Ontonix:: how to correct ratings (or how to stop the manipulation)

When war is just too “dangerous” for the financial masters of the universe (even when their political puppets crave it) i.e. when the bankers aren’t able to effectively bankroll both sides, or the outcome is likely to be detrimental to their ability to retain power in a post-critical landscape – NOTHING to do with the number of innocent victims – their most effective means of waging war is to manipulate global finance!

We have already seen the US pursue a high risk QE strategy, aimed at retaining the, once mighty, USD as the currency of international trade, despite the fact that the American economy is shot (sic). In the unlikely event that one of the Middle East powers had attempted such bully-boy tactics they’d have been, swiftly, sorted out. So perhaps us Europeans should be thankful that we aren’t perceived as such a threat!!?

Nobody pays for a sovereign rating. It comes for free, at an agencies discretion. So, while the agencies decide to favour some countries, they try to discredit others. Ratings have become instruments of politics and strategy, and also weapons in an economic war. The lower the rating, the more it costs a government to sell bonds as it must pay higher interests rates. A downward rating spiral may kill even the healthiest of economies…

What rating agencies do not take into account is the resilience (the opposite of fragility) of an economy. A company/country can perform well form  a purely financial perspective but still be fragile. This new aspect of business can easily be taken into account. The same balance sheet, income and cash flow statements can be used to compute the resilience of a company to measure the resilience of its business structure. Once you have the conventional PoD rating and the Resilience Rating™, which ranges from 0% to 100% (100% means the business is very resilient and stable, 0% it is dominated by chaos) you simply multiply the two to obtain a Corrected Rating:

Corrected Rating = PoD Rating X Resilience Rating

This is clear in the image below, which puts together the two

Ontonix – Complex Systems Management, Business Risk Management.

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Build Community for a Resilient future:: M3 Planning

M3 Planning wade-in on one of my favourite topics: business resilience and use another, family business, to illustrate the power of a common bond or purpose. Interdependence is a feature of the most resilient natural or man-made systems…whether local, global or glocal!

Thanks to the vision and drive of Martin Stepek, Scotland has the Scottish Family Business Association to help develop and promote resilience in Scotland through our numerous family businesses.

Everyday we see the ripple effect that healthy organizations have on their internal and external communities. Their power to attract and retain engaged staff that create vibrant communities can lead to a successful nation and world.

For those who might not know it, M3 Planning is a company established by a mother, father and daughter team. Beyond DNA, the three shared another bond – to make long-term planning a more straightforward and beneficial process that could be accessible to thousands of businesses instead of just the Fortune 500s of the world.

The business started nine years ago, and like the rest of the country, M3 Planning has weathered economic crises and been honoured to witness how hundreds of companies have done the same by keeping long-term strategy in mind.

Family-run companies, according to Harvard Business Review’s November edition, weather hard economic times better than companies with more dispersed ownership. The article’s key point – family businesses focus on resilience more than performance.

Though the study found family-owned businesses did not make as much money during good economic times, consistently the average long-term financial performance was higher than non-family businesses in all seven countries examined.

Certainly being resilient is not relegated to family operations, and can be tied to management practices that invest in their people, encourage retention and result in fiscal stability.

1. They’re frugal in good times and bad. This behaviour also is keeping debt low, deciding not to spend more than they make, choosing projects that show a good return on their own merits, and acquiring fewer companies.
2. They are highly diversified and are more international, with a higher percentage of their revenues coming from outside their home region than nonfamily firms.
3. They retain talent better than their competitors. In part, that can be attributed to greater financial stability, which reduces the need for layoffs. But these organizations also spend more on training their people: $1,172 a year per employee on average versus an average of $445 at non-family firms.

Most families have this hardwired to some degree, but beyond the boundaries of families, we have the capacity to establish resilience when we allow ourselves to care and prioritize in favour of the same things. Be it family businesses, healthy organizations, tight-knit communities or groups with common interests, these are all places in which we all live together.

We all have witnessed the power of community in 2012: strength, support, and caring are points where humanity shines through. In 2013, we will continue to honour and support groups who are driving toward improving their communities.

When all the metrics are met and goals checked off, there is no better strategic outcome that can be created than to positively impact the lives of those in your world. Blessings to everyone during this sacred season, we hope you see great things on your horizon personally, professionally and for your communities.

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That is really fascinating. It gives us tremendous hope to embrace complexity with faith. There is no point in ignoring complexity since we are entangled with it every moment of our lives. But once we embrace it knowing fully well how to read, learn and go about it — life is simple indeed. The objective of learning about complexity and applying its principles is to make life simpler; not more complex.

The Practice - Reliability of Complex System

Here is one of many toys I use in my classes on Leadership in Complexity to demonstrate complexity through play. It is a simple and common toy – a double pendulum. It is interesting to see how interactions between few elements really produce complexity. So, the question that I ask at the beginning of a session – ‘Can we predict what is going to happen?‘

We have made a video demonstration of it. It is about 5 mins. Hope you would find it engaging. You may choose to skip it if you like. I suggest a try. While you are viewing it mentally start predicting what might happen the next instant…

Predicting Complexity? ( <– click on the adjoining link to view the video)

What do you find?

Is complexity predictable or not?

On the face of it it appears that it isn’t predictable at all. The movements of the…

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To see the interwoven nature of a problem, it would require our minds to “zoom out” from the problem. However, our years of drilling our minds down to details, makes the experience of letting go of the problem to see its dynamic nature, a new and rather anxious one for many of us. It is understandable.

Systems Thinking Research & Leadership Development Institute (STRLDi)

As it appeared in the Sunday Standard, Botswana on  Sunday Dec 16, 2012 edition.

Dynamic Complexity vs. Detail Complexity

We face problems daily.  And, we do not doubt our ability to deal with them.

Sometimes, this confidence can pull wool over our heads that we can deal even with the stubborn ones, in much the same way.  We would say to ourselves, just work harder.  We will overcome it.

Stubborn problems are issues that despite efforts to manage or contain it, while it first they may look like they are relenting, the results are short-lived (two-to-three years).  And, then it comes back again, this time harder and faster.

For example, in our efforts to survive arid conditions, we engage in pastoral farming.  Except, over time, such practices wipe out the greens (as when livestock consume grass) that would otherwise encourage rainfall.  In some countries, this means it gets only summer rainfall.  This causes conditions…

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Leading in the Space Between Talent and Complexity

Surely “managing complexity” is what we want our talent to do? Isn’t that what they’re good at? Yea, they’re good at managing complexity because it’s usually a complexity of their own making!  Don’t get me wrong, complexity happens no matter what you do, but you can’t let it emerge organically from the collective fumblings of your company’s knuckleheads.

Leading in the Space Between Talent and Complexity.

Related articles

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• Watch "Eddie Obeng: Smart failure for a fast-changing world" (fitforrandomness.wordpress.com)