Wizards (Vincente series Part 4)

by Rick Nason, PhD, CFA

RSD Solutions Inc.

www.RSDsolutions.com

info@RSdsolutions.com

Continuing with a quote from the book by Kim Vicente, “The Human Factor”; 

“… so generally the wizards are put in sole charge of technological development because we don’t believe the technically challenged Humanists have anything to offer …”

Does the quote not sum up a lot of risk management systems?  As a so-called “wizard” (back-ground in physics, and a PhD in Finance), I should be appalled that someone implies even remotely that “Humanists” have something to offer in terms of risk management.  Of course risk management should be technically advanced, and developed using the best systems and techniques that technologically advanced wizards can create – shouldn’t it?

Or is there something that humanists can offer?

Follow On To Information Not Data (Vicente Series Part 2a)

by Rick Nason, PhD, CFA

RSD Solutions Inc.

www.RSDsolutions.com

info@RSdsolutions.com

In my previous blog I talked about information not data.  We have so much data coming at us that it is hard to make out the important information.  Hard to see the forest for the trees, if you will.

In risk management, where data is flying at us from all angles (and data and software vendors even more so), how do we handle it?

Seth Godin in one of his recent blogs (The Blizzard of Noise  http://sethgodin.typepad.com/seths_blog/2010/08/the-blizzard-of-noise-and-the-good-news.html ) talks about a similar situation in the general population where we are constantly bombarded with advertisements and such trying to get our attention.  In that realm it is well known that we turn to our friends to help us sort the wheat from the chaff – to separate the good stuff from the noise.  In other words, in a world flooded with impersonal information, we ironically come to rely more on more on our personal relationships.

Now think about risk management.  The trend over the last 20 years has been to make risk management more objective and scientific.  That means more data and mathematics, and less personal relationships or intuition.  However it is people and interpersonal relationships that make the world go round.  Is your risk system running on noise and data, or is it running on information and personal relationships?

Information Not Data (Vicente Series Part 2)

by Rick Nason, PhD, CFA

RSD Solutions Inc.

www.RSDsolutions.com

info@RSDsolutions.com

In the beginning of the book, The Human Factor: Revolutionizing the Way We Live with Technology, author Kim Vicente tells the well known story of the Chernobyl disaster.  However he tells it from the viewpoint of one of the plant’s operators, Leonid Toptunov.

Vicente outlines the various factors that led to the reactor getting to a critical stage, and the response of the plant’s operators that night.  The operators knew that things were not going right, but because of an experiment going on in the plant they also were not expecting things to be as normal.  Then Vicente pens this line;

“To make matters worse, the thousands of indicators on the wall sized consoles in front of Toptunov presented a bewildering array of data, but not enough information, and so the gravity of the situation wasn’t obvious to him.”

Data not information – I thought that was interesting and related to a parallel in risk management.  In our quest for risk management completeness, we often stress collecting more data at the expense of information.  Information, not data should be the quest of a good risk management system.

(A series of blogs in a few weeks will outline some of the wonderful suggestions in Stephen Few’s book titled “Information Dashboard Design” which covers the information not data problem.)