Why not “constructive transparency”?


I recently came across a very interesting article that brought to my attention a phrase I hadn’t come across before: constructive ambiguity.

Isn’t that an oxymoron???

The article is here and it touches upon a topic and writers I have written about before in relation to business as war. If you like you economics with a social conscience and a philosophical perspective Ashwin’s your man.

“The interaction between the market participants, and for that matter between the market participants and the regulators, is not a game, but a war.”

Rick Bookstaber

However, in this article ‘constructive ambiguity’ was being used in terms of preventing moral hazard within a regulatory regime.

That’s when it struck me! Why not constructive transparency?

transparency(1)

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Public Sector: “complexity paralysis” – creator and casualties


No matter how you express it, in a dynamic (non-linear) system, that is, by definition complex, “what goes around comes around” – the “feedback loop” – complexity begets complexity until the system reaches breaking point – “critical complexity”.

But the closer the system operates to this point the more fragile and unstable it becomes.

Things can, do, get ugly, painful, dangerous and costly on a variety of levels and the impact is felt across domains.

Public Sector: “complexity paralysis” – creator and casualties Image by michael.heiss via Flickr A recent blog about procrastination led me to get this off my mind. It has been rattling around in there for some time… Ever had so much going on in your head that you don’t know what to do first? Too many tasks, too little time: which “master” to satisfy? Every issue or task has its own factors to consider: short term effect; long term impact. Assessing cause and effect or imagining problems, leading you to “f … Read More

via Get “fit for randomness” [with Ontonix UK]

Data Mining: Detecting patterns isn’t the same as looking for them


LOS ANGELES, CA - AUGUST 30:  Big Bird arrives...

Image by Getty Images via @daylife

In the fine tradition of Sesame Street this blog is brought to you by the word APOPHENIA and the number 2 [two being the number of members from the Linkedin “Risk, Regulation & Reporting” Forum (on Linkedin) – Vladimir Seroff and Joe Erl – to whom I owe a debt of thanks, for inspiring this blog].

This Ontonix presentation illustrates, the limitations of conventional statistical analysis, when data does not conform to a linear fit…how inconvenient, misleading and downright dangerous! Read more of this post

Innovation: listen to Confucius…and look within


“To put the world right in order, we must first put the nation in order; to put the nation in order, we must first put the family in order; to put the family in order, we must first cultivate our personal life; we must first set our hearts right.”Confucius

Failed approachesI thought it worth sharing this extract from a recent email exchange. Because, it is true to say that, grasping the nature of what we (Ontonix) do can be difficult PARTICULARLY when it is perceived as a “challenge” to long (and dearly-held) belief systems. Even though the knowledge and technology upon which they are based have been discredited or superseded!:


 

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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.