The Most Important Training Question

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

/(Repost of blog from September 9, 2009)/

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I often get requests for training seminars where the client has a long list
of topics that they want covered.  These lists will often be accompanied by
varying degrees of details on the current knowledge level of the participants
as well as their current job functions.  Clients that having training
departments will also have suggestions as to timing, format and pre-seminar
and post-seminar activities.  While this data is most welcomed, it misses
the most important training question of all:  What is it that you want the
seminar participants to do after the training that they could not, or would
not do before?

When confronted with this question, training managers (or more often than not
now with the parsing of training departments it will be the line manager)
often stumble with their words.  They simply do not know what the change in
action is that they want to have occur because of the seminar.  They have a
well defined body of knowledge that they believe needs to be conveyed, but
the exact business reasons why the participants need this knowledge is
generally extremely hard for them to articulate.

Often when I actually conduct the seminar I realize that many of the
participants already have a fairly comprehensive knowledge – or at least a
working knowledge of the material to be covered.  The issue therefore is not
knowledge per se, but performing actions that utilize that knowledge.  There
are many reasons why employees may know something yet not act on it. 
Self-esteem, confidence, not understanding the rationale behind the
knowledge, not understanding how important acting on the knowledge is for the
company or unit to achieve its objective, or simply that it is much easier to
act on other knowledge by default or through habit.

This brings home the point that professional training should be about
changing actions, changing confidence and changing the ability of the seminar
participant in helping the organization to succeed.  Successful training is
only 1 part technical knowledge.  It is 10 parts action, 10 parts rationale
behind the action, 20 parts confidence and motivation in taking that action
and 30 parts having the right objectives for the training program in the
first place.

One training manager that I once worked with strongly questioned this line of
reasoning, until I asked the question: "Do you want employees who know
things, or employees who do things?"  That question brought it all home.

The next time you call us (or another training firm for that manner) be
prepared to have a dialogue about the answer to the question, "What is it
that you want the seminar participants to do after the training that they
could not, or would not do before?"  You will be glad you did.


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Domestic Risk Management

*/By Stephen McPhie, CA/*
*/Partner, RSD Solutions Inc./*

/(Slightly late repost of blog from Valentine's Day, 2010)/

Valentines Day is an appropriate time to ponder on some aspects of personal
risk management, especially for those of us who have spouses or partners. 
Actually, if some thought had not gone into Valentines Day before now, the
risks of arguments, domestic splits, divorce or even being told that your
partner has a headache increases dramatically.

A basic domestic risk-hedging programme could include ordering flowers.  The
addition of a present adds extra cost to the programme but can provide a
better hedge.  Booking a table at an expensive restaurant is again more
expensive but can provide the most effective protection against domestic
risk.  Each of these provides a progressively more expensive risk management
programme and the one chosen would depend upon a number of factors including
risk appetite, past experience, etc.

Of course, the risk management programme can be poorly conceived or
implemented.  If, for example, the present is a book entitled "How to Stop
Snoring" or "10 Steps To A Cleaner House" or the dinner is not at a
romantic venue with subdued lighting, but at the local sports bar when an
important game is on, then the risk management programme can significantly
increase risk.  Of course, the same risk programme can work for good or bad
depending on the circumstances.  So in our sports bar example, if it is a
female taking her boyfriend there she could gain a whole lot of brownie
points, whereas the other way round, the boyfriend may well end up wearing a
pitcher of beer and going home alone.

Looking at the downside, a hedge may also include an escape plan.  I am told
that France is a much friendlier jurisdiction then England for the male side
of a relationship in a divorce.  (There are some people I am hoping won't
be reading this!!!)  You only have to spend a night in France to claim
residence and give the courts jurisdiction … and assuming you file first!

All the above considerations are completely applicable in a corporate context
and show that a risk management programme is individual to every company and
should be developed and implemented according to specific circumstances.

How do you handle your domestic risk management?

For my part, I intend to rush out to the store immediately I stop typing.

Relevance

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

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I am known as a bit of a thorn in the side of some of my academic
colleagues.  The issue is that I believe that a lot of the research (and
teaching) that is being done in finance, and in risk management in particular
is being done more for the benefit of the researchers than for the benefit of
society.  I will defend pure / theoretical / academic research until the end
of the world.  However when almost ALL of the research is purely academic
then I think there is a problem.

One of my colleagues is on a task force looking at the relevance of
research.  Knowing my arguments for more relevant research he out of the
blue popped into my office a short time ago to ask what MY definition of
relevant research is.  I have to humbly admit that I did not have a
ready-made answer for him, and indeed the question caught me totally
off-guard.   My answer was along the lines of "research that has a 50%
probability of being implemented in some way by a manager within five
years".  I was not totally satisfied with that answer, but it was the best
I could do on the spot.  I have however thought about the question a fair
bit over the week or so since my colleague approached me with the question.

Upon further reflection I would like to change my response to "research
that attempts to answer a question that a manger should be asking".  This
response however also raises issues.  One major issue is that many managers
do not know the questions they should be asking.  Like lawyers, managers
tend to ask the questions that they already know the answer to, rather than
the questions they suspect might not have an implementable answer.  Another
related issue with this definition is that the answer to most great
management (and risk management) problems is "maybe". 

Management, and risk management in particular is a messy and complex field. 
Academics however – with their need to publish or perish – are much
better suited to answering complicated questions than complex questions. 
Research results of "maybe" do not get published, and thus do not get
rewarded.  Additionally, frequently only complicated questions have readily
available data, while with complex questions the data is often missing,
nebulous or fuzzy at best.

The best questions of risk management deal with unknown unknowns, or risk
culture, or why people act in irrational ways, or why the best laid plans of
mice and men fail.  These are great questions that have so far proven to
have not so great answers.  However that does not mean that we should not
keep asking those questions and trying to find "better answers", even if
we cannot find "answers".


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