*/By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc/*
*/Follow us on Twitter/* [1]
Growing up, the sugar cookies that my mother made were one of my favorites.
However reading an abridged transcript of a convocation address in the Wall
Street Journal by Adm. William H. McRaven gave me another thing to think
about when someone mentions sugar cookies. Adm. McRaven was addressing the
graduates of the University of Texas at Austin and explaining "Life Lessons
From Navy SEAL Training",
http://online.wsj.com/news/articles/SB10001424052702303480304579578012692476736?mg=reno64-wsj
[2]
In Adm. McRaven's speech, he describes a sugar cookie as a punishment you
receive when failing uniform inspection. When you failed uniform
inspection, you were required to run fully clothed into the ocean, and then
while still soaking wet roll around on the beach until you were covered in
sand. The rest of the day would then be spent in your cold, damp and sandy
outfit. This effect was known as a Sugar Cookie.
Notice that it was "when" you failed inspection and not "if" you
failed inspection. Adm. McRaven's point was that at some point of time we
are all going to fail and fall short of our standards. You simply cannot
pass each and every time. In Adm. McRaven's words, "Sometimes, no
matter how well you prepare or how well you perform, you still end up as a
sugar cookie."
I think this is an important lesson for risk managers and for those who deal
with risk management. "Sometimes, no matter how well you prepare or how
well you perform, you still end up as a sugar cookie." And this is
despite the fact that my mother used to make them as a reward for my doing
good.
[1] https://twitter.com/rsdsolutions
[2]
http://online.wsj.com/news/articles/SB10001424052702303480304579578012692476736?mg=reno64-wsj
Tuesday, May 27, 2014
Thursday, May 22, 2014
Robots
*/By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc/*
*/Follow us on Twitter/* [1]
Robots have displaced a lot of the traditional American workforce. In many
cases, robots can weld things quicker, more precisely and more inexpensively
than humans. They can work with heavier parts and with smaller parts than a
human can. They can also sense when there is a need to make adjustments
better than a human can.
Many professions have a lot to fear about being replaced by robots (and their
thinking cousins computers). However robots (and computers) are not people,
and thus as long as there are people in organizations there will be a need
for human risk managers. Risk is about managing people, and only people can
effectively manage people.
[1] https://twitter.com/rsdsolutions
Partner, RSD Solutions Inc/*
*/Follow us on Twitter/* [1]
Robots have displaced a lot of the traditional American workforce. In many
cases, robots can weld things quicker, more precisely and more inexpensively
than humans. They can work with heavier parts and with smaller parts than a
human can. They can also sense when there is a need to make adjustments
better than a human can.
Many professions have a lot to fear about being replaced by robots (and their
thinking cousins computers). However robots (and computers) are not people,
and thus as long as there are people in organizations there will be a need
for human risk managers. Risk is about managing people, and only people can
effectively manage people.
[1] https://twitter.com/rsdsolutions
Wednesday, May 21, 2014
Assembly Line
*/By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc/*
*/Follow us on Twitter/* [1]
The assembly line as we all know is great for mass production. The assembly
line is by far the most efficient method for churning completely fungible
parts out one after the other.
Risk however is not fungible. Risk is constantly changing in different ways
and is unique to each organization and to each context. Mass production and
the assembly line are not ideal for risk management – despite what the
academics, certification programs and regulators seem to be thinking.
[1] https://twitter.com/rsdsolutions
Partner, RSD Solutions Inc/*
*/Follow us on Twitter/* [1]
The assembly line as we all know is great for mass production. The assembly
line is by far the most efficient method for churning completely fungible
parts out one after the other.
Risk however is not fungible. Risk is constantly changing in different ways
and is unique to each organization and to each context. Mass production and
the assembly line are not ideal for risk management – despite what the
academics, certification programs and regulators seem to be thinking.
[1] https://twitter.com/rsdsolutions
Tuesday, May 20, 2014
Stop Stealing Dreams Part 1
*/By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc/*
*/Follow us on Twitter/* [1]
Once again, Seth Godin has provided the inspiration for a series of blogs.
I am referring to one of his recent e-books called Stop Stealing Dreams:
What is School For? The free e-book is available on his website,
http://sethgodin.typepad.com/files/stop-stealing-dreams6print.pdf [2] .
This e-book is a fascinating examination of schooling, something that I am
very interested in as a University Professor. However it also has a lot of
relevant points that are easily translatable to risk management. After all,
I believe that being a good risk manager requires one to be a knowledgeable,
creative and a good learner – all characteristics that one develops in
school.
In this e-book, which is written more like a series of blogs, Godin attacks
the school system on many accounts; the main one being its cookie cutter
approach to learning.
In risk management I think there are parallels in that we are starting to
treat risk management as well with a cookie cutter approach. Global
regulations, risk frameworks, and a focus on objective risk measurements are
all characteristics of cookie cutter thinking. However, just as cookie
cutter thinking produces middling results in schooling, I put forward that it
also produces middling results in risk management. Godin, like Ken Robinson
(his most watched Ted talk is here
http://www.ted.com/talks/ken_robinson_says_schools_kill_creativity [3] )
believes that a standardized approach to learning is suboptimal. I believe
a standardized approach to risk management is also sub-optimal.
In the next few blogs, I will be taking points from Godin's school
manifesto and applying them to risk management. I may not want to, or be
able to steal dreams, but I can and I will borrow ideas.
[1] https://twitter.com/rsdsolutions
[2] http://sethgodin.typepad.com/files/stop-stealing-dreams6print.pdf
[3] http://www.ted.com/talks/ken_robinson_says_schools_kill_creativity
Partner, RSD Solutions Inc/*
*/Follow us on Twitter/* [1]
Once again, Seth Godin has provided the inspiration for a series of blogs.
I am referring to one of his recent e-books called Stop Stealing Dreams:
What is School For? The free e-book is available on his website,
http://sethgodin.typepad.com/files/stop-stealing-dreams6print.pdf [2] .
This e-book is a fascinating examination of schooling, something that I am
very interested in as a University Professor. However it also has a lot of
relevant points that are easily translatable to risk management. After all,
I believe that being a good risk manager requires one to be a knowledgeable,
creative and a good learner – all characteristics that one develops in
school.
In this e-book, which is written more like a series of blogs, Godin attacks
the school system on many accounts; the main one being its cookie cutter
approach to learning.
In risk management I think there are parallels in that we are starting to
treat risk management as well with a cookie cutter approach. Global
regulations, risk frameworks, and a focus on objective risk measurements are
all characteristics of cookie cutter thinking. However, just as cookie
cutter thinking produces middling results in schooling, I put forward that it
also produces middling results in risk management. Godin, like Ken Robinson
(his most watched Ted talk is here
http://www.ted.com/talks/ken_robinson_says_schools_kill_creativity [3] )
believes that a standardized approach to learning is suboptimal. I believe
a standardized approach to risk management is also sub-optimal.
In the next few blogs, I will be taking points from Godin's school
manifesto and applying them to risk management. I may not want to, or be
able to steal dreams, but I can and I will borrow ideas.
[1] https://twitter.com/rsdsolutions
[2] http://sethgodin.typepad.com/files/stop-stealing-dreams6print.pdf
[3] http://www.ted.com/talks/ken_robinson_says_schools_kill_creativity
Thursday, May 15, 2014
Farley Mowat
*/By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc/*
*/Follow us on Twitter/* [1]
Celebrated Canadian author and environmentalist Farley Mowat died last
week. Perhaps his best known work was "Never Cry Wolf" which was made
into a popular movie.
Farley Mowat is credited with saying that he "never let the facts get in
the way of the truth". In risk management, a lot of the time we focus too
much on the quantitative facts when in reality they are obscuring the
truth. We naively and too frequently incorrectly assume that because the
numbers are objective that they "tell the truth, the whole truth and
nothing but the truth". Nothing could be further from the truth.
Numbers don't always give context, nor do they always reflect the
context. Numbers don't prevision the future, they just tell the past.
Numbers cannot assess if they are measuring the right variable, at the right
time. Numbers just tell, they do not interpret.
Farley Mowat was a fantastic storyteller, and while he may not have stuck to
the facts, or the numbers, he always told the truth.
[1] https://twitter.com/rsdsolutions
Partner, RSD Solutions Inc/*
*/Follow us on Twitter/* [1]
Celebrated Canadian author and environmentalist Farley Mowat died last
week. Perhaps his best known work was "Never Cry Wolf" which was made
into a popular movie.
Farley Mowat is credited with saying that he "never let the facts get in
the way of the truth". In risk management, a lot of the time we focus too
much on the quantitative facts when in reality they are obscuring the
truth. We naively and too frequently incorrectly assume that because the
numbers are objective that they "tell the truth, the whole truth and
nothing but the truth". Nothing could be further from the truth.
Numbers don't always give context, nor do they always reflect the
context. Numbers don't prevision the future, they just tell the past.
Numbers cannot assess if they are measuring the right variable, at the right
time. Numbers just tell, they do not interpret.
Farley Mowat was a fantastic storyteller, and while he may not have stuck to
the facts, or the numbers, he always told the truth.
[1] https://twitter.com/rsdsolutions
Wednesday, May 14, 2014
Excitement
*/By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc/*
*/Follow us on Twitter/* [1]
How come risk management often comes off as so boring? How come the risk
manager of a firm is frequently a party kill? How come risk managers never
wear funky socks?
Risk management is, and should be the most exciting, challenging, dynamic,
creative and energetic profession within an organization. Risk management
is exciting and we should start acting that way.
[1] https://twitter.com/rsdsolutions
Partner, RSD Solutions Inc/*
*/Follow us on Twitter/* [1]
How come risk management often comes off as so boring? How come the risk
manager of a firm is frequently a party kill? How come risk managers never
wear funky socks?
Risk management is, and should be the most exciting, challenging, dynamic,
creative and energetic profession within an organization. Risk management
is exciting and we should start acting that way.
[1] https://twitter.com/rsdsolutions
Monday, May 12, 2014
Grocery Shopping
*/By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc/*
*/Follow us on Twitter/* [1]
I was conducting a university seminar for executives on managing complexity a
short while ago and the question was asked where do you get your best ideas,
or how do you get your best solutions to issues; while working at the office,
or while doing something totally unrelated to the idea or issue at hand?
The reason for the question was to illustrate that formal settings – such
as the office, the meeting room, or a laboratory are seldom the best places
in which to think creatively. It was also to illustrate that you cannot
force thinking creatively.
Archimedes of course came up with his breakthrough while supposedly getting
into a tub. It turned out that the executives in the seminar got almost all
of their best ideas while being anyplace other than at work. One
participant stated that whenever he has to solve a tricky problem he goes
grocery shopping. Such responses illustrate the power and the superiority
of the sub-conscious mind.
Collectively I believe that we also need more sub-conscious mind thinking
about risk management. Trying to force risk management paradigms onto
companies or even whole industries is like trying to sit in a corner and
think real hard. It may produce answers, but the answers may not be as good
or as creative as the ones you come up with while grocery shopping (and thus
not trying to think so hard).
[1] https://twitter.com/rsdsolutions
Partner, RSD Solutions Inc/*
*/Follow us on Twitter/* [1]
I was conducting a university seminar for executives on managing complexity a
short while ago and the question was asked where do you get your best ideas,
or how do you get your best solutions to issues; while working at the office,
or while doing something totally unrelated to the idea or issue at hand?
The reason for the question was to illustrate that formal settings – such
as the office, the meeting room, or a laboratory are seldom the best places
in which to think creatively. It was also to illustrate that you cannot
force thinking creatively.
Archimedes of course came up with his breakthrough while supposedly getting
into a tub. It turned out that the executives in the seminar got almost all
of their best ideas while being anyplace other than at work. One
participant stated that whenever he has to solve a tricky problem he goes
grocery shopping. Such responses illustrate the power and the superiority
of the sub-conscious mind.
Collectively I believe that we also need more sub-conscious mind thinking
about risk management. Trying to force risk management paradigms onto
companies or even whole industries is like trying to sit in a corner and
think real hard. It may produce answers, but the answers may not be as good
or as creative as the ones you come up with while grocery shopping (and thus
not trying to think so hard).
[1] https://twitter.com/rsdsolutions
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