Mintzberg

 

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

Henry Mintzberg is a management consultant and a business school academic. 
Perhaps he is best known for his book "Managers, Not MBAs".  I really
like, and agree with most of what Mintzberg writes about, although many find
him too controversial.  He has the audacity to claim that business schools
aren't always all they are cracked up to be.  His writing was the
inspiration for an academic piece I wrote and published called "Business
School Myths", which I think I outlined in a blog a few years ago.

Mintzberg, like Drucker, believes that business is more than just knowing a
set of formulas, or a list of best practices.  In essence (and I am greatly
paraphrasing here) he argues that business is about wisdom, intuition and
thinking.  These are ideas I strongly believe in, and ideas that I strongly
believe need to be practiced more in risk management.

In reviewing some of my notes on Mintzberg that I am compiling for a book I
am writing, I came across this quote, which I thought was valuable to risk
managers in particular.  The quote is:  "Certainly we should measure what
we can – so long as it does not bias what we can't.  The trouble is that
it often does.  It drives out judgment, without which all measurement is
useless." 

Do you agree or disagree? 

Warning Systems 2

 

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

In my previous blog I wrote about the stages of warning lights and bells that
exist in my car to warn when the car is starting to lose traction, and then a
heightened set of warnings when the car has lost traction completely.  With
this in mind, I was driving home the other night – on a clear dry road I
might add – when all of a sudden loud warning bells and a big red caution
sign that I had not seen before starting flashing on my dashboard.   What
the heck is going on I thought?!  Thinking it must be something quite
serious, I immediately pulled over to the side of the road.  In any case it
would have been unsafe to drive with those distractions going off.

After I safely got pulled over and parked I started to try to diagnose what
the problem was.  The car was not on fire, and all of the gauges were at
normal settings.  The car appeared to be running properly so I was a bit
stumped (and yes, my seatbelt was correctly fastened).  I took out the
owner’s manual to check on the warning light and bells which were still
activated.   I soon was able to solve the problem.  It was that my
windshield washer fluid was low – not empty, just low.   How
ridiculous!   Having a yellow warning light, maybe, but seriously, a
flashing red light and bells for having low windshield washer fluid
levels?!  This must be something that a regulator thought was a good idea.

Warning Systems 1

 

By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.

Here it is the middle of April and I still do not have my snow tires off. 
No, it is not a case of procrastination (well actually it is), but a case
that it is still snowing.  (Thanks global warming!)

My car is well equipped for the snow, I have snow tires, and like most cars
these days my car has an automatic traction control system that kicks in when
the car starts to lose traction.  A while ago I was driving with my daughter
(who also is of driving age) and in the slippery conditions the car started
to lose traction.  The traction control system kicked in and a little yellow
warning symbol starting flashing on the dash.  My daughter, who like all
teenagers knows everything, made the brilliant observation that if the car
was starting to skid, the last thing you wanted to be is distracted by a
flashing warning light.  A fair observation in my opinion.

A little further down the road, (a wide road with lots of space on the corner
I might add, and with no cars or pedestrians around), my former dreams of
being a professional rally driver kicked in and I decided to intentionally
swing the car sideways around a corner in order to have a bit of fun.  As
expected the traction control started to kick in and the warning light
flashed.  However I had the car too far gone and thus the traction control
was quite powerless to prevent my somewhat reckless driving.  At this stage
bells started ringing.  At this my daughter piped in, “so you get a
flashing light when you are partially out of control and warning bells when
you are totally out of control.”  She then added, “What kind of an idiot
needs a warning bell to tell them they are skidding out of control?” 
Another fair observation in my opinion.

All too often control systems are like that.  They flash most noticeably,
and distractingly, when the situation is already too far gone.  In those
times, what is needed is focus, not distractions telling you the obvious.

By the way, we made it to our destination and back home safely – although I
now have a new game to play with my car …