Innovation:: managing complexity & reducing risk [Design News]


I was first aware of the author courtesy of this quote…that alarmingly few business ‘leaders’ appear to, either, believe or understand…

“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 human-centred design—understanding the interfaces among technology, people, communities, governments, and nature. This is what makes complexity manageable”.

If you are in the business of making money based upon the ability of another party to avoid financial loss, then your own ability to identify the properties that distinguish ‘good risk from bad’ is, SURELY, fundamental!? So the message that there is a means to gain “…understanding that averts catastrophe“, through “understanding the interfaces among technology, people, communities, governments, and nature” must surely be greeted with wide-eyed enthusiasm. Read more of this post

Business Insurance:: ISO 31000 should we believe the hype?


image

Apparently,

“…risk managers should use standards such as ISO 31000, “because standards, no matter what kind or which ones, support key tools and processes.”“Standards allow you to proactively address risks with some discipline,” he said. “Standards also relate well to the whole idea of focusing on outcomes.”

http://www.businessinsurance.com/article/20130602/NEWS06/306029979?template=smartphoneart

Surely the focus should be upon being proactive and ‘managing’ emergent risks, NOT outcomes!?

Where, I suspect, NASA have a distinct (informational) advantage is that the multi-scalar interactions among components, processes, networks of sub-systems and systems are each rigorously tested at every point in assembly and operation…

Read more of this post

Adaptive Process versus The Sourcerer’s Apprentice


“Adaptive processes are therefore not about being chaotic, creative, un-structured or non-compliant but about using the real-world dynamics of work to create a process that fulfills all goals, follows all compliance rules and can change at the drop of a hat to be better NEXT TIME.”

UK insurance ‘dissected’


I felt compelled to respond to some comments that were prompted by a previous article:

IBM Insurance:: does the industry really care what customers want? I wonder…

The following comments come from a, highly experienced and senior, former insurance executive, who now works for one of the major Global Consulting firms. Obviously I wouldn’t name names without first gaining the approval of the individual in question but I really wanted to share my thoughts. After all that’s why I blog.

For many years I have eagerly anticipated some meaningful debate with thought leaders, passionate or concerned people from within the insurance industry. But I have been, consistently disappointed. I wish I was more confident that these views might spark some meaningful discussion…but I won’t hold my breath!

The comments:

I think David Wilson is making the point that despite the results of the IBM survey, he’s seeing little action from the UK insurance industry. I think at the moment UK and Western European insurers have their hands full with Regulation – Solvency II, RDR – and this is diverting their attention.

Even so, in terms of innovation, UK insurers (or at least Northern European insurers) are seen as leading the global pack in terms of capital effectiveness and optimisation, with the North American market looking to UK as an example of best practice especially in the area of risk management.

My response:

What are the key issues identified:

  1. Compliance with additional Regulation – brought about by cultural, operational and regulatory failures
  2. UK & Europe seen as innovation leaders – based upon the above, should this be the case? And,
  3. capital effectiveness and optimisation – are these correct metrics for innovation and compliance?
  4. risk management – where is the evidence of “best practice”? – I see plenty of evidence of “bad practice” that has become ‘accepted practice’ across the industry. What are current practices in relation to complexity, business resilience and systemic risk?
    Insurance and banking have convinced themselves that they have been/are innovative but, if this is true, why are they the least trusted and most complained about industries according to their customers? Does that not explain the perceived need for more regulation?

Read more of this post

Why not “constructive transparency”?


I recently came across a very interesting article that brought to my attention a phrase I hadn’t come across before: constructive ambiguity.

Isn’t that an oxymoron???

The article is here and it touches upon a topic and writers I have written about before in relation to business as war. If you like you economics with a social conscience and a philosophical perspective Ashwin’s your man.

“The interaction between the market participants, and for that matter between the market participants and the regulators, is not a game, but a war.”

Rick Bookstaber

However, in this article ‘constructive ambiguity’ was being used in terms of preventing moral hazard within a regulatory regime.

That’s when it struck me! Why not constructive transparency?

transparency(1)

Read more of this post