“Never in the history of the world have we faced so much complexity combined with so much incompetence and understanding of its properties” Nassim Taleb [Black Swan].


Without the appropriate tools complexity is unseen: it is both problem-solving capability and, unmanaged, has the capacity to destroy a business [system] from within.

When it comes to reducing the “noise” around signals, upon which our shared-future may depend, they don’t get more effective that Nassim Taleb and, the late, Benoit Mandelbrot. This interview from 2008 is well worth re-visiting.

But so many appear totally absorbed into the prevailing culture that they have their eyes on the “prize” of extrinsic rewards, such as sales commissions or other financial rewards that, admittedly, do work well when a task simply requires people to follow a formula. However, according to research cited by Dan Pink, for jobs that require complex or creative thinking, extrinsic rewards can be dangerous, because they tend to restrict people’s ability to notice things on the periphery and craft novel solutions.

The inability to discern SIGNAL from NOISE when we are, increasingly, suffering from information-overload is, perhaps, understandable. But it can be a tell-tale sign that a business is overlooking or ignoring vital signals from its environment [marketplace; ecosystem] or that the ability to interpret is impaired…whatever the excuse the signals are aplenty but it does require an acceptance of the need to look and to LISTEN.

“Never in the history of the world have we faced so much complexity combined with so much incompetence and understanding of its properties” Nassim Taleb.

http://rs.resalliance.org/2008/10/24/turbulence-and-finance-taleb-and-mandelbrot/

Broaden your mind:: Nassim Taleb reading recommendations


You don’t have to agree with all that he says, like his (occasionally) abrasive manner or even have much of an understanding of probability, financial markets, uncertainty, complexity and risk to learn some interesting information from Nassim Taleb’s book recommendations.

Another fascinating source of “challenging” reading material, to which Taleb contributes and that I would highly recommend is Edge.

via Book Recommendations from Nassim Taleb | Farnam Street.

Nassim Taleb [Princeton Uni. presentation]:: Fragility and “Anti-fragility” [resilience]


When Taleb speaks the financial world should listen

I am a fan of Nassim Taleb and, even though I never studied Maths beyond school, I understand what he is saying. And, more importantly, WHY! For me, he is “the contrarians contrarian”.

For the sake of clarity, when NNT refers non-linear systems these are complex systems…like a business.

Although NNT delivers this presentation as if someone else had prepared it…in an unfamiliar language… the message is pretty clear. The fact that much of it runs contrary to “conventional wisdom” is no bad thing. In fact, with the growth in his personal popularity, following on from the success of his excellent books and the advent of the Institute for New Economic Thinking, it is reassuring that those who have questioned aspects of the thinking that has underpinned the Financial Sector for so long, are no longer so easily dismissed as radicals, nutters or heretics. It is only with a growing number of informed-thinkers on this and related subjects, that we have any chance of reaching a, much-needed, “tipping point” from where we can begin to repair the damage done…instead of adding to it! Read more of this post

“ERM is not enough”:: How to prepare for a Black Swan [Booz & Co]


Great to know that there are still major Consultancy firms ready and willing to wade-in to help firms understand the type of risks that could “kill” an enterprise but about which too little is widely known, less is understood and next to nothing is done to extend the current “risk horizon” or to build RESILIENCE into the Commercial/Corporate defences.

Of course the following perspective is certainly not the only one available…”Black Swans”, Systemic Risk, Complexity, Uncertainty are topics that I have covered in this blog on MANY occasions…but it is worth a read. It may answer some questions or prompt new one’s, either way, you will have given the matter further thought and, if it leads you to a more resilient enterprise, the benefits will be communicated to others…and you can thank me later!

These events can threaten a com­pany’s survival, and boards and senior leaders are responsible for protecting shareholders and other stakeholders. They must ask, What else can go wrong?

A Disrupter Analysis Stress Test

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2011 IBM Global Business Resilience and Risk Study:: cling to the wreckage of failure…or invest for the future?


imageThere isn’t much point in me, again, reiterating WHY “Corporate Resilience” [Nassim Taleb’s “antifragility”] is so important in the Digital Age! So, whilst I am slightly concerned that this report seems to infer this is more of an issue for larger firms, it is probably best I let any interested readers make their own minds up on the matter.

Traditionally, risk management tended to focus on a combination of risk transfer—achieved through insurance or other financial products—and business continuity planning to keep the organization running during a crisis. Beginning in the 1980s some companies started to develop enterprise risk management (ERM) programs building on the “circle of risk” first conceptualized in 1974 by Gustav Hamilton, risk manager of Sweden’s Statsföretag AB. The idea was to link different risk management activities such as identification, assessment, control, financing, monitoring and communication into a continuous process. In many cases, however, each element continued to operate within organizational silos.

The economic downturn beginning in 2008 triggered new interest in risk management, driving adoption of truly holistic approaches where managing risk is inherent to every decision. Today, leading organizations are pushing these concepts further to develop enterprise-wide business resilience strategies. They strive to make the ability to respond rapidly to all kinds of unexpected events—opportunities as well as threats— part of the corporate culture. This means building a business resilience strategy that engages everyone in the organization.

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