Dealing with risk

When dealing with risk, it may often be a better proposal, from a long term perspective, to avoid risk than to try to manage it.

For example, it is often better from a financial planning standpoint to avoid debt, which adds risk, than to have debt and try to leverage it and make a spread.

The same avoidance of risk applies in many other fields:

  • software where it is advisable to avoid bad design and bad coding to avoid technical debt which adds future risk.
  • aircraft design which has, over the years, learned from it’s past failures to become very safe by avoiding risky design and procedures

There are countless other examples where this principle applies.