What every leader needs to know…but can be too afraid to ask!


I have come to the conclusion that it isn’t terribly important that Business Leaders grasp what complexity is, as long as they “understand” and reap the rewards of managing it for the benefit of their stakeholders.

Whilst Academia indulge in “mental masturbation” and wrestling with competing definitions, the impact in the commercial world required a solution. That is what Ontonix have developed.

Check your ego at the door

Although a Business Leader doesn’t need to “totally get complexity” there is still a major challenge and that is to recognise that he/she doesn’t know as much as they would like to think they do! But it is the same for all of us,  to such an extent that it may be better to “unlearn” aspects of what has been accrued over many years…

Failed approaches Progress has made novices of us all!

Click on the picture for a fuller explanation of the problem:

Business knowledge and intuition come from experience. BUT, if that experience – like statistical risk data accumulated, in some instances, for centuries – relates to period that bears little or no resemblance to the current era it could be as much use as an A – Z for the wrong city!

Ontonix DON’T leave our clients to “get lost”. We provide, otherwise hidden (silo free), insight into the business structure, pin-point accuracy and a unique map, prepared from current (real-time if required) data: no assumptions; no models but a rigorously tested, 100% quantitative, means of interrogating data relevant to the system and its environment…

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In modernity, technology has transformed the nature and pace of business, in some instances, way beyond the capability of conventional techniques. The frailties of making assumptions or relying upon the wrong analyses have cost this and future generations dear. Yet, still, many business decisions are judged upon the outcome rather than on the quality of the decision…

 

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Socio-Political complexity…naturally!


Monkeys to Politicians...how did I miss that!?

POLITICAL structures evolve in much the same way as biological species, according to new research. And just as species can decline and vanish without warning, unstable political groupings can also degrade and disappear.

The similarities between animal evolution and political evolution are revealed in research published last week in the journal Nature. The international research team from Japan, the UK and New Zealand [led by Thomas Currie of the University of Tokyo], showed how it could build “family trees” for emerging political structures to map out their evolutionary development.

The thing that most startled the researchers was the fact that “cultural evolution” could be mapped on to a family tree.

“This study highlights the benefits of applying the same kinds of techniques used to study complex systems in nature to investigate long-term human social and cultural evolution,” the authors write.

“Interestingly, these results indicate that political evolution, like biological evolution, tends to proceed through small steps rather than through major jumps in ‘design space’,” they say.

The price of complexity…

They also found, however, that retrograde steps do not have to progress on this “sequential” basis and can come apart more quickly than they are assembled over time.

“This could occur if small, peripheral groups break away from the control of a centralised state or complex chiefdom, or found new societies with fewer levels of political organisation, or it could occur as part of a rapid, more widespread societal collapse and the breakdown of political institutions leaving smaller, less politically complex groups in some regions.”

 

“Physics Envy…” presentation by Prof Andrew Lo: Risk & Uncertainty (in financial systems)


In this entertaining presentation, Andrew Lo poses some very interesting questions and adds further fuel to the argument that a rigorous scientific approach may yet help us undo some of the ills created by man’s feeble attempts to cheat nature – dare I say, man-made complexity!?

Andrew Smithers (Smithers & Co) has drawn his conclusion – below – It wasn’t rotten maths, it was rotten epistemology. But, I’m sure he won’t be offended if I draw and justify my own conclusions as well as adding some further thoughts from Andrew Lo which would appear to support my own position. In fairness to Mr Smithers his commentary is upon the presentation. My own thoughts are more focused on the robustness [RESILIENCE] of the SYSTEM rather than that of individual companies, portfolios or strategies. I am no expert. More of an enthusiastic amateur whose personal pursuit of a means to develop financial products that delivered TRANSPARENCY, SUSTAINABILITY and CUSTOMER VALUE led me to the realisation I would be better equipped for “the journey” armed with an understanding of COMPLEXITY…something that Einstein spoke so passionately about (below). Hence my involvement with Ontonix.

I have also included, below, a link to a superb article from Fund Strategy magazine, “Back to Nature”. In it Andy Haldane (Director of Bank of England), Lo and others recognise that there is much more for economists…all of us…to learn from the study of biological systems.

If you are involved at all in investment, insurance, credit or risk management and have aspirations that you may continue to be so, then you had better make sure you get your head round this message and ensure that your boss (and their boss) understand it…or, at least, give it some thought!

If an eminent Economist and a Physicist, both with in depth knowledge of the financial markets, are warning of the dangers of making key business decisions without a thorough and inter-disciplinary (see below) approach, business leaders need to listen if some businesses – industries – are to have a future.

Will anyone be so bold as to model that!!?

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