Donald Rumsfeld said in his 2002 known knowns statement "there are known knowns, these are things we know that we know. There are known unknowns. That is to say, there are things that we now know we don't know. But there are also unknown unknowns. These are things we do know know we don't know".
The known risks in business are easy to understand and control.
Getting a handle on the unknowns isn't easy but necessary.
So what is unknown risk? The World Economic Forum's Global Risks 2010 report explores just that.
This report examines potential risks that share a potential for wider systemic impact. Now more than ever, unrelated fields in other countries can have a big effect locally.
Some of the risks discussed are:
- economic risk
- geopolitical risks;
- environmental risks from extreme weather; and
- technological risks
Knowing your risk can also help identify opportunities.
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