Don’t (just) believe your eyes:: heuristics + complexity = guesswork

The perils of making assumptions about the integrity of an object, individual, entity, etc. are beautifully summed up in the familiar expression “never judge a book by its cover”! Despite this knowledge, I will guarantee that we have all done it, regretted it, learnt a (sometimes painful) lesson and moved on. But that still doesn’t stop us from making misjudgements again and again in our daily lives. It’s human nature. Heuristics is a very useful ally to marketers as they can exploit it to “mask a multitude of sins”!

We need to be aware of our own limitations when it comes to dealing with the highly complex. And it doesn’t get more complex than the human body or the digital world of molecular engineering and nano technology. Hence the brief science lesson:

In excess of 99.9% of the “Electromagnetic Spectrum” (below) is outwith our visible spectrum i.e. it is hidden or “invisible” but it is there and it contains information that could, literally, make the difference between life or death! Read more of this post

ISO 31000: Dr Rorschach meets Humpty Dumpty…splat!!!

This is, what I call, a “Wispa moment”. If you remember the adverts for the 80’s chocolate bar you may recall Gryff Rees-Jones and Mel Smith in one of their face-to-face dialogues made famous by the Comedy series, “Not the 9 O’clock News”.

So, why a Wispa moment? Because the “punchline” was that “…the people that make ’em don’t know how they make ’em”!

Now, effective Risk Management is a much more serious issue than a chocolate bar (I can’t believe I said that) but, this is an industry that has carved such a lucrative niche for itself that, rather than focus on the many failures, the preference is to slug-it-out verbally to see which organisation can come up with the best set of rules (oops! guidelines)….as if there were some realistic chance of global acceptance, adoption and application. Farcical!!!

I have utmost respect for the opinions of Prof Adams & Dr David Hancock and really wish that some of the bumptious, self-important and self-anointed, “experts” would do themselves (and the industries they profess to want to help) a big favour: recognise that, even IF there was scope to move beyond the “language barrier” and the mental masturbation associated with the argument for/against a particular version, their “rules” will always come a poor and distant second to the profit motive.

I am currently having this problem with ISO 31000 – Risk management — Principles and Guidelines. The International Standards Organization published these guidelines in 2009 and with them appears to aspire to global leadership, if not domination, of the risk management industry. According to Kevin Knight, leader of the group that produced the document, it is comprehensive and global in reach – it “provides principles and practical guidance to the risk management process” and it applies to everyone everywhere – it is “applicable to all organizations, regardless of type, size, activities and location and should apply to all types of risk.”

A game anyone can play

I have now read it many times and still do not know what is expected of me. And I think I have worked out why. It repeatedly tells me to do what is “appropriate”: it tells me that my involvement with stakeholders should be “appropriate and timely”; that I should consider “the most appropriate ways to communicate with [stakeholders]”; that I “should allocate appropriate resources for risk management”; and that I should “communicate and consult with stakeholders to ensure that [my] risk management framework remainsappropriate.” The guidance to do the “appropriate” thing appears 34 times in 26 pages.

What is “appropriate”? Those deploying the word appear to assume that all readers will share its meaning. But anyone plugged into discussions about the influence of disparate cultural perceptions of risk will appreciate that this is a facile assumption. All these “appropriates” are Rorschach inkblots. The famous Rorschach test is known as a projective test. Subjects are shown ambiguous stimuli (inkblots) and asked to say what they see. Although psychologist have failed to reach a consensus on the interpretation of the answers it is clear that different people project very different meanings onto ambiguous stimuli.

“Appropriate” is not the only inkblot in ISO 31000. There are 33 “effectives” (“this International Standard establishes a number of principles that need to be satisfied to make risk management effective.”); 13 “culture/culturals” (“Risk management takes human and cultural factors into account.”); 9 “relevants” (I should ensure that “risk management remains relevant and up-to-date”); 8 “comprehensives” (I need “to generate a comprehensive list of risks”); plus 4 “acceptables” and 4 “tolerables”.

Using this (incomplete) list of inkblots I divide 105 inkblots by 26 pages and award ISO 31000 an inkblot score of 4.03. It is a game that anyone can play and I offer it as a way of quantifying the sense of vague dissatisfaction generated by so much of the current risk management literature.

via ISO 31000: Dr Rorschach meets Humpty Dumpty | John Adams.

“Extraordinary” or as it should be?:: Leadership []

The best managers have a fundamentally different understanding of workplace, company, and team dynamics. See what they get right.

Extraordinary bosses see business as a symbiosis where the most diverse firm is most likely to survive and thrive. They naturally create teams that adapt easily to new markets and can quickly form partnerships with other companies, customers … and even competitors.

“8 Core beliefs of extraordinary bosses”

Even when the DNA is similar “we can’t fix today’s problems with yesterday’s tools”:: Part 3


EXCESSIVE COMPLEXITY can come in a wide variety of forms: flawed economic theory; excessive debt (measured in relation to the requisite complexity of the system); poor or misguided Governance [instead of homoeostasis for business]; general/risk management or accounting practices that “constrain” the system in pursuit of skewed rewards or excessive returns*; misaligned operational structure & IT;  or processes &/or products; product, culture and strategy ambiguity (that hamper information-flow);  lack of “requisite variety”; assumptions or decisions based upon correlations in incomplete or misleading data…all very dangerous for individual financial systems and those connected to it, irrespective of scale or domain.

*the assumption that, because we know (knew) how to manage complicated systems, we know how to do likewise with complex systems is, evidently, wrong and dangerous.

We continue to be limited by our own knowledge, thus, invite disaster. We prefer faux certainty (a projection of the future based upon our past) to the reality of uncertainty and, as a result, when disaster strikes, we are prone to “label” what was unforeseen as unforeseeable…that suggests that we have looked but did not see! When, too often, the truth is that we didn’t look but assumed. Or “overlooked” by failing to utilise the tools available to us. Read more of this post

Institutions & Insurance:: physician heal thyself…but do it quick!

English: Visual description of the different l...

English: Visual description of the different layers of complexity in system architecture (Photo credit: Wikipedia)

I have had the privilege of gaining an holistic view of the insurance industry and – armed with the tools that WOULD transform their businesses and our globally-shared future – have had the means to see beyond the symptoms about which the industry, other financial Institutions and Corporations are in denial…

It isn’t a pretty or healthy picture and the time to change is running-out!

As far as I can determine, we got to this point, primarily, because business leaders don’t know any better!

How could they when, at Business School, they learn what they are taught: knowledge is NOT understanding. And what they have learnt is economic theory that is based upon naive assumptions. Then, in commerce, are incentivised to pursue short-term results and to squeeze every last drop of profit, without conscience or consideration of the wider social and ecological consequences. It is what they see in practise on a day-to-day basis, are told by (equally ignorant) Consultants or read in the Management books of leaders from a less inter-connected era. They should be a dying breed but, instead are left to kill at will!