Risicomanagement

The Psychology Of Information Security – Resolving conflicts between security compliance and human behavior

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Author: Leron Zinatullin

In this book the author explains the human side of IT Security. By linking the behavior of the target group (the people in the organization) to the desired outcomes (an information-safer environment) the IT security consultant has to bring this about.

But that requires knowing what the situation is, what the employees’ world is, what they view as their goals. And what they experience as being onerous.

Research shows that there are three objections to information-safe work by the employees:

  • There is no clear reason to comply with the IT security rules
  • The cost of fulfilling it is too high
  • There is an inability to comply with the rules

The author doesn’t claim that this list is exhaustive. The author does not go much further than the fact that you have to solve this with empathy for desired usability. How you do that is by communicating intensely with the target group. Unfortunately, the author proposes a classical scheme of communication, completely bilateral, one on one, instead of a communication in a network of people, many to many.

According to him, the goal of working on the information security culture is to show the employees that it can be an easy way of working. One of the explanations of a weak culture in this area is the “broken windows theory”: if a window falls in a neighborhood, the whole neighborhood will have to deal with a negative influence. But the theory would also work the other way around, and showing the good example is worthwhile.

Then the author talks about the psychology of compliance with the rules: this includes external and internal factors. The external factors include reward, punishment, competition. The internal factors include giving meaning, pleasure and interest. There are interactions between both groups of motivations, strengthening or weakening. In addition, other factors are decisive, such as autonomy, etc.

In the last chapter, the author gives a first glance at how changing the approach to security.

Chasing change : building organizational capacity in a turbulent environment

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Authors: Robert C. Thames and Douglas W. Webster

This book is about change management. More specifically, building the change capacity of the organization.

The book starts with a first part about ‘Awareness’: changes can come from everywhere, and change management helps to optimize the survival in a changing environment. With their example of hurricanes and earthquakes, the intuitive link with risk management is immediate. One of the most important starting points of the book, is the importance of the ‘mindset’ of the employees as well as the organizational ‘mindset’: is it a ‘fixed’ mindset in which a changeable environment is impossible, or is it a ‘growth and development mindset’ in which a person and an organization are flexible with regard to a changing environment.

This last mindset is of great importance for the ‘change challenge framework’. So called first order changes and second order changes are important. A first order change is the change that results from a shift of the needs of the environment in relation to the capacities of the organization to meet those needs of the environment. A ‘targeted change gap’ is that portion of the first order change that one wants to close from the ‘First Order Change Gap’ (the total current first order change difference).

A second order change is the actual response of the organization with the intent to close the ‘targeted change gap’.

This results in a so-called ‘Second Order Change Gap’ due to maladjustment of the organization, especially by only filling in the physical dimension and a lack of softness on the changes. In doing so, the term ‘project plan’ is used to indicate the completion of the physical dimension, and the term ‘change plan’ to indicate changes in the organization and the personal mindsets. (This is the closing of the second order change gap).

As you can see, a fairly complex picture emerges, which requires its own terminology.

The second part of the book deals with only one part of the closing of the second order change gap, namely the development of organizational capacities for the possibility of change. The 13 capacities that are being looked at are:

  • Leadership
  • Commitment
  • Liability
  • Thinking forward
  • Innovation
  • Communication
  • Risk tolerance
  • Organizational learning
  • Trust
  • Diversity
  • Empowerment
  • Adaptability
  • Dynamic stability


For each of these topics, the book provides a chapter with a definition and a checklist for a five-point scale. This five-point scale can be used to assess both the current situation and the desired situation.

Chapter 20 discusses the implementation of the change plan. This is further illustrated in Chapter 21 by means of an action plan from a brand new CEO at the so-called ‘Candor Bank’. Chapter 22 provides a case study of hurricane Katrina in New Orleans in 2005 with the aim to illustrate the ‘change model and capability assessment’. In chapter 23, the conclusion, a short summary is given of the main ideas of the entire book.

Why Some Firms Thrive While Others Fail – Governance and Management Lessons from the Crisis.

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Author: Thomas H. Stanton

The book deals with the what and how of the mortgage bond crisis of about 2008. Only roughly because none of the organizations involved were not informed in advance. The book contains a great deal of historical material from the crisis, expressed in financial terms. A financial background helps to fully appreciate the book. Nevertheless, in the last chapter, the author takes up the challenge of extending the analogy with a number of non-financial organizations.

But what should we remember from this book?

First of all there are four principles of winners during crises:

1 ° Provide discipline and a long-term perspective.

2 ° Provide robust communication- and information systems

3 ° Provide the capacity to respond effectively to ‘early warning signs’ and

4 ° Ensure a constructive dialogue between the business units and the risk managers.

But there is more than that.

What are the differences between the firms that controlled the crisis and those who failed?

  • The winners nor the losers saw that the houses would decrease in value. But the “survivors” saw that the market moved in a way that they did not understand. Therefore, they reduced exposure to it.
  • The winners did research in 2006-2007 on the causes of the unexpected developments in the market.
  • JP Morgan differed from other organizations because they built up a financial reserve to take over other organizations if they would get into trouble because of the developments in the market.
  • Other companies failed because they took excessive risks at the wrong time in a narrow range of assets.
  • Successful organizations received a lot of feedback and engaged in constructive dialogues before taking on risks.
  • In some organizations, the CEO was actively involved in the decision to reduce the risk.
  • Successful organizations had a culture, supported by top management, that promoted constant communication between business units and the risk team and higher up the hierarchy.
  • When the successful organizations came into close contact, they again emphasized effective risk management.
  • Successful organizations had information systems that provided an organization-wide view on risks and their changes in time.
  • Perhaps the biggest problem is the immense pressure to deliver short-term performance. This prevents the installation of a risk management system.
  • Effective risk management requires expenditure and discipline, in order not to take short-term gain, which other organizations do, based on risky practices. Support from the CEO and preferably also from ‘the board’ is essential.
  • Risk management is part of all management. A strong information infrastructure is required both for managing the organization and for having an organization-wide view of the risks.
  • Make sure that risk management does not become a formality!
  • It is not easy to be a risk manager if the organization decides not to take the risks into account. You must always be able to tell your truth. Even if you are fired for it.
  • Although the markets and the risks become more complex, simple questions remain critical in order to guarantee a good decision. An important question with weird markets is “what is happening that we do not understand?”.
  • Winners discuss intense implications of threats.
  • Winners had drawn up models for the risk situations, but did not trust them blindly.

Reinventing Organisations

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Author: Frederic Laloux

In his book ‘Reinventing Organisations’, the author seems to kick against holy houses. ‘Why do not we need this vertical structure?’, ‘Why, we can trust the employees in the workplace?’, ‘Why, the first value is not the maximization of profit for the stakeholders?’, ‘Why a machine worker can do a quality check within the perimeters of the customer? “,” Why, budgets should be discussed in team? “,” Why, the employees can learn from each other? “,” Why, we do not need a zilion hierarchical layers of control for efficiency gains, on the contrary? “,” How does the power belong to the employees? “,” Why, the employees can be smart, think problem-solving, spontaneously work overtime to get a piece of the job done, consult each other and feel involved in the work ? “,” Why, the latest generation of young people communicate differently, and how this can be accommodated with a horizontal organizational structure? “,” How the communication is many – to – many and not more one – on – one, and how, can Facebook – like communication within an organization help? “.

These are some of the first objections that are raised in this revolutionary book. This work is divided into three parts. In a first part, the author first discusses a history of organizational structures, from red to amber, orange, to green and finally cyan (turquoise). The author shows how this was appropriate for the zeitgeist and does not always have to be inappropriate in later periods. Some organizations are simply made to be hierarchical. In the army there must be discipline. In times of crisis, there must be a crisis management structure. It is not for me to say that the latter must always be hierarchically orange or amber or red, but may evolve into green or cyan. What these colors mean, for that I refer to the book, which goes deeper into it.

In a second part, the author delves deeper into structures, practices and cultures of cyan organizations. In doing so, the author goes deeper into all layers of the organization, not just processes, machines and projects, but also people and cultures. Very important here is the search for wholeness and the team structures, extensively illustrated by the organization ‘Buurtzorg’ in the Netherlands. Such types of teamwork are more attuned to the communication habits of youth, who are our future, who communicate many – to – many on the internet, and who for the most part no longer feel at home in a vertically structured hierarchical organization.

As proof of this, and for the fact that it works, the author quotes a series of organizations and their ‘personal’ stories about how they fared, how they performed well in the last decades, and even in the depths of the global crisis periods.

In a final part, the author talks about necessary and sufficient conditions for working a cyan organization, as well as addressing the setting up of a new or transforming an existing organization into a cyan organization.

Practical Enterprise Risk Management

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Author: Gregory H. Duckert

The book builds logically from corporate governance, and indicates a number of shortcomings herein, mainly system implementation. Then the actual story of risk and ERM begins. In this the author curses against everything that is for a subjective assessment of chance and impact and the related conclusions. He swears by cold facts and data. In this way he comes to the idea that risk assessment is about management. Risk management is an unmissable tool in this. After an overview of types of risks, he shows us how we should perceive risks objectively. He speaks about a data-centered model where it is possible to keep track based on all data in the company, and to do bench-marks on your own company. By introducing the concept of KRI (key risk indicators) instead of KPI (key performance indicators) linked to outcome of the processes instead of the output and with a number of analysis techniques such as trends, ratios, thresholds etc it is possible to build historical data and to find triggers of things that go wrong, with root-cause analysis. Then measures can be defined and implemented.

In addition, it is possible to pour this data into useful tools, so that the data neatly presents at meetings throughout the organization, the right KRIs at the right level. In doing so, he provides a handle on how to bring risk management to the board of directors, or to the board of directors.

As a penultimate chapter, the author discusses the phenomenon of outsourcing and a select number of risks at the various stages. It is therefore not surprising that he, for example, thinks of the outsourcing of IT as a bad thing; IT is according to him a core business of the company because everything depends on it.

The author concludes the book with the ownership of ERM. It is essential to know that everyone contributes. Everyone has a role to play in one way or another.