On our annual canoe trips down the Guadalupe (close and charming), Devils (aptly named), Pecos (my favorite), and Buffalo (in Arkansas, yet surprisingly pleasant) rivers, I immediate sidle up to my buddy Russell whenever the thunder starts rumbling. Russell survived a lightning strike while rock-climbing in New Mexico many years ago, and I figure the odds of him getting zapped again are pretty much nil.

Of course, my figuring is completely wrong – which means I probably could oversee the vast majority of corporate natural disaster preparedness programs. My thinking is a prime example of the “Gambler’s Fallacy,” a misconception that recent events will affect future events. If I flip a coin and it comes up tails seven times in a row, what are the odds that the coin comes up tails on my eighth flip?

Before you answer that, answer me this: Why do so many business continuity management (BCM) programs suffer from Gambler’s Fallacy, denial, and other human psychology-related shortcomings? It’s a question that continues to frustrate and fascinate me, as I mentioned last month in the wake of swine flu’s official downgrade.

Happily, FM Global is extremely interested in addressing this question. more

If you had any doubts that virtualization was the future of corporate IT, the VMworld 2010 conference held in San Francisco 2 weeks ago should lay those to rest. The conference, an annual gathering of VMware users, attracted more than 17,000 customers, partners, press, and analysts, and 233 sponsors and exhibitors. This went beyond the usual virtualization for business discussion. The focus moved to virtualization in the cloud.

Although there are other virtualization players, mainly Microsoft, VMware clearly has emerged as the virtualization leader in the x86 (PC server) world. CommVault, a storage provider, released the results of its survey of more than 10,000 customers and found that 83 percent identified VMware as their virtualization platform.

For the CFO, the question is not whether the organization should adopt virtualization, but how extensively it should virtualize and how fast. For starters, using virtualization to consolidate the proliferation of x86 servers is a no-brainer for the increased server utilization alone. Check out the CommVault server results here. more

Over the next six months, we can expect to hear a lot about beleaguered businesses being snapped up by stronger companies looking to buy some good old-fashioned strategic value. The M&A experts predict a rising tide of so-called “distressed opportunities,” sometimes called good businesses with bad balance sheets. CFOs assessing one of these — maybe a storied brand in an adjacent market — should dissect the revenue and cash flow drivers with great care. Some will be overly tempting, and the pressure will mount to make a fast bid.

As numerous reports have noted, America’s largest companies amassed hefty stockpiles of cash during the recession. They had the scale, in terms of cash flow, to keep the ship afloat while they quickly threw excess inventory and capacity overboard. They were able to make deep cuts in operations without losing momentum. A number of them had the financial moxie to refinance expensive debt by issuing newer, lower-priced debt. more

Crisis management can create new risks — and crises. Just ask BP.

While testifying before the House Energy and Commerce Committee this week, BP was asked to disclose how much it has spent on advertising from April through July. The answer, a total of more than $93 million, irked U.S. Representative Kathy Castor (D-Fla.), who maintains that the company spent more on “polishing its corporate image” than it spent on directly helping Gulf Coast communities and business recover from the oil spill ($89.5 million in grants to Louisiana, Alabama, Mississippi, and Florida).

As they say (or at least once said) in public relations, “perception is reality.” more