One of the things I most enjoy doing is writing my “First Word” column, which appears at the beginning of each issue of Risk Management. It passes for what would be the editor’s page in most other publications, but a while back, I decided that if I was going to take up a page in this book, I’d at least try to write something entertaining, rather than reiterate the table of contents, which is what so many editor pages do, sadly.

For those of you who haven’t read “First Word,” it’s usually a whimsical, geeky look at some topic that interests me and then I find some way to relate it to a larger point about risk management. If nothing else, it’s given me the opportunity to write about things like zombies, disappearing islands and million-dollar tulips in a magazine that doesn’t normally cover such things.

Because I write about such a wide range of screwball topics, people often ask me where I get my ideas for the column. There is no secret to it, really. I just try to look at things from a risk management perspective, no matter how trivial and usually the rest follows. I suppose it’s a kind of skill one develops after being around this subject matter for a long enough period of time. I am confident any of my readers could do the same if they were not already engaged in more important things, like preventing class action lawsuits, industrial fires and fatal workplace accidents. You know, small stuff.

Anyway, I mention all of this because given how I prospect for column subjects, it was inevitable that I would turn my eye toward the movies — a love of mine — and Top 10 lists — another love of mine — and mash them up to take a look at the top 10 lessons in risk management I have learned from the movies. Since we don’t have the budget to embed little video windows on the pages of our magazine just yet (damn you, Esquire), a blog post will have to suffice.

One more thing before we begin: these films clips have all been used without permission and are the property of their original copyright holders. This blog makes no assertion whatsoever to claim ownership of this media. And, if you like any of these clips, we strongly advise you to march down to your nearest retailer or fire up Amazon and order them on DVD.

So much for the fine print. Here we go!

#10 Clerks

This was both the movie that launched director Kevin Smith’s career and defined the weird subgenre of Gen-X slacker cinema. You have to appreciate the sheer guts it took to make this film; Smith financed it on a few maxed-out credit cards and shot at a local convenience store during off hours at such a furious pace that when it came to edit the film, the poor guy couldn’t stay awake. Nevertheless, the film became a cult classic, and deservedly so, for its offbeat humor and insight.

The Story So Far
Slackers Dante and Randall spend their days at the local convenience store doing pretty much anything but their jobs, and in so doing, have a bunch of wide-ranging conversations about life, the universe and everything. It doesn’t take long before they turn to a topic near and dear to many Gen-Xer’s heart — the Star Wars trilogy — and begin deconstructing it.

And as they do, Randall provides an interesting interpretation of Return of the Jedi that George Lucas most certainly did not intend…

The Risk Management Lesson Learned
Somehow, this clip always reminded me of the scenes of when the Death Star would fire its cannon, and there would be these two technicians standing on an exposed platform near the beam itself, shielding their eyes from it. Even as a kid, I thought, those guys are going to get cancer or something. It’s probably why I love this conversation so much.

It’s funny that in a story as simplistic and as black and white as Return of the Jedi, two guys managed to deconstruct it enough to find the shades of gray that turn the entire story on its ear. And while the scene is meant to be funny for just that reason, I also like it because it reminds me that no matter how simple the situation seems, there are still the grades of risk and reward in it that define modern risk and modern risk management. We all take our chances, even if we’re just a roofer looking to score a juicy contract on that other big space station the government’s building.

#9 Searching for Bobby Fischer

This is a biographical flick about Josh Waitskin, a real-life chess prodigy who at one point was seen as the next big thing in the world of grandmaster chess. He is compared frequently to Bobby Fischer who, at the time this movie was made, was best known for being the world’s greatest chess player, defeating Soviet champ Boris Spassky in a number of high-profile, Cold War-era chess matches before subsequently losing his mind and disappearing. Ultimately, he surfaced and in short order gave the world ample evidence that he was a pretty repugnant individual who might have rocked at chess but sucked at life.

The Story So Far
Eager to cultivate young Josh’s gift for chess, his parents try to walk the line between pushing him to excel while also making sure he has a rounded childhood. After a period of formal training, Josh loses his groove as well as a few big games, and he begins to seriously doubt his ability to compete in an upcoming chess tournament.

To return to roots, he goes back to his unlikely mentor, a skeevy speed chess player in Central Park played by a pre-Matrix Lawrence Fishburne…

The Risk Management Lesson Learned
First off, let me say how much I sympathize with the director for having to try to make a chess game look dramatic and filled with high emotion. It could not have been easy; there are only so many times you can provide a dramatic shot of somebody slamming a chess clock. But I can’t complain; had Michael Bay done this one, I guess the clocks would have exploded. Anyway…

The point here is when Lawrence Fishburne questions Josh’s style of play. His formal training has been too defensive, and Josh had lost his sense of attack. He tries too hard to not risk anything and in so doing, has forgotten how to win. It’s not enough to not lose, Fishburne says, you have to risk defeat in order to win. I love this maxim, and I quote it often. After all, in the world of business, you absolutely have to risk something to reap a reward. So many enterprises forget this, they doom themselves to mediocrity or worse: ultimate, entropic failure.

Where this applies to risk management is that in the last two decades or so, the discipline has advanced from buying insurance and protecting against risks to the art and science of intelligent risk-taking. At long last, the risk manager can actually be part of his or her company’s ability to profit by providing guidance on knowing what risks to take and when to take them.

#8 The Hudsucker Proxy

If the only Coen Brothers movie you have ever seen is No Country for Old Men, then you are missing out on the zany side of these guys. They seem to oscillate between serious and screwball films, and The Hudsucker Proxy is definitely in the screwball camp. It’s a hyperbolic satire of the corporate world in the late 1950s, complete with monolithic skyscrapers, Bauhaus board meeting rooms, legions of drones in gray flannel suits and the rapid-fire patter you’d expect from His Girl Friday. Really, check it out.

The Story So Far
Waring Hudsucker, the CEO of the fabulously successful Hudsucker Industries, would seem to have it all, which is why it comes as a great surprise to everyone when, during a board meeting, he inexplicably gets out of his seat, runs down the boardroom table and hurls himself out of the window to his death. Never skipping a beat, the Board of Directors, run by a cagey Paul Newman, decides to appoint an apparent imbecile as the new CEO in order to panic the stock market and crash the company’s share price. That way, they can buy it all up privately before it is sold publicly, and they’ll gain control of the otherwise very profitable company.

What they don’t expect, though, is for the imbecile they’ve chosen as CEO to invent the hula hoop and make the company’s stock more expensive than ever…

The Risk Management Lesson Learned
To this day, whenever an otherwise airtight plan goes awry, my friends and I turn to each other and mutter, “Plexiglas.” I love this scene for its cartoonish humor — it might be the only live-action sequence I’ve ever seen where a person slides down a flat surface, Wile E. Coyote-style.

But despite all that, there’s a kernel of grim truth here, and it’s that whether you’re the craven plutocrats of Hudsucker’s board or a risk manager trying to do a good job, there will always come a time when a carefully laid plan will fly off the rails. And it’s times like that when you’ve got to have a backup plan. There are no easy ways out in the world of risk management.

You can’t just divorce yourself from a problem you failed to prevent; part of managing risk means living with the consequences of setbacks, enduring catastrophes and being ready and able to execute a plan to recover as quickly as possible. Sometimes that means having the right kind of insurance in place. Sometimes it means having a whole second office space elsewhere ready to use at a moment’s notice. And sometimes it means replacing the glass in windows your chief executives have shown a tendency to jump through.

#7 Jaws

First things first: if you have not seen this movie, then stop what you’re doing, find a way to see this flick, and don’t come back here until you are done. I’m serious. Seeing this movie is like eating your vegetables. Even if you don’t like it, it’s good for you. Don’t worry, this blog will still be here when you get back.

Done? Good. You’ll thank me for that when we next meet, I’m sure. After all, the only folks who haven’t seen this movie are Communists, sharks and kids too busy blowing out their thumb joints texting messages to each other. And you really don’t want to be confused for any of those, right? Right.

Onward.

The Story So Far
The summer resort town of Amity Island has a shark problem and greenhorn Police Chief Brody wants to shut down the beaches before any more swimmers get eaten. However, the mayor of Amity and his entourage don’t think that’s such a good idea, what with the Fourth of July right around the corner.

They try to talk Brody out of him blowing the whistle on an obvious and deadly problem…

The Risk Management Lesson Learned
How many times have we seen this before? Somebody knows there is a risk, knows what must be done to manage it, but is convinced otherwise because of the lure of money. In this scene, you can almost forgive Brody for knuckling under because this is his first season on the island. He doesn’t really know anything about sharks or the island for that matter, and because he’s the new guy, he doesn’t want to make any more waves than is necessary.

It’s not excusable, but it’s certainly understandable. What galls me is how the medical examiner in this scene has already given in. Presumably, this guy lived his whole life on the island. He knows a shark attack when he sees one, and he knowingly looks the other way because the mayor wants him to. We see this again and again and again in the world of business, where the top decsion makers see things not as they are but as they want them to be. And it inevitably leads to catastrophe.

If you doubt it, consider the fact that at every single Wall Street bank that begged the government for TARP money, there was a whistleblower there who thought their firm’s investment in bad mortgages was unwise. Just as there were people at AIG who thought the financial services unit was leveraged out to an insane degree. And while the money kept rolling in, these voices were marginalized and ignored…until it was too late.

Money is the great enemy of risk management. Always has been, always will be. It sure is the case on Amity Island. And when the Forth of July turns into an aquatic buffet for marine predators, you know that Brody and the mayor should have known better.

#6 Jurassic Park

Industrialist John Hammon plans to open a theme park featuring genetically engineered dinosaurs, but when one of his raptors eats an employee, the shareholders demand a risk assessment be done of the park. A paleotologist and a paleobotanist are asked to weigh in on the notion of a dinosaur park, and Hammond is surprised to see that they don’t think it’s a very good idea…

The bloodsucking lawyer (embedding disabled by request)

The Risk Management Lesson Learned
This clip is very similar to the one from Jaws. Obvious risk emerges, risk is identified, risk is ignored for the sake of business needs, bad things happen. The most interesting thing about this clip is that Jurassic Park came out almost 20 years after Jaws, and the theme of profits trumping risk management still resounds with audiences. Twenty years on and nothing has changed. How depressing.

Additional note: when I discussed this with Monitor editor Jared Wade, he had some great comments to share on it. Better than my original point, I think, and this post would be incomplete without them:

You should highlight “the threat of the unknown” factor that the dinosaurs represent. The degree to which this is true will depend upon the industry/company you work for, but inevitably, there will be a risk you have to manage that you personally know very little about. And in some cases — e.g., running an amusement park full of velociraptors and T-Rexes or trading new, complex securities that hinge on people’s ability to make their mortgage payments — nobody knows anything about the risk. There is no data to base how to manage the risk on. No historic record to learn from. Disasters are often in this category. There was no precedent for 9/11 or Katrina. This is when you as a risk manager must use the most critical asset: Your instincts.

Spot on, Jared.

#5 The Mist

This is the only bona fide horror movie on this list, which is surprising considering how much I love zombie movies. (Unfortunately, “shoot for the head” isn’t exactly applicable risk management advice for the real world, which explains why Dawn of the Dead is nowhere to be seen here.) If you didn’t see The Mist — and most people did not, sadly — then you’re missing a really great movie. It’s based on a novella Stephen King wrote back in the 1980s about a small town in Maine (surprise, surprise) where one day, a strange mist rolls down the mountain and envelops the town. Within the mist are large and horrific creatures that grab and devour anybody caught outside.

The Story So Far
Our hero, played by Thomas Jane, has gone to the supermarket with his son and is shopping with his fellow townspeople when the mist arrives. Instantly, somebody runs into the store from the outside, hysterical; there are things out there eating anybody who isn’t indoors. The point is proven when the people all witness some poor person get snatched in the parking lot by a creature they can’t entirely see. But somehow, the monsters aren’t trying to crash through the glass frontage of the store, so staying inside seems to be the safest option.

And yet, as soon as the people figure this out, somebody among them decides they have to go back outside anyway…

The Risk Management Lesson Learned
When I first saw this, I practically cheered. Horror movies are a chronicle of stupid decisions; I mean, how many times in a horror flick do you see people do things that you know will only ensure their speedy demise? (e.g., “Let’s split up — we’ll cover more ground that way.”) At last, we see a bunch of people who know better. It’s tragic that this poor lady has kids to save, but as Mr. Pink from Reservoir Dogs would say, some folks are lucky and some folks ain’t. And this is one unlucky lady. I wouldn’t have helped her, and I don’t think anybody else would, either.

However, it’s one thing to apply this kind of logic as a detached movie viewer. It’s quite another thing to make the same kind of call during a real-life moment of crisis. The decision to not help this woman is a moment of fear-based decision making on the part of everybody in that store. And if money is the great enemy of good risk management, then fear runs a close second.

If The Mist, is anything, it is a morality play about the power of letting fear run your life. The entire movie (complete with its excellent but downbeat ending) is a series of one bad decision after another — all of which are motivated by fear over reason. In reality, the same principles hold true, and we’ve all seen plenty of examples where a company panics and does exactly the wrong thing at the wrong time. That’s why it pays to have a good risk management capability around — somebody (or a group of people, ideally) who can keep a level head during crisis, stick to a good plan and try to work through a situation most would rather run from.

#4 Ocean’s Eleven

This is the caper movie to beat all caper movies. And yeah, it’s a remake, but so what? It’s still cool as hell and, frankly, if a crew as slick and as cool as George Clooney, Brad Pitt, Matt Damon, Don Cheadle and the rest came looking to take my stuff, I’d probably just give it to them. And since this is a movie about thievery, you might think that the risk management lesson here is about keeping your stuff safe. But it isn’t.

The Story So Far
Master thief and con man Danny Ocean (George Clooney) has engineered an unbelieveably complex and clever heist of $160 million from the supposedly impregnable vault of the Bellagio casino in Las Vegas. After recruiting a team of ten other thieves and con men, Ocean’s plan goes into effect, defeating the casino’s many different layers of security and covering every risk the team can think of. But at the moment of truth, we see that no plan is airtight. A thief working the vault from the inside unexpectedly gets stuck in the vault door at the moment Ocean is supposed to blow it open.

Not good…

The Risk Management Lesson Learned
There are two interesting things afoot here. The first is how Yen, the team’s Chinese acrobat (or “grease man”), gets caught in the door. Earlier in the movie, a car door slams shut on his hand, injuring it. This is why he has it bandaged during the heist, and why he gets his hand stuck in the door; the linen catches. Ocean could not have planned for this, and it suddenly throws and kink into the whole plan.

The second thing is Ocean’s batteries geeking out at the moment of truth. All throughout the film, Ocean chides his understudy Linus (Matt Damon) to be mindful of little details, but when it matters most, Ocean can’t live up to his own advice.

In the end, Linus has the batteries they need, and the delay ends up saving Yen, so it all works out in the end. But in reality, we can’t rely on such happenstance to save us. We have to cover every detail imaginable, but we can’t do it alone. By ourselves, we will always miss something important, which is why risk management is best done as a group exercise. The advent of the board-level risk committee to steer organizations towards better large-scale risk management decisions is a great idea, and funny moments like this vault scene are a cool reminder of it.

#3 Along Came Polly

I like Ben Stiller as an actor, but I have never had much success enjoying his squirm comedies, in which he plays some mope whose foibles are so pronounced that we twist in our chair while laughing at the poor bastard’s misfortune. It’s why I never seemed to like Meet the Parents as much as everybody else seemed to, and I suppose it’s why I couldn’t get into Along Came Polly as much as I would have liked. Call me a sap, but I feel for the underdog. Be that as it may, this movie still has a great moment in risk management in it.

The Story So Far
Reuben is a neurotic dweeb so obsessed with risk that he seeks to avoid it in all aspects of his life. He’s also got irritable bowel syndrome, which seems to be a manifestation of his need to avoid risk; his stomach won’t allow the passage of spicy food. These traits presumably are what make him such a good risk analyst for an insurance company. It’s the one area in his life where his personality quirks make him a natural success. Early in the film, Reuben’s heart is broken when his newlywed wife cheats on him, and he tries to get back into the dating game.

He soon meets Polly, an adventuresome free spirit who takes all the kinds of risks Reuben won’t, which puts a crimp in their blossoming romance…

Reuben’s profile (embedding disabled by request)

The Risk Management Lesson Learned
This was the first time I saw a risk manager as a character in a film, and for those in the business, I think this is a good news/bad news situation. Bad news first: Reuben is a wildly inaccurate stereotype on many different levels, but none more so than the suggestion that the only people who might want to manage risk for a living are those who are already obsessed with it. Folks who wouldn’t dare to dance the salsa. Folks with irritable bowel syndrome. When I explain risk management to people, they automatically assume it has something to do with nerdy bean-counters, and this movie does the discipline no favors in that regard.

The good news, however, is that risk management has become so mainstream that Hollywood decided to use it to center a movie around. (No, Risk Management doesn’t count. That’s from the 1930s.) For most risk managers, who have toiled for years without their top executives even knowing what they did, let alone caring enough to give their programs some serious support, the times have definitely changed. Now is your great opportunity to take advantage of the fact that everybody is aware of risk now. There has never been a better time to promote what risk managers do and what they need to do it. Yeah, some firms will turn a blind eye to it (see Jaws), but for the most part, company leaders know that they need risk management.

This is a good thing.

#2 Collateral

If you haven’t seen any of Michael Mann’s movies, then you’re really missing out. I’m especially fond of Heat, a Los Angeles cops and robbers story starring Al Pacino and Robert DeNiro, that features one of the greatest bank robbery scenes of all time. Of course, if you’re one of those who feel that this movie also inspired the grim North Hollywood Bank of America robbery and shootout, then you might want to watch Collateral instead, a great crime story that feels like it takes place in the same creative universe as Heat, but in a different part of town. [Editor’s note: Do yourself a favor and watch The Insider before either of the two flicks Bill has mentioned.]

The Story So Far
Vincent (Tom Cruise) is a slick and sinister hit man tasked with killing four people associated with a high-profile drug case going to trial in the morning. To make his hits all in the same night, he hires a cabbie, Max (Jamie Foxx), to drive him around LA while he visit his victims. During the first hit, Max realizes (in dramatic fashion, it should be noted) what Vincent is up to. Vincent immediately downgrades Max from cabbie to prisoner and he forces him to continue driving him around. After a creepy scene where Vincent and Max visit Max’s mother in the hospital, Max makes a desperate attempt to stop the killings by destroying Vincent’s target dossiers.

However, the plan backfires, and Vincent decides that Max will get him some replacements…

The Risk Management Lesson Learned
This was the first time I ever heard the term “risk management” in a film, although it isn’t used as a real risk manager would use it. It’s dropped as exotic lingo meant to add an air of technical wizardry to the character of Vincent. It plays on the fact that the audience has likely heard about risk management enough to recognize the term, even if they don’t really know what it means.

In this regard, this clip is in the same category as Along Came Polly. It uses the growing mainstream awareness of risk management for dramatic effect. Risk managers might be less inclined to take umbrage at this misrepresentation, since risk management is used in an almost sexy context. It’s something high-level. It’s something arcane. It’s the kind of thing only a handsome, badass hit man would know about it.

Only it’s not. Risk management is more commonplace than that, and it pays to maintain a realistic notion of what the discipline really is and can do. It’s too important not to.

#1 Sunshine

This is probably the best bad movie ever made. It breaks my heart, really. Made by Danny Boyle, the genius behind Trainspotting, 28 Days Later (Yes! Zombies!) and Slumdog Millionaire, Sunshine is a really ambitious science fiction film that could have been one of the truly great ones had the story not broken our suspension of disbelief halfway through and continue to unravel in plausibility from there. Such a shame, too, because the film looks great, sounds great and is well-acted — it’s just stuck with a story that even a houseplant would question. That said, it does have one really great scene in it that is not only my favorite scene of this entire article, but it’s the scene that gave me the idea for it in the first place.

The Story So Far
In the future, the sun begins to burn out prematurely, threatening all life on Earth. A spaceship, the Icarus, is sent towards the sun with an enormous and experimental nuclear bomb that is designed to be detonated within the dying star, re-igniting it. However, the ship vanishes shortly before it can deliver its payload. Seven years later, the Icarus II is sent on the same mission, but it absolutely must succeed. The planet’s last remaining amounts of nuclear material were used to make the second bomb, so this is truly a do or die mission.

And just as the Icarus II reaches the sun, it discovers the Icarus I is floating in low orbit over the star, and the crew must decide whether or not they should try to rescue the stricken sister ship…

Ask the physicist (embedding disabled by request)

The Risk Management Lesson Learned
At last, a real discussion about risk, and a real story about risk management! The physicist must make a risk management decision that will have huge implications, and it really speaks to the reality, complexity and importance of managing risk. In this story, there is a certain kind of quiet heroism on the part of our main character as he assumes a burden nobody else is willing to shoulder, one that literally carries with it the fate of all mankind. Thankfully daily risk management decisions are not as all-important, but that quiet heroism part is still there. Ask anybody whose risk manager kept their firm in the black for a year, and they’ll agree. On the Icarus II, the physicist was a guy the rest of the crew ignored until they suddenly realized he was the most important guy on the ship. Strangely, the same seems to hold true for real-life risk managers all the time.

Epilogue

We are natural born storytellers. From the earliest campfire to the latest summer blockbuster, we love to tell tales that entertain, enlighten and inspire. Few things can open our eyes to the way we would like things to be than a well-told tale, and movies certainly do that for us. The clips you saw here are just a small sampling of some moments where my thoughts on risk management and my favorite movies crossed paths.

While I wouldn’t suggest that risk managers spend their days at the multiplex looking for bits of obscure wisdom, I think that it does pay to be mindful of one’s profession, to see it where you least expect it, and to take away from those moments the kind of reflection and inspiration that only a good story can provide.

At the very least, it beats sitting through the end credits.