By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.
With the title of relationships, and the recent Ashley Madison
website hack, you probably thought I was going to write about
cyber-security. I’m not. I am not an expert on cyber-security and that
is definitely one technical aspect of risk to make sure you have the right
portfolio of experts managing your downside exposure – pun intended for the
specific case of Ashley Madison.
No, instead of Ashley Madison (but now that I have your attention),
I want to write about a concept from a new book called “Humans are Underrated”,
by Geoff Colvin.
I believe this is one of the more interesting and insightful
business books to come along in a long time.
The book explores the value of human work in the age where the computer
and the robot can do more and more. In
essence the book asks how humans can add value when almost everything a human
can do a robot or computer can do better (or likely will be able to do better
sooner rather than later).
Colvin convincingly argues that the computer will always be able to
outperform the knowledge worker – that is a worker who relies on what they know
for their value-added. For the most part
I believe that this is already true. In
the rare cases where it may not be true, then modern communications means that
a single expert can essentially service the whole world, and thus there is not
an extensive need for a global army of local knowledge workers.
One of the points that Colvin makes is that in order to successfully
compete against computers and robots, that knowledge workers must transform
themselves into relationship workers. A
computer may win on knowledge, but a computer will not win on relationships –
nor in most instances do humans want to have the computer win on relationship
intensive situations.
These insights pose some issues for risk managers. Since the mid 1990’s, risk management has
shifted hard towards a knowledge intensive field. Instead of relying on relationships and the
wisdom of experienced managers, it has become a field of data crunchers and
quant jocks who possess a variety of mathematical degrees and
certifications. While the knowledge is
necessary, it has come at the expense of relationships. To anti-paraphrase a 1990’s domestic diva,
“it’s not a good thing”.
What is the relationship of your risk managers amongst the front
line operational staff? I bet that
question brought a bit of a grimace to your expression – didn’t it? With virtually every organization we work
with, risk management is seen as having a less than desirable relationship with
the line. Perhaps Colvin’s book is the
wake-up call that risk management needs to think about how it accomplishes its
task. The computer and the robot can
have the knowledge aspect of risk management, but risk management needs to
develop and control the relationships.
It is a 180 degree shift in current risk management thinking.
But now, back to Ashley Madison and looking at
more gossip about what relationships will be exposed.
