by Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.
We all understand the power of diversity and the evils of groupthink that is caused by a lack of diversity in thought, opinions and ideas. However have you taken time to look around at the key members of the risk team at your organization? (By the way, the key members of your risk team may not be a part of the risk team.) How much diversity is there in your risk management system? When you closely examine the structure you will see two, perhaps three distinct clusters of individuals – perhaps the wise old experienced ones who hold the institutional knowledge of how things have been done for the last century, and those with advanced degrees of some shape or form that generally are quantitatively based. No offense, but that is not the most diversified of portfolios. To rectify the situation I propose at least four new hires for your organization’s risk system. Unfortunately I expect few will take my advice, but for those that do I strongly believe that there will be unexpected rewards and pleasant surprises.
In no particular order …
Each risk system should have an ecologist. An ecologist understands how nature works, and how it works in all of its complex glory. The biologist Robert May shook up the field of ecology back in the 1970’s by introducing the study of complexity into biology and in particular in natural systems. Complexity theory is now a major part of ecology and for this reason your risk system needs ecologists. Business is its own type of natural system, and it is evident (although largely unrecognized) that complexity applies to business just as much as it applies to ant colonies or species population dynamics. Ecologists can help your organization make this critical leap in thinking.
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