You Get The Idea

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

In my previous blog, titled "Inspiration", I quoted Einstein.  Here is
exactly what I wrote.

… but as Einstein said, "the same thinking that created a problem cannot
solve the problem" … (or he said something like that …)

This of course is not the exact quote.  According to BrainyQuote.com, the
exact quote is "We can't solve our problems with the same thinking we
used when we created them."  I was obviously off with my quote – but did
it really matter?  You got the idea didn't you?

Too often we sacrifice getting an idea across for exact correctness.  We
spend all of our time making sure that all of the i's are dotted and t's
are crossed, and by the time that is done the time for the idea has passed. 
The previous sentence was poorly worded, but you get the idea.

Inspiration

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

When writing, or working on something that is similarly creative, I sometimes
get stuck and need to do something for inspiration.  Generally I will read a
magazine or scan design websites or visit the NFB website to watch some of
their more creative films.

I believe that risk management also needs to occasionally take a step back
and get some external inspiration and perhaps more importantly some
externally inspired creativity.  Analysis by itself is fine, but as Einstein
said, "the same thinking that created a problem cannot solve the problem"
… (or he said something like that …)

Work Boots

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

My daughter, who has a part time job in a retail store that is known for
selling trendy clothing stubbed her toe on a rack of clothes.  She really
did a number on her toe, as it ripped her toenail and knocked her out of
running in a 5k race for charity this past weekend.

Probably, in North America this past week a similar event happened at least
1000 times in retail stores that have clothing racks.  If it was occurring
with the same frequency in banks, it is quite possible that a banking
regulator would pick up on this as a significant risk and require all
wing-tip shoes to have steel toes.  I just wonder why no one in retail has
thought of this yet and issued a rule that all store staff wear work boots to
protect against toe-stubbing.  Is it because they do not have risk managers?

Edith Bunker

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

Jean Stapleton passed away this week.  For those of us from a certain era
she was a staple in our households as she made us laugh at the foolishness of
Archie's bull-headed attitudes.  Ms. Stapleton of course was best known as
Edith Bunker, the long suffering, but loving wife of Archie Bunker on the hit
1970's sitcom All in the Family.

As Edith, she played a slightly old school 60's housewife who kept and
managed the house for the working husband all within the context of the more
liberal 1970's.  In most situations she would cede control to Archie, no
matter how silly his ideas were.  In that sense she was very loyal. 
However, Edith also had a strong moral sense.  Although portrayed as a
simple subservient housewife, she was a character that had a strong sense of
right and wrong.  When push came to shove she would always step up to the
plate for right.  That is just one of the many reasons that audiences loved
Edith.  (It sure wasn't her singing on the opening credits.)

In risk management, managers too often tend to be subservient to the risk
management department, or to the regulators, or perhaps even more frequently
to their superior bosses.  Most of the time this is fine, and indeed it is
proper.  However, just like Edith, managers should develop a strong sense of
what is right or wrong when it comes to risk management, and they should not
be afraid to "pull an Edith" and step up to the plate for right.

The Middle

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

A recent report by Toronto Dominion Bank shows that the demand for "middle
skill" workers is diminishing.   The need for high skill workers is
increasing, while the demand for low skill workers is more or less staying
the same.  The report makes the obvious statement that this is leading to
increasingly polarization in the workplace.  What this ultimately means for
the overall economy as well as what the long term social implications will be
is anybody's guess.  It does appear to be a bit of a troublesome trend. 
One way it may play out is as outlined by Kurt Vonnegut in his first novel
"Player Piano" which I previously blogged about. 
(http://rsdsolutions.blogspot.co.uk/2010/02/player-piano.html [1])

Anecdotal evidence would indicate that something similar is happening in risk
management.  Either you are becoming a highly trained specialist in risk, or
a low skill worker in risk.  The technical and regulatory details of
managing risk are too convoluted for the typical manager to efficiently deal
with, or the paperwork required is perceived as too low value for the typical
manager.  What the long term implications of this all is remains anyone's
guess, but my gut feeling is that it is a trend that should not be encouraged
for prudent risk management.


[1] http://rsdsolutions.blogspot.co.uk/2010/02/player-piano.html

Airport Lounge

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

As I write this, I am sitting in an airport lounge.  My flight has been
cancelled.  I am on a later flight.  The later flight may be delayed –
not sure yet.  The only reason I am making this trip is because two months
ago I spent a day in the airport lounge as flight after flight got
cancelled.  This current trip is the make-up trip for a training course I
was contracted to run.  I sit and wait.  Yes, I am enough of an experienced
traveler to know that these things happen.  I have packed work with me so it
is not total dead-time (I am getting my weeks work of blogs done for
example.)  I also booked myself an early flight so I would have a higher
probability of getting to my destination on time in case there was a delay. 
However all of the contingency risk planning does not make it less
frustrating.  Sometimes in risk management, as in life, there is not much we
can do when circumstances go against us.  That is not bad risk management;
it is simply the way things happen.

Discipline Versus The Whim

 

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

I was listening to an interesting radio show the other day about how artists
work.  As readers of my blog know, I believe that as risk managers we have
to have at least a touch of thinking like artists.  The radio show went on
about how artists tend to fall into two very distinct camps when it comes to
approaching their work.  Some artists are very disciplined and work a set
time each day and in a designated spot.  They are creatures of habit and
their habit reinforces their discipline.  Other artists take the opposite
approach and work when and only when the felling or whim strikes them.  It
was argued that while the latter approach often leads to less output (but not
always), it does generally lead to more creative output.

Now I am not suggesting that risk managers only work when and where they feel
like it, but perhaps it is possible to scale back the strict habit and
discipline routines.  Perhaps?