Book By: Douglas W. Hubbard
Reviewed By: Russ Parker
The Failure of Risk Management (Why It’s Broken and How to Fix It)
Pages: 366
Edition: Second
Authors Pages:
Cost/Purchase Price:
Amazon: $26.07 – $36.88
(As an Amazon Affiliate, I earn from qualifying purchases)
Before I get into the full review – I think it is important to say why I got this book. A few months ago, I published an article on Never Skipping Qualitative Risk Analysis and Stop Saying Risk and Opportunity – stressing the importance of the Risk Matrix.
Thats when I was message about checking out The Failure of Risk Management – as they professionally challenged the article with a recommendation to read the book.
So, with the recommendation in hand – I ordered the book – read it – and below are all my thoughts!
Overview of "The Failure of Risk Management"
Douglas W. Hubbard’s The Failure of Risk Management is critique of common risk management practices.
Too include my very own, PMI Risk Management Process.
The book reveals how many traditional approaches fail to provide true value—or worse, actively mislead decision-makers in managing their projects. Hubbard organizes the book into key themes that challenge the status quo and offer practical, scientifically grounded alternatives to improve risk management practices.
The chapters are include major concepts around risk management, including:
Why Risk Management Fails
Hubbard starts by dissecting common tools like risk matrices and heat maps, exposing their flaws and lack of empirical support.The Cognitive Bias Problem
A deep dive into human psychology explains how cognitive biases such as overconfidence and anchoring distort risk perception and decision-making.The Quantitative Approach
Hubbard advocates for quantitative risk analysis techniques, including probabilistic modeling, Monte Carlo simulations, and Applied Information Economics (AIE).Case Studies: The Good, the Bad, and the Ugly
Real-world examples illustrate both catastrophic failures and successful applications of rigorous risk management.Actionable Solutions
The book concludes with a step-by-step guide to implementing effective, measurable, and scientifically valid risk management strategies.
Hubbard’s no-nonsense style and practical solutions make this book a wake-up call for professionals across industries.
Who Should Read?
This book is ideal for professionals tasked with managing risks in any field, especially those within my field like:
Project Managers and Risk Managers: You will learn how to ditch ineffective tools and adopt methods that actually reduce uncertainty. And, gain some templates to easily transition over to various forms of quantitative risk analysis that don’t take huge program to operate.
Leaders and Decision-Makers: Gain insights into how cognitive biases skew judgment and how to counteract them. And how we, as project leaders, can ensure this cognitive bias is acknowledged and treated within our project data analysis.
Data Scientists and Analysts: Easily understand the power of probabilistic models in making risk-based decisions.
Even if you don’t manage risks directly, the book offers valuable lessons on decision-making and critical thinking. But If you have any uncertainty in your life — this book will certainly help you out!
What I Enjoyed About The Book:
From the first chapter, The Failure of Risk Management had my attention. Hubbard doesn’t shy away from calling out organization like Project Management Institute and the “risk management theater” many of us recognize but rarely question.
His book hits home on many points, is filled now with bookmarks, and a notecard with listings of area for future review and quotes for future blog articles.
I can say that I truly learned from this book, I loved Hubbards use of:
Scientific Grounding: Hubbard backs up his arguments with data and real-world case studies, giving the book a sense of credibility and urgency. He provides his formulas, shows his work and, most importantly, backs up everything he claims in the book.
Practical Tools: The book isn’t just theoretical—it offers actionable frameworks and tools like Monte Carlo simulations and AIE to improve decision-making. It’s hard to find books that also provide tangible results. But this book comes with access to downloads from Hubbard that are easily translatable to the readers current projects.
Engaging Style: Despite the technical nature of the topic, Hubbard writes in a way that’s engaging and accessible. I thought it was going to be very textbook like, but it was actually an easy read. Hubbard’s ability to translate the complex topics into easy to understand concepts was truly an art!
Relatable Examples: The case studies used, like those on the failures during the 2008 financial crisis and successes of other organizations provide a clear picture of what works and what doesn’t in risk management.
A favorite Quote from the book: “Because there is already a word for that – uncertainty.”
A quote that comes after discussing how PMI uses the terms “Positive” and “Negative” risk when identifying risks for a project. Saying that what PM’s are calling positive risks are just uncertainties about the project.
He even goes as far to explain how the “Merriam-Webster, American Heritage, Oxford English, and Dictionary.com defines risk in terms of peril, danger, chance, loss, injury, or hard”.
Hubbard basically destroys my entire article on “Stop Saying Risk and Opportunity” in one-page of this book!
What I Didn’t Enjoy About The Book:
Honestly, there’s little to dislike. However, a couple of minor critiques:
Dense Material: For readers unfamiliar with statistics or quantitative methods, parts of the book can feel overwhelming. A companion guide for beginners might become useful for this book. I see there is one for Hubbards, How to Measure Anything, Book – which I plan to check out next year.
This book comes with a study guide that would be useful for anyone trying to keep up with The Failure of Risk Management book.
Critical, but Heavy: While Hubbard critiques flawed methods effectively, some readers might feel the book focuses too much on what’s wrong before offering solutions.
I started feeling a “Yea, I got it – we are wrong and you are right” mentality at one point in the book.
That said, these points don’t detract significantly from the value of the book.
Overall Rating:
This is a must-read for anyone in project management, risk management, or leadership roles. It’s an eye-opener that challenges conventional wisdom and provides tools to fix broken systems.
About the Author
Douglas W. Hubbard
Douglas Hubbard is a renowned expert in quantitative decision-making and the inventor of Applied Information Economics (AIE). With decades of experience, he has consulted with Fortune 500 companies, government agencies, and nonprofits on improving decision-making and risk management.
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Thank you for checking out this book review for: The Failure of Risk Management.
I highly recommend you pick up this book, take notes, and apply some of its contents in your daily life and projects!
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