Cerebral Leaps

 

*/By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc/*

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In an article in the September 27, 2013 edition of the Report on Business
magazine, published by the Globe and Mail newspaper, there is a fascinating
article on the Bank of Canada's Governor Stephen Poloz.  The article is
written by journalist Kevin Carmichael.  It is one of the few articles that
have emerged that has provided a bit of a personal insight into the still
relatively new Governor.

The wide ranging article covers several issues, but there was one comment
made that just popped out at me, and one that I thought was rather
refreshingly honest for a public figure to make.   In talking about the
actions of the bank of Canada during the 2008 financial crisis, Poloz
comments,  "We were fighting fires, but it was not a cerebral leap
forward."

How often are we honest enough to admit to ourselves, much less others, that
we are simply fighting fires, rather than making "cerebral leaps"
forward?  How often do we confuse the two activities?  How much focus, time
and energy do we put on fighting fires versus "cerebral leaps" forward? 

What would the current state of risk management and risk regulation be if
more risk managers, executives and regulators put more focus on "cerebral
leaps" and less on fire firefighting?


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