Increasing Uncertainty

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

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A quick search of business efficiency and personal development sites on Twitter or Linked-in will provide a long list of articles on increasing certainty or equivalently decreasing uncertainty.  Of course the risk management sites, both academic and professional are about nothing else but reducing uncertainty and increasing certainty.

Another search however will reveal that there are virtually no postings about how to increase uncertainty.  However a more careful distinction needs to be made.  For many things uncertainty is desirable.  I am actually a big fan of uncertainty.  Uncertainty means opportunity.  Uncertainty means greater potential for those who are willing to work harder or think smarter.  Uncertainty means we have a reason to get up each and every day and be excited about the tasks before us.  Uncertainty means we have something to look forward to.  Uncertainty means that risk professionals have jobs and value to provide.

After all, the only things certain are death and taxes, and both of those I am not a big fan of.

Acknowledgement

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

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I am fortunate enough to live on a very quiet street.  The traffic on my street as well as the connecting streets is quite minimal.  At certain times of the day, the “traffic” of deer might outnumber the traffic of cars (well, at least before 6 am).  Therefore it was relatively unusual the other day when there happened to be two cars on the road at the same time.  I was following a pickup truck down my street.  A virtual traffic jam by our usual standards.

At the corner the truck driven by my neighbor realized he needed to turn around and go home.  Not thinking to look around to see if there was anyone else on the street he pulled a U turn in the middle of the intersection just as I was starting to pull out behind him.  We both noticed in time and avoided a collision, but he quickly signaled with an embarrassed looking mea culpa wave that he was in the wrong. 

We all make little and mostly harmless errors in judgment.  It is part of human nature to not always be vigilant about our risk shortcuts.  Risk management is not going to change this about human nature – hard as it might try.  As this is the case, the best that risk management can do is to create a culture where at a minimum that one acknowledges their risk slips. 

My neighbor made a risk slip, but the culture of our quiet neighbourhood required that he acknowledge the mistake.  No harm, no foul, and no one got into a road rage fiasco.  A simple acknowledgment of a mistake solved the issue.  I suspect that next time he will be more careful before assuming he is the only one driving on our street and the problem becomes naturally solved.

Horoscopes

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

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One of the interesting pieces of data that our wired social media driven world gives us each day is a listing of the most read articles on each media site.  Often a reading of what is most popular is more interesting and thought provoking than what is in the actual news site.

Something that has always amused me is that the horoscope is often in the “most read” section.  I guess it stands to reason since the reading of everyone’s fortune cookie is often the best part of going out for Chinese food with friends.

Perhaps more seriously though, the popularity of horoscopes is a sign of how desperate we are for a glimpse into the future, no matter how feeble or inaccurate that glimpse might be. 

Risk management, like horoscopes, is about the future.  The question is whether risk management is helping us manage the future better than our horoscopes are.  Are your risk management reports making the most read section?