How complexity spilled the oil


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Notice for regular readers (thanks!) I did not write or influence this headline in any way. If you follow the link you will see it is all the work of one of the most authoritative sources global research companies, Forrester, via the, ever reliable, Computerworld who will keep you up to date on IT and general “geekery”.

If the subject matter looks familiar that is precisely because IT IS! I have written about this specific incident in the blog on several occasions and from a couple of perspectives, going back to the days when it wasn’t fashionable NOT to have a daily dig at BP and poor wee Tony Hayward: a man whose, now legendary, gift for miscommunication, could have been learnt at piñata finishing school!!!

They had just placed themselves, respectively, in the positions of “Big bad Corporate” and “sacrificial lamb” for an outraged global population and US administration desperate to find someone to BLAME. WE already suspected that so much of that rhetoric was about deflection…we ALL knew, from the collapse of global banking, that, when it came to Corporate activities, regulation was a fallacy, only an effective smokescreen and that risk management perceived a mere drain on potential profit and bonus potential…therefore tax revenue!

Current societies…are characterised by their extreme complexity at a moment in history in which traditional political institutions have lost much of the power, a power which has now passed into the hands of multinational companies with their relocation strategies. In this situation, a growing deregulation can also be observed which, in turn, redounds in the appearance of new risks and uncertainties.

Ulrich Beck

The best any of us concerned citizens could hope for was that this incident would be, not so much a disastrous oil spill as an inglorious watershed.

The Gulf oil spill of April 2010 was an unprecedented disaster. The National Oil Spill Commission’s report summary shows that this could have been prevented with the use of better technology. Read more of this post

BP Report: Black Swan …or just a bird covered in oil!?


Does complexity guarantee “system failure”? (revisited)

Even before this event became highly politicized it was shaping up to stand as a 21st Century monument to a culture of Corporate mismanagement: Economy before ecology! The incentives to “cut corners” were simply too great. I have argued before that, all too often, sound risk management comes a poor second to generating profits.

It tends to be “dressed up” as compromise…until it hits the fan!

Anyone care to draw a line?: Global financial meltdown – Toyota – Gulf of Mexico spill – ???

This was/is a hugely complex operation requiring enormous financial and human resource. A tight chain of command communicating and coordinating across several companies. Undertaking a range of interdependent functions as part of a feat of engineering that would not have been possible just a few years ago. NO SCOPE TO TAKE CHANCES, TO CUT CORNERS OR TO BE ABLE TO CONTEMPLATE GAMBLING WITH THE ECOSYSTEM OF A VAST AREA.

Even a company like Toyota (Lexus), whose reputation for quality was well-deserved, were tempted by the lure of $100m per annum savings! I’m sure someone better informed than me has already worked out what their direct financial losses have been, in addition to fines, settlements and the long lasting reputational damage for a proud brand.

BP said in a statement that the report, like its own investigation, had found the accident was the result of multiple causes, involving multiple companies.

Read more of this post

Does complexity guarantee “system failure”?


According to one journalist, whose speciality is deconstructing accidents, it does (see below). Naturally we at Ontonix would like to respond to this statement:

When complexity reaches the point of “critical complexity” system functionality is lost and failure can ensue.

System  complexity can be managed…that is what we do! More Complexity Facts from Ontonix


Nevertheless this is an interesting and worrying observation. One that, when taken in the context of Global Financial Services, begs the obvious question: Read more of this post

NY Times.com: Talking about Complexity and Its Discontents


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Complexity and Its Discontents – Readers’ Comments – NYTimes.com
The worst-case outcome in the Gulf of Mexico raises questions about the human capacity to deal with some kinds of risks.

An interesting blog from NYT with some well informed comments…that isn’t self praise but NYT have highlighted my comments(!)…transcribed below for your “enjoyment”.

See, also, the item on “Can We Do Better at Managing Rare, Big Risks?”

COMMENT:

Discussions around complexity are EVERYWHERE! IBM & McKinsey have both pitched in with recent reports both emphasising
the dangers and need to manage complexity but with very little practical help, no worthwhile definition, no means to measure.
Future reports may warn of the dangers of getting up close and personal with vampires…assuming their is some form of garlic
or stake-based software or consultancy “solution” in the offing!I would like to offer some assistance or, at least, food for thought and discussion:

Complexity is a fundamental characteristic of every dynamical system…

“Complexity is the measure of the amount of structured information in a system”

The amount of fitness of a system is proportional to its complexity – higher complexity implies higher fitness

The amount of functionality of a system is proportional to complexity – more complex system can perform more functions

Each system can only reach a specific maximum value of complexity

Close to the upper limit the system is fragile – it is unwise to operate close to this limit

High complexity = difficulty in management – highly complex systems are able to perform more functions but at a price:

they are not easy to manageWhen a system is very complex and becomes difficult to manage, it is necessary to restructure it, add new structure or

to remove excess entropyMore components don’t necessarily imply more complexity – systems with few components can be more complex than

systems with many componentsWhen presented with two equivalent options, for example in terms of performance, risk or profit, select the one with the

lower complexity – it will be easier to manageSpasms or dramatic changes in dynamical systems are always accompanied by sudden changes in complexity

In nature, systems tend toward states of higher complexity, but only until they reach the corresponding maximum.

This poses limits to growth and evolutionSystems with high complexity can behave in a multitude of ways (modes)

Systems with high complexity are more difficult to manage and control because of the need to compromise

A system with a given complexity will be more difficult to manage if it is made to operate in a more uncertain environment

“High complexity is incompatible with high precision” – this is known as L. Zadeh’s Principle of Incompatibility.

In essence, you can’t make precise statements about a highly complex systemThe amount of sustainable development a given system has is proportional to the difference between its critical complexity

and current value of complexityA fundamental characteristic of highly complex systems: they are robust yet fragile!

I am VERY KEEN to expand upon the above…in particular I would like to get in touch with Nassim Taleb to demonstrate the

model-free technology to measure complexity within a system. Happy to discuss with parties who, like PF Henshaw,
have a depth of knowledge on the subject OR recognise a need within their own field to “GET FIT FOR RANDOMNESS”
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