by Rick Nason, PhD
Partner RSD Solutions Inc
Had dinner last night with a junior trader. Really bright guy. Has a terrific future ahead of him. Along with the usual conversation about sports, cigars and travel etc., we starting talking about work. In a nutshell he laid out many of the issues that he observed in his workplace. The conversation was nothing out of the usual, and exactly what you would expect when two guys get together for some brew and grub.
Walking back to my hotel I started to think about how useful it would have been for senior risk managers to have listened in to our conversation. This front line trader knew where all of the weak links in the system were, the daily struggles to deal with them, and had some great ideas of how the issues could be remedied.
What my friend did not have a knowledge or an appreciation for is all of the political B.S. that the senior risk people have to put up with on a daily basis as they try to align the various functional units, each of which has a specific agenda (and a senior manager who has their own agenda that is likely disconnected from the front lines).
When I was in B-School in the early 90’s, one of the key buzz-words was MBWA – management by walking around. In other words, senior managers should keep a handle on the business by keeping in contact with the front lines.
Dinner last time convinced me that it is time for risk managers to RMBWA.
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