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.

Complexity, risk, uncertainty and change

Business management, particularly for those intent upon ‘change’ or responsible for managing exposures, needs a rigorous, objective, measurement of the endogenous properties (complexity) that enables the functionality from which (through interactions with exogenous parties) the business generates the revenues that sustain it in changing and turbulent economic times.

“Complexity increases cost and decreases flexibility — often in unforeseen ways — and also tends to decrease stability,”….

Peter Leukert, CIO of Commerzbank

It is the number, nature and integrity of dynamic, multi-scalar, interactions that are the sources of strength (enabling performance greater than the sum of the parts). The ability to distinguish and respond to ‘signals’, that maintain the variety, effectiveness and agility of the complex system, from the ‘noise’ of flawed metrics, self-serving culture, hierarchical structure (silos), skewed incentives – of an unsustainable, failed or failing, model (reliant upon  assumption, reflexive, subjective, statistical analysis and prediction) that has its foundation in flawed (linear) economic thinking.

We won’t get different or better answers while we keep on asking the same questions.

For meaningful change to occur and to be sustained requires a rigorous justification, sufficient to counter financial projections that satisfy the goals of C-level short-termism that are detrimental to the stability and long term health of the business.

The 7 Element OEM System: Breaking the Vicious Complexity Cycle

Organizations often use different names in different areas for what are essentially the same controls addressing the same Causes of Failure. For instance, processes such as Process Hazard Analysis (PHA), Hazard and Operability Study (HAZOP), Process Failure Modes and Effect Analysis (PFMEA), Equipment Criticality Ranking, risk registers, risk “bow-ties”, and other similar tools are all designed to address the same common Cause of Failure – failure to identify and assess risk. Implementing multiple variations of the same tool in response to poor performance or incidents drives organizational and process complexity.

http://www.wilsonperumal.com/blog/the-7-element-operational-excellence-management-system-breaking-the-viscious-complexity-cycle-2/

Good thinking, sound advice but the wrong starting point!

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

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…

[Ontonix] Coping With Turbulence: More Theories and Math?

…math is often used to model things that cannot be modeled (in the sense that the results such models produce are mathematically correct but totally irrelevant). Risk, and especially the consequences of risk, are something that math is unable to embrace. This is because risk lacks a definition, a metric (standard deviation is NOT a measure of risk) and, most importantly, because it is a reflection of subjective human sentiments as to the potential level of regret after some hazardous circumstance has actually materialized. Now how do you measure that?

See on Scoop.it – Complexity & Resilience
Author : Ontonix
See on www.interfima.org