Risk = Probability X Consequences. Really?


“Wall Street thought it had risk all figured out…” should read that they figured out a marketing message given kudos by the number of Phd’s, MBA’s etc. employed by organisations whose appetite for individual/collective wealth and power was enabled by regulatory and credit (rating) regimes that suited the aspirations of politicians ALL at the expense of their citizens (customers) i.e. those that give them the means to function.

Their own greed and inability to continue to control information that exposed it, has been their undoing. Access to INFORMATION has enhanced our knowledge to such an extent that we have been able to recognise the MISINFORMATION that was presented as ‘knowledge and expertise’.

They created and profited from a volitile financial environment that, once globally interconnected, is beyond their control but, for as long as profits can be privatised and losses socialised, they will not suffer…until what has been ‘hidden in plain view’ can no longer be tolerated or sustained.

Time is nearly up.

Ontonix QCM Blog

Nik-Wallenda-tightroping-over-Niagara-Falls-1cv324b (image from www.impactlab.net )

Probably the most frequently used definition of risk is this one:

Risk = the Probability of something happening X resulting Cost/Consequences

This definition is flawed because of two fundamental reasons, which the formula itself suggests very eloquently:

1. Estimation of probabilities of future events is very difficult (while it is considerably easier when talking of past events). Rare events have very low probabilities and these are extremely difficult to estimate due to the fact that the sample of available data is very small (what is the probability of an event similar to 9/11?). Since this factor multiplies the “cost” in the above equation it is of paramount importance.

2. Estimation of the costs/consequences of these events. This is most difficult. Even after a catastrophic event it is difficult to estimate the total damage and cost.

However, the most important flaw is hidden and it is conceptual…

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The End Of Britain:: The downward slide has begun


Britain is about to be flattened by a tidal wave of debt. It doesn’t matter if you vote Conservative, Liberal, Labour, UKIP – or for no party at all. The facts are the facts.

Let’s take a look at some numbers…

Two and a half years ago, when the Coalition government formed, we were already in a huge amount of debt. In fact, the previous government had left the country sinking under £700 billion’s worth. Take a look at the following chart:

UK_Public_Debt.jpg

Source: ukpublicspending.co.uk Read more of this post

The Radical Redesigning of Business for Resilience | The Nature of Business


We have been, and still are, in the grips of a flawed view of reality – a flawed paradigm, a flawed world view –and it pervades our culture putting us on biological collision course with collapse. It is the paradigm that is reflected in our culture’s infatuation with stuff and our willful ignorance of nature.
http://thenatureofbusiness.org/2013/04/22/the-radical-redesigning-of-business-for-resilience/

Shed no tears for Dimon: ‘Life Goes on’ After ‘Whale’ Loss


Dimon: 'Life Goes on' After 'Whale' LossJPMorgan Chase CEO Jamie Dimon apologized again to shareholders Wednesday for the London Whale trading losses but said “life goes on” for the bank and its clients.

JPMorgan sustained losses of more than $6 billion last year as a result of a bad bet related to credit derivatives. The bet was so large that the trader said to be responsible earned the nickname “the London Whale.”

Regulators have ordered the bank to improve its money laundering prevention, risk management and internal auditing practices. And the bank’s board cut Dimon’s pay in half to $11.5 million, including a $10 million bonus.

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Knowledge Management [video]


A punchy 3 minute video that, not before time, reminds us how much we take for granted.

David Griffiths with more a notable influence from Dave (Cynefin) Snowden

I would highly recommend some related reading but then mine is hardly an objective viewpoint…as I wrote it! HOWEVER, I can certainly recommend David’s blog for some very interesting reading.

General ignorance:: accident or design?

Just because you haven’t identified that “the problem is the solution” doesn’t mean that others, within your business sector, haven’t developed or imported [exaptation] a strategy from another sector to help them seize invaluable competitive advantage….firms that don’t evolve or adapt to a changed environment are easy targets for new entrants to a market!

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