Friday, February 4, 2011

Snap the Fingers on Risk. Part 1 of 3

by Rick Nason, PhD, CFA

Partner, RSD Solutions Inc

www.rsdsolutions.com

info@rsdsolutions.com

 

Teaching in an MBA program I have lots of students asking for advice on how to get a job.  With them I always start with the “snap the fingers test”.  The “snap the fingers test” works like this:  Assume that I had magical powers and that upon a snap of my fingers that you would be able to switch places with anyone in the world.  Who would that be? 

Students generally give a knee-jerk reaction such as Bill Gates, Warren Buffet, Mick Jagger, etc.  Upon a little bit more self reflection (as I look at them with a “get real” look on my face), they actually come up with a reasonable answer or more likely they cannot think of anyone (it has to be a specific person – a role such as fireman will not work with me). 

Now how does this relate to risk management?  Simple.  Assume that I had magical powers and upon a snap of my fingers, your risk function could switch places with any other company’s risk department.  Who would you choose?  Are you capable of giving a non-frivolous answer?  Can you name a specific company or risk department that you would like to be like?

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