Free Your Inner Luddite & Find Risk Management Peace
Luddite is not a flattering term. The Oxford English Dictionary defines it as “a person opposed to new technology or ways of working.”
Doubling down on its derogatory definition, the dictionary also provides a spelling-bee style usage: "a small-minded Luddite resisting progress." (Spelling bee fans: Imagine hearing it in the voice of Dr. Jacques Bailly, official pronouncer of The Scripps National Spelling Bee.)
But like the belief that inflammable is the opposite of flammable (they mean the same thing), you can see the Great Wall of China from the moon (no manmade structure is visible) or dropping a penny off the roof of the Empire State Building can kill someone (Mythbusters busted that one), the term Luddite is commonly misunderstood—and can actually be a good thing.
The Real Luddites of Northern England
As Smithsonian magazine explains, Luddites didn’t really have a problem with technology. Their beef was with factory owners, and a closer look at history makes them sound more like early union activists than your grandma who still starts every text message with “Dear Michael.”
As Smithsonian magazine explains, “the original Luddites were neither opposed to technology nor inept at using it. Many were highly skilled machine operators in the textile industry. Nor was the technology they attacked particularly new…"
“As the Industrial Revolution began, workers naturally worried about being displaced by increasingly efficient machines. But the Luddites themselves ‘were totally fine with machines,’ says Kevin Binfield, editor of the 2004 collection Writings of the Luddites. They confined their attacks to manufacturers who used machines in what they called ‘a fraudulent and deceitful manner’ to get around standard labor practices. ‘They just wanted machines that made high-quality goods,’ says Binfield, ‘and they wanted these machines to be run by workers who had gone through an apprenticeship and got paid decent wages.’”
The Phantom Ludd
Now for another shocker: There was no Mr.Ludd.
Legend has it that 22 years before the first Luddite protests, “a young apprentice named Ludd or Ludham was working at a stocking frame when a superior admonished him for knitting too loosely. Ordered to ‘square his needles,’ the enraged apprentice instead grabbed a hammer and flattened the entire mechanism. The story eventually made its way to Nottingham, where protesters turned Ned Ludd into their symbolic leader,” Smithsonian magazine recounts.
Thus, Ludd is basically an urban legend who went Office Space crazy on a piece of equipment. (Fun image here: https://www.mimeo.com/blog/destroying-office-printer/.)
Embracing the Best Luddites Have to Offer
What does a fictional Industrial Revolution machinist have to do with risk management? More than you think.
Luddites weren’t anti-technology. They were worried about losing their jobs to automation. Many bankers feel the same way about banking today. They see solutions to automate and streamline processes like risk management and worry about losing their jobs.
But unlike the Luddites that lost out to manufacturers willing to accept lower quality, financial institutions can’t afford substandard risk management. The risks are too high. The potential for missed opportunities is too great.
Today’s enterprise risk management software solutions are designed to make risk management easier, standardizing and adding objectivity to tasks like risk assessments.
Some bankers fear they will be penalized if a risk assessment uncovers a problem. But that’s another misconception. A risk assessment isn’t a job review. Your institution can’t fix a problem if it doesn’t know about it. While it’s never fun to point out a problem to your boss, it’s better that you find and correct it than have a regulator discover it first.
Risk management software solutions give bankers breathing room, so they can spend less time doing the heavy lifting of risk assessments and monitoring and more time focused on projects, big picture issues, and problem solving. It’s not meant as a shortcut. It’s using a scalpel for surgery instead of a paring knife.
If you think of yourself as a risk management Luddite, consider this fresh perspective. It will make your job easier if you’ll let it.