Size Matters

by Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.
www.RSDSolutions.com
info@RSDsolutions.com

There is a different feel to working in a small entrepreneurial “shop”.  In an organization where there are a relatively small number of employees, everyone has a sense of ownership and responsibility.  There is more energy and more collaboration – since that is the only way that an organization with few resources can survive.

It is because of this size issues that many companies – particularly in manufacturing - have adopted the strategy of once a unit gets beyond a certain size, they intentionally break themselves into smaller autonomous units.  It keeps the overall company fresh, and inspires the entrepreneurial feeling and sense of ownership that is so hard to maintain in a larger unit.

In the quest for risk perfection, there is an argument to be made that firms have developed risk groups that are simply too large for the professionals within the unit to feel the same sense of ownership and responsibility  than they might  in a smaller less centralized (and less bureaucratic) grouping.  Perhaps it is time for risk units to take a tactic from the manufacturing world and split themselves into smaller autonomous units, so risk professionals can once again feel that they have responsibility and accountability for their actions and decisions.