Still subjective, still correlation but getting closer… :: Accenture identify characteristics of "The Risk Masters"


So, if reports from, the likes of AIRMIC “Roads to Ruin”, World Economic Forum/Zurich, FSA (on RBS), PwC, IBM, UK Government, Zurich and Towers Watson (to name a few recent contributors) have failed to penetrate engrained – but flawed – belief systems, it may be a forlorn hope that Accenture can succeed with this report…but, we live in hope! Hence my resolve to share this kind of useful information as widely as possible.

WEALTH WARNING: all risk management is not made equal and it should not be solely about risk…but reward!

Click to EnlargeBlack Swan resilience

More reports into the subjects of risk management, complexity and compliance can also be found here. Of the recognised Consultancy firms it certainly appears that AT Kearney have the best understanding of the subject of complexity but, unlike Ontonix, NONE, to date, have presented a, measurable, definition or means by which an organisation can begin to explore the issue themselves.

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Management Consultants: “Capitalising on complexity”


I have accumulated quite a collection of “papers” advising business how to deal with complexity and am happy to share them…so long as everyone understands that I am not endorsing any of them!

For your delectation I am pleased to add to the list of what, in the main are “qualitative management consultant-speak” that, even when referring to research, interviews, etc. read (to me at least) like documents produced on a topic, primarily because it is topical and offers a further opportunity to secure some well paid consultancy work.

This latest publication is from Celerant Consulting. Make up your own mind…then take another look at the Ontonix website.

Call, email me or get an objective, quantitative, insight into complexity for  FREE!

It really makes my day when other people do a marketing job for Ontonix! OK, so there is never a specific recommendation to contact us but we are happy to settle for the next best thing. That is to identify where complexity IS already costing and will, increasingly, cost through: the impact upon clients, customers, employees and “the bottom-line” budget to identify, measure, manage and monitor on an ongoing basis reduced ROI on assets and facilit … Read More

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“Both insurers and insurance intermediaries need to fundamentally rethink how risk is assessed”


Not my words but those of Achim Bauer, Partner in PwC’s Insurance Practice. I will be really surprised if any more than 1% of industry “leaders” have read these words before, even though they appear in an industry report that was released in early 2010.

Perhaps it would have had greater impact had it been distributed to shareholders in major insurance firms. Because, whilst they may not be risk experts, they are unencumbered by traditional techniques, engrained belief systems formed over many years and justified (not validated) by decades worth of risk data.

Financial Services has a great technique for dealing with “the inconvenient truth” when it comes to risk and other people’s money. It is something that Ostriches are known for and is the perfect position from which to claim that some major, traumatic, loss event was “unforeseen”. Then, after the event, blame another feathered friend: the Black Swan.

It is worth remembering that unforeseen does not, necessarily, mean unforeseeable.

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Living with Black Swans: balancing the books in uncertainty


OK I’m a self-confessed fan of NNT but early on in this interview with his former Professor he again hits the nail on the head. He reminds us of the lessons that every business (and political!) leader needs to learn..

“…You have to avoid debt because debt makes the system more fragile. You have to increase redundancies in some spaces. You have to avoid optimization. That is quite critical for someone who is doing finance to understand because it goes counter to everything you learn in portfolio theory…. I have always been very sceptical of any form of optimization. In the black swan world, optimization isn’t possible. The best you can achieve is a reduction in fragility and greater robustness. You may have heuristics, but not an optimization rule. I hope the message will finally get across because I haven’t succeeded yet.

People talk about black swans but they don’t talk about robustness, which is the real lesson of the black swans.”

Business Leaders of the current culture are not, generally, “agents of change”. As I have said before we need to cultivate Risk Leaders. Those who, not only,  recognise the flaws of the current culture but are motivated to create, champion, execute and capitalise upon new models and strategies.

Apart from the clamour, from better informed and more demanding consumers, for greater transparency, accessibility and demonstrable sustainability, the pressing NEED is for this new breed to embrace the concept that robustness (or NNT’s anti-fragility) can ONLY come from by creating (and maintaining) a sound business infrastructure…from the bottom up or, as I feel is even more appropriate, from the “inside out”: i2o”.

The relevance of scaling and causality

Such problems as Taleb highlights can only be addressed if the owner can view the business (or system) at the appropriate “scale”. Otherwise how would one know where and by how much to “increase redundancy” to build RESILIENCE in order to survive unforeseen and unforeseeable future events?

After all redundancy and robustness cost NOW and need to be maintained, so, have an ongoing impact upon profitability.

Reveal Your Hidden Profits: Looking at complexity in business?


It really makes my day when other people do a marketing job for Ontonix! OK, so there is never a specific recommendation to contact us but we are happy to settle for the next best thing. That is to identify where complexity IS already costing and will, increasingly, cost through:

  • the impact upon clients, customers, employees and “the bottom-line”
  • budget to identify, measure, manage and monitor on an ongoing basis
  • reduced ROI on assets and facilities or increased insurance/risk management outlay
  • reduce business capabilities &/or become less flexible (lose competitive advantage!?)

“I wouldn’t give a nickel for the simplicity on this side of complexity, but I would give my life for the simplicity on the other side of complexity”                                                                                               – Einstein

In previous posts I have made reference (and provided links) to reports by, such as, IBM, McKinsey, PwC, Economist Intelligence Unit (EIU) – on behalf of RBS, KPMG and  AT Kearney, each spelling out WHY COMPLEXITY IS SUCH A MAJOR ISSUE for modern business!

It is reassuring to now see that business’ are being recognised as “systems” operating within inter-connected ecosystems and networks. As a result the “Economic domain” is beginning to benefit from a the lessons learnt in a wide range of inter-disciplinary scientific fields…and can build resilience across domains, rather than destroy it.

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