When Michael Zerbs joined Algorithmics Incorporated in 1989, “risk management” wasn’t a term that captivated business audiences. Today, with corporate scandals making headlines in North America and Europe, analyzing the possible negative effects of risk against the potential gains of a business opportunity has become a major industry. “Risk is at the heart of every business decision,” says Zerbs, 39, who earned his MBA from U of T’s Joseph L. Rotman School of Management in 1989. “Risk itself isn’t good, isn’t bad. It’s just a fact of doing business.”
Zerbs was appointed to Algorithmics’ board of directors in 2001 and earlier this year he became the company’s CEO. “We help people to visualize what kind of risks they’re undertaking with their investment decisions,” he says. In his view, risk management is only going to get more important. “With the complexity of business decisions and the complexity of the financial instruments…it has become much harder to understand the risks people are taking,” he says. The lessons aren’t restricted to the financial industry: one of Algorithmics’ American clients is using risk-management models to decide whether to fill in potholes or rebuild a highway. For Zerbs, the next frontier is helping companies to integrate risk analysis into everyday operations instead of waiting till a crisis hits. It sounds like a safe bet.