The Connected Company: How Distributed Organism Businesses are Rising Against the Machine to Build a More Connected World

“Companies are not really machines, so much as complex, dynamic, growing systems. After all, companies are really just groups of people who have banded together to achieve some kind of purpose…"

Dave Gray, Author “The Connected Company”

I can recommend Dave’s enlightening presentationimage

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Complexity and Consequence: what financial and risk engineers MUST learn from mech. eng. (or anywhere)

Gadget craziness

Image by XuRxO via Flickr

Recently, I have found myself writing about the importance of ADAPTABILITY* & RESILIENCE in complex (business) systems. This is, partly, due to the fact that, the acceptance of the “shortcomings” of current risk models and tools, are becoming more widely “recognised” (in some instances “admitted”)!

*Boston Consulting Group recently cited “Adaptability: the new competitive advantage”.   

The number of Consultancies that – after many years of profiting from preaching the merits of (now-discredited) models and strategies – have now discovered, and wish to share, their “new found” expertise in “complexity theory” and “systems thinking”.

Unfortunately, their participation in the education process wont undo the damage done!

WE should be grateful that the damage their contribution to the prevailing culture has done is substantially reduced and that a higher level of business understanding is, increasingly, on the agenda.

However, I suspect that we have not seen the last of Consultancies promoting and implementing “solutions” that make (business)  systems and economies more fragile…because there are fees to be earned! Read more of this post

“Helping Banks is Hurting Insurance Industry” Geneva Association Tells G20

Collapse_smallPlease forgive me for not reaching for the paper tissues  THE real story is that helping banks is hurting …SOCIETY!

Without doubt, the activities of billions of ordinary citizens did not give rise to systemic risk! FACT!

Do we really need to ask, in whose interest is it for the insurance industry to tell only half a story?

OK, so the language is clever “…traditional insurance activities do not give rise to systemic risk”. Hard to argue with. But this communiqué smacks of insurers’ girding their loins in anticipation of the fallout from further, inevitable, global financial turmoil.

Presumably choosing to distance themselves and pointing their fingers at the banks is intended to stave off the threat of further regulation. Even if that is, ultimately, unsuccessful, it may serve to delay unwanted scrutiny and provide the opportunity to adapt the current model. It could also be touted to hard-pressed businesses as a “justification” of a potential tsunami of premium increases that may follow the next financial earthquake: growing seismic activity in the markets serve as a warning.

The insurance industry is, hardly, in the “innocent bystander” category!

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Updated:: Networked Networks Are Prone to Epic Failure

Image: From left to right, a failure cascades through an Italian power network (overlaid on the map) and the internet nodes that depend on it (above the map)./Nature.

Networks that are resilient on their own become fragile and prone to catastrophic failure when connected, suggests a new study with troubling implications for tightly linked modern infrastructures.

Electrical grids, water supplies, computer networks, roads, hospitals, financial systems – all are tied to each other in ways that could make them vulnerable.

“When networks are interdependent, you might think they’re more stable. It might seem like we’re building in redundancy. But it can do the opposite,” said Eugene Stanley, a Boston University physicist and co-author of the study, published April 14 in Nature.

via Networked Networks Are Prone to Epic Failure | Wired Science |

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Complexity – Economics – Risk: A Brave Army of Heretics

I have said before that complexity certainly isn’t a “new concept” it is just that our understanding of the subject has grown in the last 30 years…and accelerated within the last 10.

At Ontonix we are proud of the level of understanding that we have brought to the subject. Although, widespread recognition has, thus far, eluded us (more specifically, our Founder, Dr Jacek Marczyk). For Jacek and his original team it has been a journey with some recognition along the way. The fact is that, despite some significant success and some major clients, we are still in relatively early days when it comes to practical applications in the Financial Sector where, we believe (and events of the last few years confirm), there is an enormous and pressing need.

Galileo had his critics too!It is easy to challenge “conventional wisdom” based upon the facts but, as history shows us, change can be vehemently resisted when it comes up against entrenched “belief systems”…particularly when such change presents itself as a threat to those for whom power and wealth (individually and collectively) has derived from their “mastery” of the civilized world as we have come to recognise it.

This brings to mind the recent passing of “heretic”, Benoit Mandelbrot whose critique of the “efficient markets” hypothesis over 40 years ago was dismissed. Not the first clever guy to suffer for the truth!

Slowly, very slowly, the message is coming together. Thanks, in the main, to the very tools that allow me to write and distribute my own thoughts…WOW! The following extract contains a link to a very interesting presentation from Prof Andrew Lo “Physics Envy” and the following article “Back to Nature” further illustrate the convergence of  disciplines.

Andrew Lo’s reference to inter-disciplinary: Mathematics – Physics – Chemistry – Biology – Economics – History – Philosophy – Religion, as aligned to fields of knowledge in his “Spectrum of uncertainty”, indicate to me that there is something fundamental that is being overlooked. Common in each of the above as well as Sociology, Anthropology and, due to global inter-connectedness, every aspect of modern life. COMPLEXITY. After all each discipline, and I am sure there will be more that I have not even referenced, relate to differing aspects of the ecosystem within which we exist and without which we could not.

Our work at Ontonix is the gauntlet that has been thrown down in front of a host of “celebrated Academics” and the “wise men” of the Financial Sector! We are the only organisation able to offer a clear, verifiable, definition as well as a means of measuring – 100% quantitative, objective and model-free – the complexity of a dynamic system.

Despite this breakthrough we fully understand why the author of this article (which is certainly for the serious scholar) chose the title A Brave Army of Heretics and it ties-in rather well with a blog from February this year:

The case for “Complexity Analysis”: Blind faith, Greek philosophy and risk