by Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.
Just started reading “The Big Miss: My Years Coaching Tiger Woods”, by Hank Haney. I need to state upfront that I am a tennis player, so that obviously makes me “anti-golf”, but a good risk manager always tries to think about how the “other side” thinks.
As someone who grew up playing hockey, went to college essentially to play tennis, and has daughters who play competitive rugby, I always have to wince when golfers talk about how physically demanding and tough their sport is. Reading Haney’s book however I think I finally figured it out why golfers say that, and I think there is a real lesson for risk managers here – so bear me out for another 40 seconds or so.
In tennis, hockey, rugby, MMA, (put whatever sport you want in this sentence – except golf, bowling or any sport that depends on Russian judge’s toe signals to determine the score) you have to react to what your opponent is doing. You can have a plan and a strategy going into the match, but you still have to be flexible, respond, counterattack and be willing to act decisively but purposefully in the moment. In golf you have to hit a ball that is just sitting there. You have time to think. You have time to overthink. You have time to overthink your overthinking.
Golf is complicated. Virtually all other sports are complex. As my regular readers know, I make a very clear distinction between complicated systems and complex systems. They require different skills. They require different approaches.
How does this fit into risk? Simple – risk management is complex like rugby, but we try to make it “hard” and complicated like golf. Just as Tiger Woods (despite his Navy Seal style training) would not last long in a New Zealand All Black’s scrum, few tight props could wait until the 19th hole to get their refreshment. Golf, rugby – not the same thing. Golf, risk management – not the same thing. Let’s stop trying to make risk management complicated like golf!
(P.S. if you don’t know the difference between a complicated or a complex system, read my article “It’s Not Complicated” http://www.rsdsolutions.com/files/Nason-RMA%20Article%20Mar-11.pdf or buy the forth-coming book of the same title.)
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