Thank (or Blame) Adam Hartung for this blog

Adam Hartung wrote a great column in Forbes on thinking prospectively.  So good, I took it on board to frame a conversation about R&R.

  1. Stop waxing eloquently about what you did last year or quarter. Yesterday has come and gone. Let’s talk about the future.

In 2015, R&R Consulting will focus more on selling.

  1. Tell me about important trends that are going to impact your business. Is it demographics, aging population, the ecology movement, digitization, regulatory change, organic foods, mobility, mobile payments, nanotechnology, biotechnology…?  What are the critical trends that will impact your business going forward?

Our business is essentially protected, and protectionism is a formidable adversary when you are an advocate of change. The most critical trend facing the ratings business is need to evolve from ordinal rankings to bona fide risk measures of risk and uncertainty. This is a very dense assertion that needs several steps to unpack.

  1. Tell me your future scenarios. How will these trends change the way your customers and your company will behave?  What are your most likely scenarios (and don’t try to be creative to preserve the status quo!)

2015 is the first year-we’ve been around 15-that R&R feels speaking frankly about how to reform the structured credit markets isn’t going to jeopardize our franchise.

  1. Tell me how the game will change for your industry over the next 1, 3, and 5 years. How will things be different for the industry, based on the trends and scenarios?  The world is a fast changing place, and I want to know how this will change your industry.

This is a great question. Thank you for asking it. R&R principals believe that the game will be seen to have changed when financial regulators formally adopt the position that credit ratings can be wrong. We will make available the long version of how this is likely to happen as a research piece in February 2015.

  1. Tell me about the customers you lost last year. I gain no value from hearing about/from your favorite customers that love what you already do. Instead, bring me info on the customers who are buying alternative products, changing their behaviors in ways that are starting to impact sales. Even if these changes are only a small percentage of revenue.

In 2013, R&R gained Mass Mutual Japan as a client for our re-rating/valuation platform, which we’ve localized for Japanese RMBS. There is amazing value in these securities. You will be hearing more about it in our 2015 research. In 2014, a private equity firm became a client for the same platform, which we’ve customized for Asian ABS. R&R provides added-value information on U.S. and Chinese structured deals that some members of this group are invested in. We hope to have some readers of this group as clients down the road.

  1. Tell me who the competitors are that are trying to change the game. Don’t tell me that these companies will fail. Tell me who the players are that are really trying to do something new and different.

Competitors in this space have been marginalized. Many voices of people trying to make a difference can be heard in this blog.

  1. Tell me about the fringe competitors. The ones you constantly say do not matter because they are small, or not part of the historical industry, or from some distant location where you don’t now compete. Tell me about the companies doing the new things which are seen as remote and immaterial, but are nibbling at the edges of the market.

We hear through the grapevine that the established players say this about R&R (just not to our faces)!

  1. Tell me how you are reacting to potential game changers in your market. What are your plans to deal with disruptive competitors and disruptive innovations affecting your way of doing business?  Other than working harder, faster, cheaper and hoping to do better, what are you planning to do differently?

R&R wants to find ways to collaborate with any groups who are interested in reducing the noise in the financial system regulatory framework and moving to a more scientific basis.

  1. Tell me how you intend to be a market game changer. Tell me what you intend to do that aligns with trends and leads the company toward fulfilling future scenarios as a market leader.

There are many parts to our answer, but I think the most important way to change the game is to raise consciousness about the limitations of our financial thinking, where finance/economics is knowledge and where it is only a kind of cultural artifact or religion, even; and the role our financial ideas play in incentivizing behavior and allocating wealth. Is this really the best we can do with what we have?

10. Tell me how you will disrupt your own organization so the constant effort to enhance the old success formula doesn’t kill any effort to do      something new and different. How will you keep these experimental white space teams from being killed, or simply starved of resources, by the organizational inertia to defend and extend the status quo?

Candidly, staying true to the mission dictates that we all disrupt each other once in a while.