UPDATED: Reducing complexity – should finance directors be leading the way?

Since writing this article I have, finally, succeeded in obtaining a copy of the GSI 2010 report. It can be found here. It is certainly worth a read as, like so many reports on the subject (a range of Consultancy reports can be found here), it throws more light upon a subject that can only bring benefit from improved understanding.

HOWEVER, worryingly, the common denominator is not the definition or approach but the lack of an objective, quantitative, solution. Unsurprisingly, this is NOT something lacking in the Ontonix proposition.

That complexity is a source of risk has been established beyond any doubt. As is the fact that, conventional risk management does not possess the tools to distinguish cause from effect in complex business systems.  So, identifying sources and mapping non-linear interactions – that, otherwise remain “hidden” within the data – offers a unique insight to the “observer”, enabling the business owner to:

  • gain “crisis anticipation” iro endogenous events
  • reduce risk exposure at source
  • reduce uncertainty
  • improve operational effectiveness
  • improve profitability
  • build-in redundancy
  • maintain resilience

…and create a more sustainable enterprise – economy – world.

“In a complex system, learning how all the pieces—constant and variable—interact gives a depth of understanding that averts catastrophe. That is what we mean by humancentred design—understanding the interfaces among technology, people, communities, governments, and nature. This is what makes complexity manageable”

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Euro 2011: the “tipping point”

Time is NOT on our side!

Despite the urgency, Europe’s leaders still cannot decide upon the best course of action since all of the available options have potentially serious side effects on the economy and financial system at a time when Europe is already headed for a recession, if it is not already in one.  EU industrial production for October was down 2% while Germany’s ZEW (confidence index) has entered deep recessionary territory.  The leading indicators for Italy and France have also dropped to levels indicating recessions in the past.  Austerity unaccompanied by national monetary policy and the ability to devalue can only exacerbate this negative trend.

The problems appear to be spreading to the rest of the globe as well.  Both Indian and Brazilian industrial production is weakening while their leading indexes are pointing down.  Korean industrial production has been flat all year.  Notably, the developing nations’ economies are heavily export-driven, and Europe is an important customer for their goods, although there are undoubtedly country-specific factors at work as well.

Business Insider

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Banking: decline of mature markets – fulfilling the prophecy

Whilst Western eyes are scanning other BRIC markets and wondering what they can do to “weasel” their way out of a predicament of their own making, others (no more credible than they) are adopting a strategy popularised by Warren Buffett:

“Be fearful when others are greedy and greedy when others are fearful”

More than 20 years after Soviet tanks and soldiers pulled out of then-Czechoslovakiain Eastern Europe, Russian influence is on the rise in what was once its imperial backyard. Where guns and bullets failed, rubles are succeeding.

Local governments are selling off state assets to plug gaping budgetary holes as the global financial crisis bites. Western corporations are tightening belts and selling off some assets in the region. Stepping into the void are eager Russian businessmen, some backed by the Kremlin, as money trumps lingering suspicions from decades of Moscow-led Communism.


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UPDATED: facing facts – “creative destruction” or life in the post-critical landscape?

I make no apologies for re-blogging this item in the HOPE that someone (anyone!) heeds the warning signs. Unless I am very much mistaken it is the legal responsibility of company directors to plot and steer a safe course for their “charges”…and I wouldn’t count upon the same leniency as has been enjoyed within the, elite, Political and Financial classes.

So, it is time for “Business Leaders” to make their mark and to set themselves apart from mere guardians of the status quo. 

Recognise the characteristics of modernity and rectify the mistakes now, if you have any intention of being part of the solution. Alternatively, do nothing, apologise and pay an unknown price for your contribution to economic turbulence and uncertainty that are symptomatic of a pre-critical environment fashioned by/for the most self-serving: PLEASE!    

Getting the complexity message across to people who don’t want to know or understand is really tough.

But it may comes as a surprise to some (outwith the industry) that it is incredibly difficult to introduce new, better, more reliable and comprehensive means of managing risk to Financial Services companies…even though it would, significantly, improve their bottom-line – enabling them to improve their customer proposition!


SO, in the circumstances, you may understand why I rarely trouble anyone for their thoughts on “peak oil”, how we can best prepare for a post critical society, how we survive and re-build society. Read more of this post