A few days ago I followed a linked post from Trevor Levine’s Riskczar blog and discovered Rick Nason’s RDS Solutions Blog. Rick is writing some interesting stuff, challenging traditional thinking and practice around Risk Management.
I commented on his earlier piece on the need for creativity, but felt that this post about the need to think holistically about complex issues is very relevant to resilience thinking. Legacy Risk Management tends to go hand-in-hand with Heritage BC.
Rick’s post draws on the thesis of a book to explain the difference between simple, complicated and complex problems. The quick analogy is;
- Simple – baking a cake
- Complicated – sending a rocket to the Moon
- Complex – raising a child
“raising the child is an integrated and holistic process” – holistic management process, where have I heard that before?
Rick asserts that Risk Mnagement is also a complex process and as such there are certain things we need to understand about it;
- Just applying ‘Best Practice’ (my capitals not his, implies a noun not an adjective) do not guarantee success
- If we succeed or fail, it is probably only evident after the fact, and then it is difficult to say which precisely what the key contibutors were
- It is a holistic process – in Rick’s example you cannot manage martket risk if you ignore liquidity or credit risk.
- So relevant to the debate on resilience also, we cannot design appropriate levels of redundancy into our functions if we do not develop appropriate adaptive capacities.
Of course we can improve the chances of success if we follow certain approaches – but there are no guarantees and it may be difficult to measure progress. Rick notes that raising childern requires experience, wisdom and flexability to adapt. Expereince here may translate to the ‘Technical Knowledge’ of our practices and procedures.
“To put it bluntly, technical knowledge alone is not sufficient for success in risk management. Realizing that risk management is a complex, and not a complicated profession is what is required. In a complex system you need the technical knowledge, wisdom, intuition, and as I argued in a previous blog creativity are all necessary to increase the probability of risk management success.”
Amen to that! The quest for resilience will fail if we do not bring Risk Management thinking in our ourganisations with us.
I think trying to build resilience into an enterprise is a complex endeavour also, dont you?
Rick’s thoughts and the quote above rings true to me (for risk and resilience), what are your reactions?
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