*/By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc./*
*/Follow us on Twitter/* [1]
I just finished reading Chris Hadfield's book "An Astronaut's Guide to
Life On Earth". It was a Christmas present to me from my youngest
daughter, and it is a fantastic read. Chris Hadfield for those of you who
don't know (which would mean the non-Canadian reader's of my blog) is a
Canadian Astronaut who served as Commander of the International Space Station
in 2013. He might be best known for his YouTube video Space Oddity
http://www.youtube.com/watch?v=KaOC9danxNo [2] which has over 20 MM views.
For risk managers there are wonderful lessons from space outlined in this
book that can be adapted to the organization. In fact I am going to make
the book a feature reading for a seminar in my Enterprise Risk Management
class. Read it and see if you do not agree with me. A very engaging book,
but also a very educational book for the risk manager.
[1] https://twitter.com/rsdsolutions
[2] http://www.youtube.com/watch?v=KaOC9danxNo
Friday, January 31, 2014
Thursday, January 30, 2014
Einstein was Wrong
*/By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc./*
*/Follow us on Twitter/* [1]
Einstein is famous for having said that "Insanity is doing the same thing
over and over again and expecting a different result". That quote is only
true when things are complicated. However, most things in business and in
risk are complex. When things are complex, then the opposite is true and
insanity is doing the same thing over and over again and expecting the same
result.
If you are new to complexity, or forgot the difference between a complex
system and a complicated one, check out my article in the RMA a few years
back titled "It's Not Complicated". Here's the link
http://www.rsdsolutions.com/quotit039s-not-complicatedquot-article-rick-nason-rma-journal-march-2011
[2]
Alternatively you may wish to listen to the associated Tedx talk. That link
is here. http://www.youtube.com/watch?v=FQO_wxxinH4 [3]
[1] https://twitter.com/rsdsolutions
[2]
http://www.rsdsolutions.com/quotit039s-not-complicatedquot-article-rick-nason-rma-journal-march-2011
[3] http://www.youtube.com/watch?v=FQO_wxxinH4
Partner, RSD Solutions Inc./*
*/Follow us on Twitter/* [1]
Einstein is famous for having said that "Insanity is doing the same thing
over and over again and expecting a different result". That quote is only
true when things are complicated. However, most things in business and in
risk are complex. When things are complex, then the opposite is true and
insanity is doing the same thing over and over again and expecting the same
result.
If you are new to complexity, or forgot the difference between a complex
system and a complicated one, check out my article in the RMA a few years
back titled "It's Not Complicated". Here's the link
http://www.rsdsolutions.com/quotit039s-not-complicatedquot-article-rick-nason-rma-journal-march-2011
[2]
Alternatively you may wish to listen to the associated Tedx talk. That link
is here. http://www.youtube.com/watch?v=FQO_wxxinH4 [3]
[1] https://twitter.com/rsdsolutions
[2]
http://www.rsdsolutions.com/quotit039s-not-complicatedquot-article-rick-nason-rma-journal-march-2011
[3] http://www.youtube.com/watch?v=FQO_wxxinH4
Wednesday, January 29, 2014
Movie Casting
*/By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc./*
*/Follow us on Twitter/* [1]
If you were a director of a Hollywood movie and you needed to cast a Risk
Manager, what feature characteristics would you look for the actor to
portray? Would creative be on the list? What about inventive?
Exciting? Engaging? Stylish? If not these characteristics, then why
not?
[1] https://twitter.com/rsdsolutions
Partner, RSD Solutions Inc./*
*/Follow us on Twitter/* [1]
If you were a director of a Hollywood movie and you needed to cast a Risk
Manager, what feature characteristics would you look for the actor to
portray? Would creative be on the list? What about inventive?
Exciting? Engaging? Stylish? If not these characteristics, then why
not?
[1] https://twitter.com/rsdsolutions
Tuesday, January 28, 2014
Quora
*/By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc./*
*/Follow us on Twitter/* [1]
I am a world-class procrastinator. I figure if you are going to have a bad
habit then you may as well be good at it. One of my favorite sites to
peruse while avoiding a task (such as writing blogs) is www.Quora.com [2].
Basically it is a site that satisfies the inner nerd in all of us. On the
site people ask all kinds of weird, wonderful and whimsical questions –
mainly science and more specifically physics related. Wonderful way to
enlarge your brain and pass the time with offbeat scientific trivia.
The odd thing about Quora is that although most of the stuff is totally
irrelevant, it does serve a purpose. It creates a forum where people can
interact intellectually and from that comes fantastic ideas and new ways of
thinking.
Now contrast Quora with the various risk based blogs on Linked-in and such.
There the discussion is very serious and everyone tries to be either as
practical or as academic as possible. For the most part the discussions are
brain-dead rehashing of the brain-dead rehashings from the previous month.
There is no whimsy; there is no wonder. There is no asking a silly question
for the sake of asking a silly question. As a result the breakthroughs and
the creative thoughts are missing.
Risk managers need to loosen up and let their inner child run free with the
offbeat questions. The answers and the results might be surprising.
[1] https://twitter.com/rsdsolutions
[2] http://www.Quora.com
Partner, RSD Solutions Inc./*
*/Follow us on Twitter/* [1]
I am a world-class procrastinator. I figure if you are going to have a bad
habit then you may as well be good at it. One of my favorite sites to
peruse while avoiding a task (such as writing blogs) is www.Quora.com [2].
Basically it is a site that satisfies the inner nerd in all of us. On the
site people ask all kinds of weird, wonderful and whimsical questions –
mainly science and more specifically physics related. Wonderful way to
enlarge your brain and pass the time with offbeat scientific trivia.
The odd thing about Quora is that although most of the stuff is totally
irrelevant, it does serve a purpose. It creates a forum where people can
interact intellectually and from that comes fantastic ideas and new ways of
thinking.
Now contrast Quora with the various risk based blogs on Linked-in and such.
There the discussion is very serious and everyone tries to be either as
practical or as academic as possible. For the most part the discussions are
brain-dead rehashing of the brain-dead rehashings from the previous month.
There is no whimsy; there is no wonder. There is no asking a silly question
for the sake of asking a silly question. As a result the breakthroughs and
the creative thoughts are missing.
Risk managers need to loosen up and let their inner child run free with the
offbeat questions. The answers and the results might be surprising.
[1] https://twitter.com/rsdsolutions
[2] http://www.Quora.com
Friday, January 24, 2014
March Madness in January
*/By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc/*
*/Follow us on Twitter/* [1]
I have had the material ready to write a blog about the inability of experts
to predict college sports and I was going to compare it to the inability to
predict risk events. As my example I was going to use the results of the
pundits at predicting the outcome of the College football bowl season (in
case you are interested the prediction ability is the same as flipping a
coin).
As I sat down today to write the blogs for the week, I desperately looked for
something that would distract me and allow me to procrastinate yet again.
And then it happened – I got a notice from the Wall Street Journal that
Warren Buffett (through Berkshire Hathaway) was backing a $1 Billion prize
for anyone who can fill out a perfect March Madness college basketball
bracket.
The sage of Omaha knows the odds against predicting the future are infinitely
small. What he may not realize is that the number of people willing to try
may be almost equally infinitely large.
The odds of predicting risks successfully are also infinitely small, but like
those who participate in an office pool for March Madness, the number who try
seems to be infinitely large.
[1] https://twitter.com/rsdsolutions
Partner, RSD Solutions Inc/*
*/Follow us on Twitter/* [1]
I have had the material ready to write a blog about the inability of experts
to predict college sports and I was going to compare it to the inability to
predict risk events. As my example I was going to use the results of the
pundits at predicting the outcome of the College football bowl season (in
case you are interested the prediction ability is the same as flipping a
coin).
As I sat down today to write the blogs for the week, I desperately looked for
something that would distract me and allow me to procrastinate yet again.
And then it happened – I got a notice from the Wall Street Journal that
Warren Buffett (through Berkshire Hathaway) was backing a $1 Billion prize
for anyone who can fill out a perfect March Madness college basketball
bracket.
The sage of Omaha knows the odds against predicting the future are infinitely
small. What he may not realize is that the number of people willing to try
may be almost equally infinitely large.
The odds of predicting risks successfully are also infinitely small, but like
those who participate in an office pool for March Madness, the number who try
seems to be infinitely large.
[1] https://twitter.com/rsdsolutions
Thursday, January 23, 2014
Black Ice
*/By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc./*
*/Follow us on Twitter/* [1]
I was visiting my sister who lives in New Brunswick Canada last week. It
is always nice to get back to the place I was born for a few days and spend
time with family. As part of the visit, I drove with my sister from
Fredericton to Saint John and back – a drive of about 200 kms in total.
Going from Fredericton to Saint John the road was clear, although the day
itself was overcast with a light rain. Normally that is cause for concern
but with the temperature an unseasonably warm plus seven degrees there was
little thought given to the roads freezing over – particularly as they were
plowed bare to dry pavement after the previous week's blizzard.
On the way back to Fredericton in the afternoon however it was a different
story. The trip started off okay, and the roads were clear. However about
halfway through the trip it became clear that the light rain was surprisingly
freezing to the road. To someone who is not familiar with black ice however
the road looked wet but ice free. Not true!
I dramatically reduced my speed, as did most other experienced drivers.
However many kept zipping along at normal highway speed – and you know how
this turns out. Ultimately the highway was closed as the number of
accidents climbed. Fortunately (miraculously) no one was hurt.
Black ice of course looks like pavement – except it is ice. It is very
clear and very slippery ice. Risk is often like black ice. Risk often
looks like a normal situation when in reality the situation has changed to be
very treacherous. It takes experience and a willingness to listen to your
intuition to know when the pavement has turned to black ice. Unfortunately
your car's traction control indicators will not know the difference until
it is too late. (Likewise your corporate risk management system will also
not notice the difference until it is too late.)
Black ice is tricky. Risk is tricky.
[1] https://twitter.com/rsdsolutions
Partner, RSD Solutions Inc./*
*/Follow us on Twitter/* [1]
I was visiting my sister who lives in New Brunswick Canada last week. It
is always nice to get back to the place I was born for a few days and spend
time with family. As part of the visit, I drove with my sister from
Fredericton to Saint John and back – a drive of about 200 kms in total.
Going from Fredericton to Saint John the road was clear, although the day
itself was overcast with a light rain. Normally that is cause for concern
but with the temperature an unseasonably warm plus seven degrees there was
little thought given to the roads freezing over – particularly as they were
plowed bare to dry pavement after the previous week's blizzard.
On the way back to Fredericton in the afternoon however it was a different
story. The trip started off okay, and the roads were clear. However about
halfway through the trip it became clear that the light rain was surprisingly
freezing to the road. To someone who is not familiar with black ice however
the road looked wet but ice free. Not true!
I dramatically reduced my speed, as did most other experienced drivers.
However many kept zipping along at normal highway speed – and you know how
this turns out. Ultimately the highway was closed as the number of
accidents climbed. Fortunately (miraculously) no one was hurt.
Black ice of course looks like pavement – except it is ice. It is very
clear and very slippery ice. Risk is often like black ice. Risk often
looks like a normal situation when in reality the situation has changed to be
very treacherous. It takes experience and a willingness to listen to your
intuition to know when the pavement has turned to black ice. Unfortunately
your car's traction control indicators will not know the difference until
it is too late. (Likewise your corporate risk management system will also
not notice the difference until it is too late.)
Black ice is tricky. Risk is tricky.
[1] https://twitter.com/rsdsolutions
Tuesday, January 21, 2014
Resolutions
*/By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc./*
*/Follow us on Twitter/* [1]
It is the start of another year, and that means for many people another time
to make – and break – New Year's Resolutions. Almost always
resolutions are based on habits – and habits – despite what the self-help
section of the bookstore would have us believe are hard to break. Habits
are in part what make us human.
Corporations per se do not make New Year's resolutions, but they do set
goals and make yearly plans. More so many corporations take this time of
year to update their corporate mission statements. Increasingly a corporate
mission statement includes something about risk – particularly for
financial institutions.
Risk objectives however are like New Year's Resolutions. Risk arises
because business takes place in the realm of humans. Thus, risk in part is
based on habit, and corporate habits, just like personal habits are hard to
change.
Have you kept your New Year's Resolutions so far? Has your company kept
up with their risk practices for the year so far?
[1] https://twitter.com/rsdsolutions
Partner, RSD Solutions Inc./*
*/Follow us on Twitter/* [1]
It is the start of another year, and that means for many people another time
to make – and break – New Year's Resolutions. Almost always
resolutions are based on habits – and habits – despite what the self-help
section of the bookstore would have us believe are hard to break. Habits
are in part what make us human.
Corporations per se do not make New Year's resolutions, but they do set
goals and make yearly plans. More so many corporations take this time of
year to update their corporate mission statements. Increasingly a corporate
mission statement includes something about risk – particularly for
financial institutions.
Risk objectives however are like New Year's Resolutions. Risk arises
because business takes place in the realm of humans. Thus, risk in part is
based on habit, and corporate habits, just like personal habits are hard to
change.
Have you kept your New Year's Resolutions so far? Has your company kept
up with their risk practices for the year so far?
[1] https://twitter.com/rsdsolutions
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