Can Complexity Thinking Fix Capitalism?

See on Scoop.it – Complexity & Resilience

Can Complexity Thinking Advance Management and Fix Capitalism?

David G Wilson‘s insight:

“An intense effort at regulating the banks has side-stepped the root cause—a lack of transparency—and instead has tried to build fences around the problem. But fences won’t help in the case of a global financial meltdown: the amounts of money involved are just too large. If we want to avoid an even larger meltdown in future, the only solution is to have transparency on what the banks are up to. It’s possible that complexity thinkers like Mark Buchanan may be able to help devise mechanisms that constitute a step towards the needed transparency. But the key requirement here is political will to insist on transparency, not the modelling of complexity science”

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See on www.forbes.com

Related articles

• The Dynamic Properties of Complexity and Business Resilience (fitforrandomness.wordpress.com)

Is Risk Management a Source of Risk

See on Scoop.it – Complexity & Resilience

If you have risk function, however, that fully understands the business model, the deployment of its operational strategy, the sector the business operates in and the macro-economic and socio-political environment in which it operates, then they will be able to provide risk information that is relevant to the business, and can be understood by the business.

David G Wilson‘s insight:

‘Knowledge’ that fails to distinguish between practises that are based upon sound theory and those that rely upon flawed models and assumption-based modelling, do not lead to understanding but to feedback loops of unintended consequences…patterns and correlations of our own making!

Unidentified sources of risk and ill-informed (albeit well-intentioned) efforts to manage without UNDERSTANDING ‘causal relationships‘ has the opposite of the desired effect…

…unmanaged risk does not dissipate but is a source of systemic risk, mis-managed, it adds complexity is amplified through the business’ interdependencies and interactions, feeding-back as volatility and adding to uncertainty.

‘Conventional wisdom’ (or herd mentality) based upon assumptions of knowledge, can/does impair our ability to understand and address issues at source.

Before we had the tools to increase our knowledge we were ignorant but, to have the tools and not use them is dangerous and costly ineptitude!:

‘Corporate Latency’ is a significant source of, reducible, exposure in every domain and, unless it is better managed, we cannot build resilient systems or create ecosystems that can claim to be truly sustainable.

See on ontonix.blogspot.it

Related articles

• Ontonix S.r.l.: Complexity Profiling and Causality (fitforrandomness.wordpress.com)

It’s not a behavioural problem: it’s the system

What we need if we want organisational transformation, if we want more effective organisations, if we want people to find the work they do meaningful: we need to work with the whole system. A buddy of mine in England recently observed that most people seem uninterested in effectiveness. Sad but true, I fear. Still desperately clinging on to “scientific” management mythologies, many folks just seem to want the numbers to add up and people to do what they’re told. A scary prospect if your business has just appointed a new global CEO who is a bean-counter by background and disposition and whose single-minded purpose is to show the shareholders that they are getting richer every quarter. Calling a performance issue a “behavioural problem” comes out of a mechanistic worldview. Yuck.

quantum shifting

Don’t ask a systems thinker for advice on managing performance or staff engagement.  They will probably say something pretty fruity and you’ll wind up frustrated by how fervently they trash conventional wisdom on the subject.  Of course performance, engagement, recruitment, they’re all connected, so your systems thinking friend will sound like a fruit loop because they’ll see the whole picture and proceed to suggest that you are asking the wrong questions, when all you wanted to know is “how to get people to do stuff”.  You go to them as a sounding board because there is something you like about the way they think; when you’ve talked previously, they come up with ideas that seem counter-intuitive at first, but are actually surprisingly on the money.  However, when it comes to a sticky situation you are actually dealing with, you don’t want to hear them bang on about the system, the…

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Knowledge Management:: Why Management Consulting Will Be Disrupted: Part 1

A lot more than Management Consultants NEED to learn from “interactions” and interdependencies IF their particular skill-set is to remain relevant. The world is better understood when viewed, as it can be in the Digital Age, as an infinite series of inter-connected systems.

Complexity (of the ‘system’ – business model, or corporation, etc.)
x
Uncertainty (of the environment, market, economy)
= Fragility (of the situation)
Evidently, U cannot be managed but C can.
Measuring, monitoring and managing ‘current complexity’ is more effective than conventional means of assessing, rating, managing and modelling risk. And why it is better that a system be less complex [Occam’s Razor].
The best way to impact C is by starting from the top of the Complexity profile. Because the profile is computed based on a model-free method, there are no subjective ‘weights’ to adjust. Basically, this guarantees that you hit the most important parameters first, i.e the hubs.
A system CANNOT perform functions for which it was intended without, first, possessing and maintaining the minimum amount of complexity to do so. Therefore, by monitoring current complexity, the potential risks associated with loss of function(s) due to endogenous events, are preceded by ‘fluctuations’ in the complexity measure

The core message is that both THREAT & OPPORTUNITY lie within such (inter) connectedness but the winners of the current, turbulent and competitive marketplaces are those who understand the real power of creating RESILIENCE by developing TRUST & INTERDEPENDENCE (the collaboration that the author highlights).

But you cannot buy trust. It has to be earned and, in times of such ambiguity and uncertainty, competition without differentiation (beyond pricing) is not sufficient.

As Clay Shirky famously(?) said “It is easier to understand that you face competition than obsolescence”

The ‘Risk Leaders’ of the future need to recognise that to accelerate the process of understanding they require to trade TRANSPARENCY – demonstrable, shared, principles – for INFORMATION. Otherwise the (oft overlooked) frictional costs associated with transforming data into information remain. Along with the unidentified sources of excessive complexity and ‘manageable’ risk that, unmanaged, add to volatility, increased uncertainty and – when spread through interactions – can lead to contagion (or ‘systemic risk’)!

We are living in a knowledge driven economy that is 

heavily influenced by collaborative forces sharing intangible and tangible assets to create new value.  The internet has accelerated collaboration and people are learning from the interactions.

Why Management Consulting Will Be Disrupted: Part 1.

Related articles

• What to do if Collaborative Economy Marketplaces Are Disrupting Your Business
• What is Resilience? Why is it Important in a Turbulent Economy

What to do if Collaborative Economy Marketplaces Are Disrupting Your Business

Where, oh where are the would-be future leaders in Financial Services? That isn’t those that are ‘struggling’ with decisions surrounding options 1 – 4, rather it is those who are looking at 5 & (particularly) 6 as a means of building sustainable resilience into their own model and sharing these properties with stakeholders, i.e. recognising the interconnected nature of business ecosystems.