Even when the DNA is similar “we can’t fix today’s problems with yesterday’s tools”:: Part 3


WARNING THE FOLLOWING ARE BAD FOR THE HEALTH OF A BUSINESS SYSTEM:

EXCESSIVE COMPLEXITY can come in a wide variety of forms: flawed economic theory; excessive debt (measured in relation to the requisite complexity of the system); poor or misguided Governance [instead of homoeostasis for business]; general/risk management or accounting practices that “constrain” the system in pursuit of skewed rewards or excessive returns*; misaligned operational structure & IT;  or processes &/or products; product, culture and strategy ambiguity (that hamper information-flow);  lack of “requisite variety”; assumptions or decisions based upon correlations in incomplete or misleading data…all very dangerous for individual financial systems and those connected to it, irrespective of scale or domain.

*the assumption that, because we know (knew) how to manage complicated systems, we know how to do likewise with complex systems is, evidently, wrong and dangerous.

We continue to be limited by our own knowledge, thus, invite disaster. We prefer faux certainty (a projection of the future based upon our past) to the reality of uncertainty and, as a result, when disaster strikes, we are prone to “label” what was unforeseen as unforeseeable…that suggests that we have looked but did not see! When, too often, the truth is that we didn’t look but assumed. Or “overlooked” by failing to utilise the tools available to us. Read more of this post

Even when the DNA is similar “we can’t fix today’s problems with yesterday’s tools”:: Part 2


INFORMATION – INTELLIGENCE – INNOVATION have transformed our INVENTIONS, theories and practices to such an extent that we need to be aware of the limitations of our knowledge: we MUST question what we “know”…not so much a case of familiarity breeding contempt but leading to “ignorance” and increasing risk.

The complexity of some man-made systems has so outstripped our ability to manage them that, increasingly, we need to draw upon our observations of the complex systems found in nature 

“The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.”

Practice without sound theory will not scale…but it WILL expose and “amplify”, wrong assumptions, errors & omissions

The irreversible complexity of man-made systems* e.g. communications, IT, transport, economic, financial, business, logistics, business, etc. have outstripped our ability to understand, maintain, manage or repair flaws without the tools and techniques that enable us to examine the relevant system components and relationships at a variety of scales [micro – macro – holistic]: Law of Requisite Variety (refer Part 1). Read more of this post

UPDATED:: A BIOLOGICAL MODEL FOR BUSINESS AND FINANCE


Blue_Moon-1920x1200

I originally blogged this item in August 2009. A lot has happened (to me), to my understanding of risk as well as complexity-related issues since then. Much has happened in the wider world too but disappointingly VERY LITTLE HAS REALLY CHANGED.

I can only take heart from the fact that a whole lot more people in business are now beginning to realise that they can no longer rely upon the institutions who have “always been there” to take care of the big stuff. Increasingly right-minded people are getting to grips with the notion that if you cannot predict risk you need to GET FIT FOR RANDOMNESS by ensuring that your business is robust.

Enjoy….Introduction to an evolving world

Related articles by Zemanta