Wednesday, May 11, 2016

Rigor

By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.
I am an admittedly big fan of Seth Godin and his writings – particularly his blogs.  However earlier this week, in a blog titled “Rigor”, I believe he was inexcusably off-track.  Seth Godin wrote “Rigor is a focus on process.”  With this I have no problem.  His next sentence however got me to sit up and eject an enthusiastic “Bullshit!”  The offending sentence and more specifically the offending second clause was; “Paying attention to not just how you do things, but why.”  The “but why” struck me as offensively wrong – particularly when it comes to thinking about rigor in risk management.
In my experience, the vast majority of people who have an allegiance to rigor have an inversely proportional understanding of why they should be so rigorous.  Rigor in risk management I find is often used as a shield to hide the fact that no one can put forward a coherent explanation for the why of the process.   
In this age of regulation commingled with risk management, we need to be more rigorous about understanding – and constantly questioning – the why, than being rigorous about the process.  Furthermore rigor needs to be rigorously matched to the appropriate why because the wrong rigor for the wrong why is the worst form of risk management there is.

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