tag:blogger.com,1999:blog-6452389006521661357.post4478828137814912471..comments2024-03-12T23:42:29.203+08:00Comments on Causal Capital: Breaking down the siloCausal Capitalhttp://www.blogger.com/profile/10919572283927557081noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-6452389006521661357.post-23311488266900683372012-06-29T21:46:49.550+08:002012-06-29T21:46:49.550+08:00This article is a very fine thing indeed - my cong...This article is a very fine thing indeed - my congratulations<br /><br />Bruce Lee :<br />Before I studied the art, a punch to me was just like a punch, a kick just like a kick. After I learned the art, a punch was no longer a punch, a kick no longer a kick. Now that I've understood the art, a punch is just like a punch, a kick just like a kick. The height of cultivation is really nothing special. It is merely simplicity;<br /><br />Now to me; Level 4 looks very much like Level 1, but with an improved understanding. It is only simple when it is understood.<br /><br />Tim JamesAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6452389006521661357.post-7767512021254969572012-05-03T21:04:34.369+08:002012-05-03T21:04:34.369+08:00This is an interesting blog and this post is too. ...This is an interesting blog and this post is too. I agree with you that silos cause a lot of problems and I like your idea of opening up a "convergence function" as you put it. This should solve many of the issues you list but I don't think businesses are going to go for it because it is expensive.<br /><br />Here is a suggestion. Why don't you set up a committee which has a representative from each risk function on the committee and that committee resolves the risk silo problems. They can debate what needs to be done to ensure full risk coverage is achieved.<br /><br />That's my opinion.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6452389006521661357.post-26181467487666515082012-05-01T11:26:56.714+08:002012-05-01T11:26:56.714+08:00Michael,
Thanks for your comment and I really lik...Michael,<br /><br />Thanks for your comment and I really like your website on options by the way. I will have to ponder through the various pages in more detail and also steer some of my customers to your book as I believe they will appreciate it as well.<br /><br />Staying with this post and your comment directly, well yes you are right: "How can we silo risk control in a supply chain management system, not so easy". Why would we silo such a thing begs a different question; management apprehension or insecurity sold as oversight.<br /><br />I am actually not for the risk management silo however I see so many organisations that end up managing risk in a silo. As we both can see "things stick outside the box" under such constructs.<br /><br />These blogs are written pretty quickly and play with ideas. The abstraction I am molding here is fixing the silo by creating cohesion among the silos. This is apposed to trying to destroy the silos as a solution to the problem. A risk unit with the charter of finding those areas of an organisation which fall outside the box and then creating solutions for them is the real crux of the argument I am presenting.<br /><br />Will adding another department fix the problem, properly not when the academic concept is applied from the pure sense to a real life situation.<br /><br />The credit crisis in my opinion was an event waiting to happen, the markets were pricing it so and for a long time. The contagion which took out banks however, was an easy roll down because there were so many holes within these financial institutions enterprise risk systems ~ Credit downgrades, translated to asset cutting, haircut increases and position exits, which then resulted into funding problems that fed back into the loop. <br /><br />No single department seemed to have a complete oversight of all of this and thus much of the outcome could be blamed on silo mentality.<br /><br />This is the problem I am trying to resolve.Causal Capitalhttps://www.blogger.com/profile/10919572283927557081noreply@blogger.comtag:blogger.com,1999:blog-6452389006521661357.post-80189488961291975452012-05-01T10:42:42.206+08:002012-05-01T10:42:42.206+08:00Martin, it seems trying to isolate risk in this ma...Martin, it seems trying to isolate risk in this manner ignores the important point you made: some things stick outside the box. In the study of organizational risk, it occurs to me that risk is most likely to turn into incident at the "weak links," those times when responsibility or process passes from one department to another (or from one subsidiary, sub-contractor, or person to another). So if this is true, then the isolated risk silo will not be effective in organization-wide risk management, true? Consider for example the big issue of supply chain risk management -- how can we silo that? It also occurs to me that by adding another unit only increases the outlets for risk to manifest. -- MichaelMichael C. Thomsetthttp://www.michaelthomsett.comnoreply@blogger.comtag:blogger.com,1999:blog-6452389006521661357.post-56714540223690356402012-04-30T10:06:04.493+08:002012-04-30T10:06:04.493+08:00Yes that is correct.
A team that specialises in n...Yes that is correct.<br /><br />A team that specialises in nothing more than integrating the efforts of the other numerous risk functions throughout the organisation.<br /><br />The main downside with this approach is that removing the risk silos by adding another unit is going to increase the total cost of risk management for the organisation. Most people on the other hand believe that removing risk silos reduces the cost but then that is level 1 kind of thinking.<br /><br />Now some people would also say but surely the group risk function should be doing this integration / convergence kind work anyway.<br /><br />If you are of that belief, as am I, then we should ask ourselves where in the group risk function does convergence occur?<br /><br />There are too many organisations which don’t consolidate the output of their various risk teams and that requires going down the organisation but from the bottom up.Causal Capitalhttps://www.blogger.com/profile/10919572283927557081noreply@blogger.comtag:blogger.com,1999:blog-6452389006521661357.post-89246976652584000542012-04-29T17:49:51.067+08:002012-04-29T17:49:51.067+08:00Martin,
So if I hear you correctly, you suggest t...Martin,<br /><br />So if I hear you correctly, you suggest that to break down a risk silo we need to launch another risk team?Anonymousnoreply@blogger.com