Podcast

Episode: 20 |
Mike Bendit:
Building a Referral Network:
Episode
20

HOW TO THRIVE AS AN
INDEPENDENT PROFESSIONAL

michael-bendit-booz-alum-new-york-ny

Mike Bendit

Building a Referral Network

Show Notes

Our guest today is Michael Bendit, an independent professional based in NYC who started his consulting career as a principal at Booz & Co.

Michael has two sides to his practice

  • He runs a consulting practice, with a particular focus on strategy and pricing
  • He also represents multiple software development shops, primarily focused on digital marketing agencies

 

Michael has created a referral network in NYC that has been meeting every two weeks for several years. His group includes a range of independent professionals that all serve digital marketing agencies, with different specialties, and every two weeks they get together to share leads and look for ways to collaborate. Getting up a group like this up and running takes a lot of effort, but has been successful at generating a flow of work over time and is something that independent professionals might want to consider replicating.

You can read more about Michael’s software firm at http://softdevresources.com/

One weekly email with bonus materials and summaries of each new episode:

Will Bachman: Hey there, podcast listeners. Welcome to Unleashed, the show that explores how to thrive as an independent professional. Unleashed is sponsored by Umbrex, the world’s first global community of top-tier independent management consultants. I’m your host, Will Bachman. 

Martin Pergler: So many times risk management is let’s demonstrate and prove to ourselves that all these things that could go wrong are adequately under control.

Will Bachman: Our guest today is Martin Pergler. He is an expert at risk management. He was a risk management expert at McKinsey for over 15 years. He is now running his own firm, and you can read more about him on his website: balrisk.com. That’s like balanced risk, but B-A-L-R-I-S-K dot com. Today we talk about risk as you’d expect, and it’s not just about, you know, black swans or a bunch of equations. It’s really about being thoughtful and pragmatic. I learned a ton in the conversation. I hope you enjoy it.

So, Martin, hey I’m delighted to have you on the podcast here. I am really curious about the work you do. It’s outside anything that I’ve done. Let’s start by you introducing yourself. Tell us a little bit about kinda your background and the type of work that you do.

Martin Pergler: Sure. First of all, thanks Will for having me on the podcast. It’s a pleasure to be here. A pleasure to chat with you. I hope this will be useful to the people who listen to the podcast as we go on through. Look, I worked for 14 years at McKinsey in a variety of various countries. U.S., Canada, Prague, Singapore. I actually served, I calculated it in my [inaudible 00:01:54] about 250 clients in over 30 countries. I don’t exactly have industry employment experience like some consultants have, but to look after 14 years at McKinsey, over 25 of my consulting clients were sort of a multi-year journey, so in many cases, I feel I was there in on the ground floor helping people as much as if I were an employee there. 

I started my own independent practice when I left McKinsey at the end of 2014, but as we’ll get to later, I actually continued collaborating with McKinsey quite a bit as well as with others. The area I focus in is risk management and decisions under uncertainty outside the financial sector. So, Will, risk management means many different things, and I think for many people who have to deal with risk managers running around, it feels like a bureaucratic exercise to classify 30 or 40 or hundreds or even thousands of things that might go wrong. In a way that’s exactly what I try to help avoid. I try to help companies get out of that trap.

In my mind risk management is about being informed and thoughtful about the bets you’re making in your business and making those choices deliberately and building your flexibility and resilience to respond to whatever is going on.  Sometimes that means that my actual client, the person I’m helping, is somebody who has risk management written on their business card. More often than not, I’m actually helping a certain business unit to a certain executive view of their uncertainty. Or I’m helping CFOs or other C-suite members sort of productively consider risk and their important strategic or operational decisions.

Sometimes they even do board of directors work. Boards do have to share responsibility for risk management. They oversee important risks and trade offs all the time. Very often they’re not very sure themselves what exactly that should mean. I mentioned at the beginning I don’t do as much in the financial sector, by which I mean banking and insurance. Those sectors, of course, have very well established risk best practices, after all risk intermediation is what a banker and insurance company does. It’s a very crowded space. I help primarily in the sectors which are sort of less mature in risk management where there’s more of a niche to fill. I do a lot with energy, oil and gas, basic materials, industrials, also institutional investors, private equity funds conglomerates, and so on. 

Will Bachman: Cool. Could you pick one or two examples and walk us through so we … to give us a really crisp detailed idea of what this means in practice?

Martin Pergler: Sure. So, I’ll cover two examples. I think the first one will sort of be the more familiar one to people sort of what they have in mind when they think of somebody helping with risk management. This was an oil and gas company where I recently had been helping them with the qualm that they did a modeling project to build their risk model for use in the finance function. The second one I’ll cover after that is a bit different, and that’s where I’m involved in doing executive education for government about how to put in place more effective risk management in the public service.

I should say, all my projects, I tend to play a part-time, expert-type role, sort of hours here and there on the phone, days on site. I’m generally not the guys who is full time, running a team for several weeks even though I may be helping out a team that’s focusing on that.

So with that in mind, let me talk a little bit about those two examples. The oil and gas company one. That’s actually a company I had to help them sometime ago. What they were doing was their cash planning and treasury to focus on what our risks … what could make us be short of money. Help build them model that looked at certain types of risks in particular oil place volatility. They contracted me when they needed to update this. With the wrinkle that they said look, last time, you … and I was with McKinsey at that time … you guys built the model for us and trained us and handed it over. What we’d like to do this time is we build it or we improve it ourselves, and you guide us … you point us in the right direction. You challenge us and help us figure out what to do differently. 

I think on this one in particular, there was a timing element in this as well. There had been huge gyrations in the energy markets, and of course, you have very different uncertainties and concerns if oil is around $50 per barrel, then it [inaudible 00:06:51] at 90. I think in this one in particular, clearly the desired outcome was a good model that supports good decisions. What if ability focused on the specific things they were looking at as strategic options. The other part of it was this long tailed capability building element. They said we want to run this in house, we don’t want there to be a single thing in here that we weren’t intimately involved in building it. So, as one guy put it frankly, we sort of become big friends. If you fell out the window on the 37th floor, on the end of the study, nothing would go wrong with our model. I told him I hope he wasn’t going to push me out of the 37th floor before we were done. That was a good aspiration that even if I died in some horrific way like that, they could still continue running it. 

Will Bachman: Ha, ha.

Martin Pergler: I think what was very different about his was the guiding element. I was the guide at their side, and I helped them even pick who were the right people, the right skills set from their internal team to put on the project team for this. I was going to talk with them weekly or more often, especially with the project manager, how things were going. About once a month I’d fly out there for challenge sessions and to review what they were doing. We’d spend a lot of time untangling some of the more complicated stuff around the whiteboard as well as thinking is this really meeting our needs.

The real benefit I think I got here was prioritization and focus. It would be so easy in these situations for the geeks to take over and build the most brilliant model. That would be a black box nobody would use. What I was helping them do was be nimble in the right places and back off and move on to something else if it was getting needlessly complicated.

Will Bachman: Like what would an example-

Martin Pergler: I think-

Will Bachman: But … this is by the way the first case I’ve heard of a specific project objective being that we could defenestrate the consultant at the end, and we’d still be successful. What would some-

Martin Pergler: I’m happy to say, by the way, that we did not test whether that objective would match at the end of the study. We took it on trust.

Will Bachman: Glad to hear it.  While we’re … give us some examples of ways with risk management project that, to use your word, the “geeks” can take over or what were some, like some blind alleys that you can get drawn down that folks … that we should avoid … that you can avoid with experience like yours.

Martin Pergler: So, a couple of things. One is on the quantification, which is what this project was about. Quantification needs to fit the timelines that business decisions apply to and needs to actually fit the specific decisions that are needed. So I worked with a number of companies that go to excruciating detail to build the most perfect model for commodity or currency prices. Then you sort of figure out, look, what really matters to these guys is is this decision going to make me money with a five or ten year horizon; therefore, it’s what do you fundamentally believe will be the macro environment that will be there five to ten years from now rather than exactly how much volatility you can expect month to month. 

Flip that around, and you may have a different company for instance, and airline in not so great financial condition where it’s very much on how do we maintain our liquidity in the next three to six months. It’s all about the volatility. And guess what five to ten years from now whatever energy prices will have done, their and their competitors fares will have followed that up or down. So, that big macro picture is what’s relevant. So this type of prioritization. 

The other is the losing the sight of the forest for the trees type of issue. I think I’d mentioned at the beginning effective risk management is about focusing on the big bets. There’s a lot of companies out there that build very detailed registers of the hundreds or thousands of things that might go wrong. Then you have overburdened boards who are sort of worrying about could something overflow in this mine … is there a banana peel in the corner stairwell in building 37 somebody could slip on … and they miss the focus that okay, this whole company is a big bet on the fact that … I don’t know regulation in this whole sector will stay about the same … and that’s what the board should be focusing on.

I tend to typically be there as the guy who is saying, “great job guys, but is this really the question we need to be answering right now or is the priority somewhere else?”. That actually links to the second example where I’m actually doing something very different. I’m working with the government. I was brought in by a business school that has an executive education arm. They were approached by the government saying we need top executive training. We actually need to counsel administers to be trained on the questions they should be asking about risk management. We need this to be rounding off like here’s the details of what risk management looks like. Here’s the dialogue senior people should be having to get answers to the questions you should be asking. So, I’m there working with this business school developing case-based learning to take politicians and senior government executives through … to help them get comfortable having a productive dialogue about risk.

Will Bachman: Tell us a little bit about that. So, what are some key questions that your execs should ask about risk or that consultants should be asking about risk? Not everyone is going to be a deep risk management expert like yourself, but you know, sort of to get started and be smart about it, are there some key questions people should have or some mindsets? What are some of the first message that you’d want people to remember about risk management?

Martin Pergler: So, one of the first questions I like leaping with is, “what are the big bets behind our business strategy or behind our whole business model as a company?”. Too many times risk management is: let’s demonstrate and prove to ourselves that all these things that can go wrong are adequately under control. I like turning it around and saying, what’s the reason we’re here. In finance, people say, risk and return go together. We could argue the terminology, but basically, if you’re doing good things, you’re going to be taking risks. Let’s be honest with ourselves what those risks are. Let’s then figure out which of these risks you should be taking, which ones of them do you want to be taking, because you’re good at them, or you’re being paid to take them. If you’re an energy company, you probably need to be taking an energy price risk, and you need to be taking risks on execution of the capital projects. That’s part of your DNA. That’s who you are. 

So, let’s really have that discussion. Are you taking enough of those risks, do you understand what you’re doing. Then there’s an awful lot about the undesirable risks – the ones you don’t want to be taking – and there you’ll sort of have to differentiate them and say what are some of the big things that we really don’t like and need to make sure we’re resilient. Especially if there’s big changes, if there’s a new political regime, what may change, offer opportunity for us. What’s a real big risk that might make it super unattractive for us to continue working the way we are. 

Everything left is about how do we have the right process and right control functions towards a [inaudible 00:15:18], but it shouldn’t be a senior management type responsibility. I go in there, and I say, “look the senior level discussion about risk should be about what risks do we want to take, and then it should be about what are we uncomfortable about in what we don’t know enough about. It shouldn’t be about checking the boxes, about what are all the things somebody thought up could go wrong, and okay have those looked at. Ideally that checklist, should all have check marks in it and somebody looking at all of that. It’s the stuff that isn’t on the list you should be having a conversation about.

Will Bachman: Are there kind of a standard set of categories that you have in your back pocket to kind of help people just generate that set, do you think about regulatory and technical and execution? What’s the set of maybe categories that you use? Or do you?

Martin Pergler: I think there are top=level categories: financial, strategic, regulatory risk, operational risk, execution risk. There are a couple taxonomies like this. I tend to turn it around and say with a very new client or industry, I’ll say, “let’s put those categories out to the side, and let’s think about what has gone wrong or what has gone right for you and competitors in this industry in the past five, ten, fifteen years? Let’s list those things out, and let’s group them later. Second, I think the lens of forget about what the risks are, let’s talk about your processes. What processes in your company are the ones where you really take on risk deliberately?” So if you’re a mining company, you take on all sorts of safety risks just in your operations. You take on big strategic and macro risks by deciding here’s where we’re going to invest and build a huge big mine that only pay off in 40 years. You take on risks when you’re doing contracting and hedging type decisions.

So, let’s look at each of those managerial processes or decisions, and I find that that’s typically more productive than, do we have have a very standardized taxonomy to make sure we aren’t missing some risk? We’re always going to miss some risk, and it’s how you respond to it that you deal with. I had a company once where together with a new sort of missed cyber security IT risk element to it. We could beat ourselves up for having missed that. Fortunately we caught it in time, and the events that happened to them was minor. So we rapidly pivoted and pulled back in. I think it’s that pivoting which is more important than did you see absolutely that you should have seen at the right time. 

Will Bachman: Let’s say the company is going through this process of identifying the risks. What’s the real objective of risk management process? I mean not just to identify them but to do something about it. What do you think is the best practice sort of outcome of the risk management efforts?

Martin Pergler: Actually there are two. On the one level it is identify your big risks and make concrete decisions what you’re going to do about them, and then insure you have follow through. Sometimes people call that mitigation, but mitigation may or may not be the right term. Sometimes you need to embrace the risk more. You just want to follow it. You make concrete decisions. I’m worried about x, y, and z … this is what I’m going to do. This is who’s gonna do it. This is … I’m going to follow up and make sure it’s getting done or if something needs revisited.

That’s sort of level one. I think there’s another level, which is where you’re making explicit risk return trade-offs, and you’re making it consciously where you say, “I’d really like to do these five expensive capital projects, but I can can only afford to do three of them right now, so I’m going to choose this one because it is a no brainer which is pretty sure to deliver. I’m going to do this one where the risks are A and B, and I think I can handle them. I’m going to postpone this one over here, because there’s a pilot I can run first and then I’ll be more ready to do it two years from now.”  I know I need to give up some value, because I’d love to have that mine or whatever it is going earlier, but the risk return trade-off isn’t worth it here on this right now, but it is worth it to me somewhere else.

It’s sort of being thoughtful and aware when you’re making trade-offs. I think that’s sort of where the value ends up being. The first one, mitigating stuff, is important, and without it, you run into trouble. The second one is how you generate value. 

Will Bachman: Where in risk management … one definition of it sounds like it could be very quantitative doing sort of black shoals, value at risk type calculations, very kind of … based on forecasting and volatility and all that, but it sounds like another aspect of this is much more qualitative. More like, what could be the potential regulatory picture? How could that evolve? Talk to me a little bit about is risk management really both? Give me your perspective on that about to what degree is it really about the quantitative stuff or qualitative? Or is it really embracing both?

Martin Pergler: I think it’s very much both, Will. I think there’s certainly quantitative elements of attaching numbers to sort of vague uncertainties and in process being able to make good decisions. Sometimes that goes to the extreme of model or evaluation technique like black shoals or some mean reverting time series. I think when you prove them to yourself that somehow that’s an important ingredient to the trade-off discussion. I think the first step is typically much more qualitative. It’s understanding what’s going on in my business, feeling comfortable admitting to myself what I don’t know, what I’m uncertain about, and deciding where do I continue blind and where to I try and build more understanding because it’s worthwhile. 

I think there’s a huge cultural element to it as well. We talk about risk culture being mindsets and behaviors about individuals and groups and how they deal with risks. How do you set up the dialogue across the organization so people are comfortable saying, “I don’t know.” Or “I’m worried about x.”, and it doesn’t reflect badly on them or their superiors? How do you set up an environment where people sort of feel confident saying, “we need to learn more about this before we can proceed”, and yet how do you also set up the environment that people can say, “we need to take more risks over here in order to meet our objectives” and are able to reach out and say “we don’t know the full story over here, but we think we should go ahead and go for it, the downside is limited, we count on you guys to help us out if things go wrong.” That’s what entrepreneurialism and growth is about a lot of the time.

So, a lot of the time what I do is less about precisely quantifying risk. It’s about bounding risk and about adding structure to how an individual or a company can think about risk. So that they sort of feel comfortable proceeding or feel comfortable saying, “here are the two or three things I need to do, and then I’ll feel comfortable proceeding.”

Will Bachman: Your point about getting people feeling comfortable and vulnerable enough to admit that they’re concerned about a particular risk, what are some things that you do to help get senor folks more comfortable admitting that they’re concerned about particular risks?

Martin Pergler: I think one thing which tends to work very well is to put people into small sub-groups for short period of time and have them sort of work on story telling, narratives, scenarios briefly, and then come back and start discussing the groups and see how different they are. Sometimes what I do with, pardon the language, very uptight set of executives, is say, “okay, yeah, you guys sound very confident about what’s going on. Let me split you into two or three groups over here, and describe what you think the future will look like. Describe why you think the company will achieve your objectives under that future.”  Typically, we find they are pretty consistent on 50-60% of what they write down. The 30-40% feels quite different, and that leads to discussion of look if you guys are all playing from the same playbook, and yet you already diverge quite a bit in your expectations what’s going on, you’re all smart, competent people, why is that? By the way are you there for appropriately comfortable on the stuff that you actually wrote down looks exactly the same. 

Then we set up discussions. We play a bit of … it’s a bit of game playing.  Say, you be the challenger, and you be the defender over here. Or we’ll create scenarios or a risk heat map, and actually get people standing around the matrix on a sheet of paper, moving around risks that are written on little post-its and arguing and discussing does it go in this corner or that corner? It’s almost as if the flood gates open. I think people resist talking about this because they’re not sure how to launch the conversation. They’re not sure how they’ll look if they’re the first one. If you help them over the threshold, they’re actually delighted to talk about, in a safe environment, what they feel might not be exactly how they expect as long as there’s a feeling of we’ll be able to get something from here and I’m not criticizing somebody by raising that out in the open.

Will Bachman: That’s so interesting that you raised the point about integrating story telling and getting people to feel comfortable with expressing things and kind of through that mechanism. I’ve heard that from other folks. It’s such a powerful technique. What would some suggestions you have for someone who’s not a life-long kind of risk management expert, but wants to be a competent consultant and help clients think through risk? A lot of times when you’re thinking about growth strategy or implementing any type of project, there’s always sort of that checkbox of, okay, what’s the growth opportunity here, what’s the constraints, what’s the capital investment required, what are the risks … that’s always sort of part of some kind of business plan. What are some best practices around that aspect? What are the risks of some project? What are your suggestions around that piece of business plans or growth plans?

Martin Pergler: If I could give one very specific suggestion on this risk list, I think what you’re referring to, Will, is somebody comes up with some plan, and somebody’s told them you have to have a page on risks, so there’s a page in the PowerPoint in the appendix or very last page before the appendix, which is five bullet points on here are the five risks, and we think we have them under control.

Will Bachman: Yeah, it always seems like an afterthought. 

Martin Pergler: One of the things I found very helpful is add just a tiny bit of structure. I have categories when I look with clients or executives on this, and forget about quantifying risks in detail, but force yourself to say in each of these five risks I’ve identified, is my company going to fail i.e., or my business, unit, or project, whatever it is, is it basically a deft blow. Is it something which is going to mean significant changes are needed or something which is really going to make me struggle. Is it something which I will manage and then will cause a bit of damage? Or is it actually something which is or I can turn into an opportunity? There are different ways you can do this, but basically have four or five of these severity categories. Start just very simply saying each of these five risks are identified, which category does that belong into. 

Then, the next thing the consultant can pull out of their back pocket once that’s established is, “okay, guys, what would it take for each of these risks to move it one category better?” So if it feels like something which would completely and utterly make us fail, what would it take for it to be something which would make us struggle badly, but would be survivable? If the answer ends up being, “okay, well we might need to do this little pilot to try out first, and that delay is six months, but look, it could really help in this way.” Guess what, you’ve just framed a very productive trade-off discussion: is the six month delay worth the extra safety?

If you can say, “well, this would be a bit of a change for us, but we’d handle it just fine,” what could we do about this to really turn it into an opportunity rather than being proud that we’re resilient. Is it something where our competitors would be less resilient than we are, and therefore we should be poised to respond extremely quickly. Airlines are super at this [inaudible 00:30:05] in terms of say yield management and pricing in response to energy market changes for instance. 

These types of examples, and you rapidly turned that single page which is a check the box, yeah we thought about risks and we need to minimize them because otherwise the decision makers won’t say yes, and turned that into a discussion of here are the three or four things we are really worried about, and here’s how …. talk management or other decision makers … here’s how you can help us navigate those better or even turn those into opportunities. 

Will Bachman: Yeah, I love the way you’ve set that up, particularly with that second question of saying, first here are some qualitative categories, and then the second question of what would we do to move it from one category to the less severe category. That’s something that I’m gonna use myself. I love that.

Martin Pergler: As I say, delay the quants, I can say this as the PhD math [inaudible 00:31:04] models, quants are typically the enemy, rather than the frame for progress in senior discussions. Quants are useful if they set up a real trade-off. Find a way to set the trade-off first. We need to spend 50 million dollars to reduce this risk, which would cost us 500 million, that’s great. If it [inaudible 00:31:27] here’s how we turn this big issue into an opportunity. You probably don’t need quants to being with to frame that well. You only need that later when there’s a business piece to be made.

Will Bachman: Yes, so do the qualitative stuff first, before you try to get down to the decimal point.  

Martin Pergler: Very much so, yeah.

Will Bachman: Martin, one question I have for you, moving beyond kind of your projects that you’ve done, as an independent consultant a lot of folks wonder, “how do I manage my own professional development?” “How do I build my skills over time to increase my value?”  I’m curious to hear any ways that you’ve been intentional about that … about building your own skill set over the past one or two years, and if you have things on your radar screen that you’re planning on doing over the next time period. What skills are you looking to develop? How would you go about it? Or what skills have you been working on? And how have you been going about it?

Martin Pergler: Sure, Will, great question. I think a couple of things I find I have to work on and continue to work on. One is I think we talk about it a lot even before we become independent consultants, especially if we’re coming from one of the major companies, there’s this whole idea of going from someone who’s an executor to being a trusted counselor. I think it’s something you really only start living when you are an independent consultant, because you are there and you don’t have somebody to rely on that, so people are looking to you what do we do next. And they’re looking to you to say, “okay, you’ve seen this before, what does this mean?” “What are the things we need to find out?”  I’d say building that skill set to where you sort of both know when do we need to go and do [inaudible 00:33:31] analysis, but sometimes you just have to go by your experience, by your gut, and take other people along with you. I think that’s something which I’ve had to develop and know I’ll have to continue to develop as I go on.

Part of that for me has been having the confidence to phone up a client again and say, “hey, I’ve been thinking about what we discussed yesterday when you popped this question at me, and you know, I no longer share that idea. In the full picture here’s something that we missed.”  They will actually will respect that. 

A bit more pragmatically in my area … I think I mentioned I’m working with business schools executive education … I am coming up to speed and learning much more systematically about pedagogy and pedagogical methods. I think anybody who has been an academic, as I sort of was, then a consultant, who does capability building among other things, needs to in a way be a good and [inaudible 00:34:38] teacher. But as you progress from that, or as you broaden you skill set, what it really means to be an educator and to be sort of making people excited and enthusiastic and equipping them to handle situations on their own, which is what education is about. You need to broaden the tool kit and take a whole new … whole different set of approaches. 

In a way it’s complimentary. As consultants we sort of want to be at the client’s side helping them out and having an ongoing dialogue with them over time. As an educator, you are there at the front helping them learn by doing, but you also have a limited window. At a certain point the education opportunity is over, and they’re going to go forth and do their own stuff. You don’t actually have any natural way to course correct, help them, give further details, and so on. It’s a very different way of thinking.

I guess extremely pragmatically I should also add that I have to develop the skills of, I’ll joke about it now, it’s billing, invoicing, and collections skills. As a consultant in a firm I was sort of insulated from all of these things. Salary arrived nicely every month, and expenses get paid more or less reasonably, and we [inaudible 00:36:15] tremendously for somebody to cut back on this or they’re a week late paying me and I have to pay my Amex first. The reality as an independent is that I’ve had to spend an awful lot of time learning and sort of figuring out who do I bug when they’re one week behind on paying their invoice versus two months. Where do we have a real problem? How do we solve that? All this sort of stuff of running your own business that other people laugh at, but I think we were insulated to before we became independent consultants.

Will Bachman: Well, certainly some of the most practical aspects are critical to success … and making sure that the money flows. In terms of the pedagogy, any tips that you’ve picked up on how to use adult learning principles to get people to just really experience it, not just sort of heart it in a lecture? How have you tried to integrate adult learning principles into the education that you’ve been leading?

Martin Pergler: There’s also some things on this. Here are two of the quick wins that I’ve seen. Number one is people sometimes joke about it, that you have to tell people everything three times, tell them what you’re going to say, then actually do the telling, then repeat what you just told them. I think that’s even more the case with adult learning. It’s okay to set the context, frame it, then make them experience it, then make sure you actually take the time to review and anchor it in their minds in a productive fashion. 

I think we can take that whether we’re explicitly being capability builders or just in our basic consulting work as well. We often focus so much on doing and capability building is an afterthought. In particular that third repeat, the review of what have we done, what have we learned, I’ve now taken that to some of my normal flavor consulting and had great feedback on that, because people say, “you know, that’s really valuable. Now I understand better what we just went through and what I need to do next time.” 

I think the other thing which I’ve learned is just simplify as much as possible in the pedagogical approaches, especially the interactive elements. Coming from McKinsey … McKinsey Consultants I think are selected for their ability to navigate through extraneous detail. Then in some of the teaching I did at McKinsey and others did it, that’s part of a trainable skill through zillions of details that people haven’t picked out what’s important, because that’s exactly what consulting looks like. That’s not what effective executive education or capability building looks like, but [inaudible 00:39:18] an athletic skill of executives are necessarily wanting to develop right then and there or are willing to spend their time developing that very instant. Take the time to simplify, to really boil down the essence. To figure out what is it that you’re trying to say, then cut out three times as much as detail as you would otherwise do so that the structure is crystal clear.

Will Bachman: Yeah, I think Martin, on the topic of education and helping teach people about this topic. You’re also writing a book, right? Could you tell us a little bit about that?

Martin Pergler: Sure. Sure. The book that’s actually the main investment I’m doing in my professional development right now. I’m writing a book with the tentative and rather boring title of “Veer on Risk Manager”. It’s sort of along the lines of what we were talking about, Will. I say a lot of risk management materials are written or presented as if they’re for specialists. Their goal is to build a process across the whole company. What I want to focus on is what is it that executives should be doing, so what they should think about alone or with their team of direct reports for 45 minutes every two weeks at a start and every month or two on an ongoing basis to stay on proper risks and areas of responsibility. 

How can they productively use some of the risk management tool kit which often gets presented to them as a CYA-type of compliance. Bureaucratic monolith. What can they do for it to actually be helpful or useful? Say those categories of risk impact that I talked about before, what’s gonna make us fail, where will be struggle, what’s an opportunity, and so on. That’s the more pragmatic take on okay, we need to rank our risk as impact level A, B, C, D, and E. 

I’m working on that book right now, hoping to finish it in the next couple of months. That’s been a great learning experience for me as well, because I came to this, in retrospect, a bit the academic mindset after 15 years doing corporate risk management, what are the pearls of wisdom I want to share with everybody and how do I structure them. I sort of realized now with the very fortunate intervention of a few friends, saying, “no, no, no, that’s not what a good business book is.” It’s find a very concrete problem, then come up with a very concrete solution, and then put in narratives, interesting examples, and things like that, but the whole structure and goal has to be much, much more simple than the be all end all monograph on topic X.  

I’m working on that right now, and that’s also influencing sort of the speaking I do at conferences and the types of projects I take on. I’m sort of being a little selective as well, so I have a chance to try out a few of these concepts with executives and sort of [inaudible 00:42:39].

Will Bachman: Awesome. Well, hey, I’ll look forward to taking a look at that when the book comes out. Have any one or two books that have really influenced you maybe books that you’ve frequently gifted or books that have shaped your gifting?

Martin Pergler: Let me mention three authors rather than single books.

Will Bachman: Sure.

Martin Pergler: I think you cannot be active in the field of risk management without being intrigued and challenged by the books of Nassim Nicholas Taleb of “The Black Swan” and so on.  He’s a bit of [inaudible 00:43:15] challenger of everything that’s going on, and that’s extremely important. He asks provocative questions and says, “why are we doing this? This is all CYA.” This is a system doing its own thing rather than being truly helpful or useful about something.  

Another stream of literature which I’ve gifted, I’ve read, and I’ve returned to is al the behavioral economics material Daniel Kahneman, “Thinking Slow, Thinking Fast”, I think it’s the other way around, “Thinking Fast, Thinking Slow” [inaudible 00:43:49], and so on. We like pretending we are rational beings about dealing with risk and uncertainly. We are not. What does that mean? Are we trying to become more rational or are we trying to live with our irrationality? 

The flip side of that, there’s really interesting stuff by [Garret Gugerrenser 00:44:06], who is a German practitioner and academic I believe, who sort of said, “okay, given that we’re rational being and can process our information, and we make decisions using heuristics.” What makes for an effective heuristic for decision making? It’s sort of a good counterpoint for three different lenses on all of these issues of uncertainty. They’re not contradictory, not are they truly complimentary, but each of them is sort of thought provoking. Each of them is easy to pick up briefly when one is stuck waiting for a plane for 20 minutes and then look down again and you’ve learned something. You don’t need to spend hours and hours studying in order to come up with some sort of insight.

Will Bachman: Great set of authors. I’m very familiar with the first two Nassib and Kahneman’s book. I’m gonna check out the third one that you mentioned, and we’ll list all those in the show notes. Love to hear about your morning routine. I’m always curious about how people start their day.

Martin Pergler: I think my morning routine is not necessarily fully predictable. I am, when I’m at home the first one up in our household, and quite often I’m working with clients around the globe, so there’s a bit of triage at the beginning saying if there’s something I need to answer before Australia goes to bed or something like that. 

I do try maybe more so than morning routine to have a reasonable daily routine. I try each day to do a bit of weekly help with clients or help the team helping the client work. I also try to make sure I spend some time just on professional development and becoming better at what I am. I do try to spend maybe not every day, but I set aside a couple of hours every week to actually do writing on the book in a sort of shut the door, turn the phone to mute and don’t pick up kind of way. I do try to make time for one thing in particular, if I’m not traveling, and that is, I’m a musician. I play clarinet, and I sing. One of the things I missed when I was at McKinsey, I sort of had to put that to the side with the type of lifestyle that’s there. At least when I’m home these days I try every day to make a bit of time for that. 

That’s what keeps me sane.  I know some people feel the same way about exercise, maybe I would be better if I were focusing more on exercise than music, but what keeps me emotionally sane is doing a bit of music and keeping the arts part of me alive as well.

Will Bachman: That’s fantastic. It’s really interesting to know how many high performing professionals have a musical practice in their life and do something like that. That’s pretty cool. I guess one final question. If you have a chance to put some words on a billboard for every executive to see, what would the billboard say?

Martin Pergler: Don’t be afraid of risk. 

Will Bachman: Don’t be afraid of risk. Awesome.

Martin Pergler: I think that would provoke them. Of course one gut reaction is, “of course, we have to be”, but I that challenge of why exactly do we need to be afraid of risk and which risks do we need to be afraid of, I think that’s actually an extremely good dialogue to have with one’s self. That’s why I’d put it there as a provocative thing.

Will Bachman: Don’t be afraid of risk. Marin, how can folks find you on the internet or on social media? What’s the best way for folks to find you and get in touch? Either your website or your Twitter? What’s the best way for folks to find you?

Martin Pergler: My website is B-A-L-R-I-S-K dot com. Balrisk, as in Balanced Risk Strategies, which is the name of my company.  If anybody puts my name into Google, then the right sort of links pop up as the first and second one, so they can always find me that way.

Will Bachman: Alright, so Martin Pergler, belrisk.com. We’ll have that link in the show notes. Martin, this has been a great discussion. I learned a ton. Thank you so much for joining us.

Martin Pergler: Thanks very much, Will. It was great to chat with you. Look forward to listening to a whole bunch of these webcasts over time.

Will Bachman: Thanks for listening to this episode of Unleashed. The show that explores how to thrive as an independent professional. Unleashed is sponsored by Umbrex, the world’s first global community of top-tier independent management consultants. The mission of Umbrex is to create opportunities for independent management consultants to meet, share lessons learned, and collaborate. 

I’d love to get your feedback and hear any questions that you’d like to see us answer on this show. You can email me at unleashed at umbrex dot com. That’s U-M-B-R-E-X dot com. If you found anything on the show helpful, it would be a real gift if you would let a friend know about the show and take a minute to leave a review on iTunes, Google Play or Stitcher. And if you subscribe, our show will get delivered to your device every Monday. Our audio engineer is Dave Nelson. Our theme song was composed by Gary Negbauer. And I’m your host, Will Bachman. Thanks for listening.

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