Adequate

 

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

We are in the age of ranking and rating things.  Ten best, and ten worst
lists litter the internet.  Try to find a restaurant site that doesn't
have the number of stars they received from the various reviewers on it. 
Ask someone if they liked a movie and they will answer with a number out of
ten.

 How would you rate your risk management system?  Does it matter?  Is an
adequate risk management system good enough?  Does anyone even think of
ranking the risk management system?  Should they be doing so, or does it not
matter? 

No Trouble

 

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

If a company never runs into trouble, does that mean that its risk management
department is doing a great job?  Or does it mean that the risk management
department is throttling the company?  Or does it mean that the company is
dead?  Or does it mean that the company is just too irrelevant for anyone to
notice?

Conferences

 

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

I just came back from speaking at the Travel Health Insurance Association
(THIA) conference in Hollywood.  I had a great time as I got to meet many of
the conference attendees.  Flying all the way from one coast to the other
coast I have to admit that I was wondering if conferences have met their past
due date.  After all it is quite expensive for all to attend a conference,
in terms of both expenses and time.  However once I was there I realized why
conferences are so important – particularly one as well designed as this
one.

The problem with many conferences is that they think it is (a) all about the
content, and (b) only content that will be applied on the first day back at
the office is what is important.  The THIA conference showed that the
opposite was true.  While the location in sunny California certainly helped,
the main reason the THIA conference was such a success is that the focus was
on selecting speakers who covered an eclectic set of ideas.  The conference
provided a forum for thinking.  Secondly the conference provided a forum for
socializing and informal networking in a very comfortable rather than forced
way that is so common at many conferences.

Ideas and the ability to build new and reinforce old connections is what
conference should be about.  If those two components are present, then the
ready to apply work tools will follow, and that is what makes a conference a
value-adding event. 

We’ve Always Done it This Way

 

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

If you try something new at your office then I bet you have heard the
expression, “but we’ve always done it this way”.  Sometimes that is a
good thing, in that through trial and error – generally long ago – the
company determined that the optimal way to complete a process was the way
that it has “always been done”.  Sometimes however the expression is a
real negative in that it implies that nobody has ever tried to do it a
different way, and thus no one knows whether there is a better way to do it
or not.

In risk management there is a lot of stuff that we do simply because
“we’ve always done it that way”.  What today’s risk manager needs to
determine is whether or not that is because it is a tried and true method, or
because of a lack of creativity and initiative to try something else. 

We’ve Always Done it This Way

 

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

If you try something new at your office then I bet you have heard the
expression, "but we've always done it this way".  Sometimes that is a
good thing, in that through trial and error – generally long ago – the
company determined that the optimal way to complete a process was the way
that it has "always been done".  Sometimes however the expression is a
real negative in that it implies that nobody has ever tried to do it a
different way, and thus no one knows whether there is a better way to do it
or not.

In risk management there is a lot of stuff that we do simply because
"we've always done it that way".  What today's risk manager needs to
determine is whether or not that is because it is a tried and true method, or
because of a lack of creativity and initiative to try something else. 

More is Not Always Better

 

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

When you have an ache, taking a pain reliever generally helps, but taking
more pain relievers is not always better.  Taking too many pain relievers
can lead to more problems than they solve.  Too many pain relievers can lead
to addiction.  Too many pain relievers can mask the real problem.  Too many
pain relievers may exasperate the problem.  Too many pain relievers may cut
off the search for an alternative solution. 

As with aches, there are many instances in risk management where more is not
always better.  If a little bit of a solution does not help, there is a
decent chance that more of the solution will also not help.

Context

 

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

A major part of getting buy-in for any type of change or managerial activity
is to create the context for why the activity must take place.  There are
many different contexts and motivations that can be applied.  They can range
from (a) must do because senior management said so, to (b) must do because
the regulators said so, or (c) should do as it will help you do your own task
better.  I suspect if I presented this as a survey poll, the results in
order would be (b), (a), and then (c).  I think enlightened mangers (and
employees who have to enact the activity) would readily agree that (c) should
be the answer.  Why the disconnect?  Also, do you think the disconnect is
larger in risk management than in other areas?  (I do.)  If so, why?