by Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.
At the time of this writing there are revolutions going on around the world. The “Arab Spring” is in full bloom. There are still some revolutions to be settled one way or the other, but it is clear that things are likely to change dramatically in the Middle East (and elsewhere) over the next five years.
Revolutions are upsets. They are a destruction of the status quo. They are dramatic action for situations where only dramatic action will suffice. They are never easy, and even with the best of revolutions there is always the question of “So now what do we do?”
Contrast a revolution with an evolution. Evolutions are slow, glacial, and generally not sensed when they are occurring. Evolutions sometimes take generations before effects are noticeable.
Evolutions and revolutions are at opposite ends of the same scale. One is fast, immediate and very disruptive, but quick and effective. The other is slow, hardly noticeable and may take generations to be effective.
The other major difference between evolution and revolution is the generation of ideas. Evolution thrives on existing ideas and only gently adjusting them. Revolution is all about bold new ideas and creating new paradigms.
If we accept the premise that risk management should not stay static, what is the most appropriate form for change? Is it slow and steady evolution, or fast but disruptive revolution? There are pros and cons for both, and if you take the time to think about it seriously, the answer for your organization just must surprise you.
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