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The Global Risk Practice links together a global community of consultants
who specialize in helping the world's leading companies to create value in a
turbulent world. We combine superior industry insight and a strategic mind-set
with a structured approach to managing consistently for the right risk-return
trade-offs. Our global Risk Practice consists of over 50 partners, 250 consultants, and 40 experts and specialists, supported by a network of analysts and our risk analytics team focused on risk modeling and tool development. To deliver on
the cross-functional nature of our work, we are fully integrated into the
broader McKinsey community, with particularly strong links to the financial
services and energy and materials sectors.
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 | | | The risk revolution | | | This is a revised and updated (September 2008) version of a McKinsey staff paper that sets out the origins of modern risk management and offers a framework for applying its ideas in companies to improve their ability to manage under uncertainty. The paper was published in edited form as two related articles in the September 2008 issue of Harvard Business Review. | Launch this article (PDF - 1.36 MB) |
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| | | Making risk management a value-added function in the boardroom | | | Boards often have little clear understanding of the risks they are overseeing—discussion of risk is often a quick agenda item, and the subject is seen as relating mainly to compliance rather than strategy. This paper explains how boards can work with top executives to have a much richer discussion and make more informed decisions. | | Launch this article (PDF - 360 KB) |
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| | | Turning risk management into a true competitive advantage: Lessons from the recent crisis | | | In times of crisis risk comes to the forefront. This paper looks at the banking crisis that began in 2007 and explores its impact on senior managers. It argues that an important lesson is that risk should be a continuous organizing principle, not something to adopt during bad times. The paper offers a suggested set of short- and long-term measures for managers to turn risk management into a competitive weapon. | | Launch this article (PDF - 612 KB) |
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| | | Probabilistic modeling as an exploratory decision-making tool | | | Are models really to blame for the crisis engulfing the banking and financial systems? This paper examines the uses and abuses of models, showing how they can properly fit into a strategic discussion about investment choices and competitive positioning. It sets out some of the common pitfalls in using models and suggests how these can be avoided. | | Launch this article (PDF - 356 KB) |
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| | | The risk revolution | The tools: The new arsenal of risk management | | | This article examines the emergence of modern risk-management techniques, explaining the background of important ideas in academic finance and economics and how these allowed the development of new financial instruments and markets for risk transfer. The article sets out the impact of these developments on the financial services industry and offers a case study of their application at Goldman Sachs. | | Read more |
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| | | The risk revolution | The strategy: Owning the right risks | | | This accompanying article explores the practical application of modern risk management in industrial and other companies, particularly in the energy sector where many of the ideas from finance have found ready acceptance. A case study of TXU Corporation explains the concept of risk-return management, and the article then offers a five-step framework for integrating risk-return thinking into how companies make strategic decisions and improve their risk taking. | | Read more |
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| | | Surviving and prevailing in the U.S. subprime mortgage market | | | Despite recent dramatic downturns and the threat of increased regulation, subprime-mortgage opportunities still abound for players that are willing to wait for an upturn and can stomach the attendant risks. | Read more on the McKinsey Quarterly site |
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| | | Understanding supply chain risk: A McKinsey global survey | | | Executives believe they face growing risk from disruptions to their supply chains—yet many are unprepared to manage those risks. | | Read more on the McKinsey Quarterly site |
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