Global Supply Chain fragility [Procurement Intelligence Unit]

English: Risk Management road sign

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Back in 1776 Adam Smith wrote about the “specialisation of labour” and, like complexity, this brings enormous benefit to an organisation (or in this case of a nation) BUT the old adage about “too much of a good thing” holds true.

Improved productivity is the holy grail for most CxO’s but, without frequent scanning of the ecosystem (upon which the organisation is reliant), careful measurement and management, the point at which the benefits of specialisation turn negative can, suddenly and unexpectedly, be reached: at Ontonix we talk in terms of “critical complexity“.

Although labour specialisation can increase productivity, overemphasis on the division of labour/product/market would result in overspecialisation. Pashke (2004) explains that the overspecialisation of labour has the tendency to restrict communication between the various areas of (work) expertise and the general public. This then would ensue in communication gaps appearing within and outside the organisation: specialised knowledge becomes exclusive.

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Creators and casualties of complexity: why banks are eurozone’s fault line [BBC]

The familiar expression that springs to mind is “what goes around comes around” or, in Biblical terms, perhaps befitting the scale of the problem…

“as you sow so shall ye reap”

However, please note the deliberate use of the term “casualties” rather than victims. Because, the ability to socialise the losses renders citizens as the VICTIMS!

Here’s the lethal chain of causality: banks have found it harder to borrow because of their big loans to the likes of the Italian, Spanish and Portuguese governments, and because of fears these governments will struggle to repay their debts; but if one or more of the banks were nationalised, the perceived liabilities of these governments would increase; and that in turn would erode confidence in the ability of other banks to repay what they owe; and so on, till no institution in the eurozone is seen to be sound. Read more of this post