by Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.
A fox knows many things. A hedgehog knows only one thing, but knows it well. Is your risk management unit a fox or a hedgehog? There are arguments for both strategies (for example the well known book Good to Great argues that hedgehog firms perform best, while most will agree that having a portfolio of ideas is preferable). What is not acceptable however is not knowing which category the firm falls into.
A firm that thinks it is a fox, when it is in reality a hedgehog is as stupid, weak and exposed as a firm that thinks it is a hedgehog when in reality it is a fox. So what is it? Is your risk management unit a fox or a hedgehog?
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