faculty Unit(s): Accounting and Management; General Management
      Trending
        • 16 Mar 2023
        • Research & Ideas

        Why Business Travel Still Matters in a Zoom World

        • 25 Jan 2022
        • Research & Ideas

        More Proof That Money Can Buy Happiness (or a Life with Less Stress)

        • 22 Nov 2022
        • Research & Ideas

        When Agreeing to Disagree Is a Good Beginning

        • 23 Apr 2018
        • Research & Ideas

        Sponsorship Programs Could Actually Widen the Gender Gap

        • 14 Mar 2023
        • In Practice

        What Does the Failure of Silicon Valley Bank Say About the State of Finance?

    Robert S. Kaplan
    Robert S. Kaplan
    Senior Fellow
    Marvin Bower Professor of Leadership Development, Emeritus
    Contact
    Send an email
    → More Articles
    Dutch Leonard
    Dutch Leonard
    George F. Baker, Jr. Professor of Public Management
    Eliot I. Snider and Family Professor of Business Administration
    Contact
    Send an email
    → More Articles
    Find Related Articles
    • COVID-19
    • Health Pandemics
    • Risk Management
    • Risk and Uncertainty
    • Prejudice and Bias

    Sign up for our weekly newsletter

    Interested in improving your business? Learn about fresh research and ideas from Harvard Business School faculty.
    This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
    ǁ
    Campus Map
    Harvard Business School Working Knowledge
    Baker Library | Bloomberg Center
    Soldiers Field
    Boston, MA 02163
    Email: Editor-in-Chief
    →Map & Directions
    →More Contact Information
    • Make a Gift
    • Site Map
    • Jobs
    • Harvard University
    • Trademarks
    • Policies
    • Accessibility
    • Digital Accessibility
    Copyright © President & Fellows of Harvard College