Updated:: who actually benefits from buying “risk protection”?

I attended an interesting seminar last evening [June 2011], arranged by the Institute of Directors and sponsored by Zurich. Interestingly these organisations also provided (by some margin) the most interesting speakers. The Seminar was entitled “The Reality of Managing Risk”.

“Easy” conclusions: the industry prefers to profit from peddling “faux certainty” (in the form of risk modelling) than acknowledge and prepare its customers and shareholders for the REALITY of uncertainty; Managing, even influencing, risk is a minefield – but is made worse when, conventional RM purports to know and be able to “manage” more than it, in reality, can! Insurance industry leaders of the prevailing culture have established that THEY are better served by achieving short-term goals in relation to price, GWP, growth and market share, than by pursuing long term strategies based upon underwriting risk for profit, rewarding a responsible approach to “business resilience” and building stable – sustainable –  transparent – relationships. Read more of this post

FS Innovation:: better without the painful pricks – a lesson from healthcare

The Financial Services sector would rather indulge in (other people’s) blood letting, whilst trying to tackle today’s problems with yesterday’s tools,  than recognise the societal benefits of exaptive behaviour!

I “understand” that the thought of meaningful change is uncomfortable for many people but, surely, we can no longer afford that to be the case in a sector that continues to profit from inflicting financial suffering across the globe – with all the implications for society and the planet.

WE need to learn from THEIR mistakes, even if they have not: they have no known cure! The theories and tools, with which the highly complex financial systems of modernity were created, are no longer sufficient to contend with the level of complexity that sustains them.

Deep cultural change cannot begin until the practices of using correlations in data from our past to attempt to predict our future are recognised as nothing more than guesswork given credibility by the highly paid and highly qualified, individuals who build the risk models.

Healthcare, moreso than any other sector, has shown us how we can, more effectively, PREVENT &/or CURE the ills that afflict  COMPLEX SYSTEMS…and systems don’t get more complex than that which enables us to diagnose and treat ourselves!!!

“When we see the need for deep change, we usually see it as something that needs to take place in someone else. In our roles of authority, such as parent, teacher, or boss, we are particularly quick to direct others to change. Such directives often fail, and we respond to the resistance by increasing our efforts. The power struggle that follows seldom results in change or brings about excellence. One of the most important insights about the need to bring about deep change in others has to do with where deep change actually starts.”

Robert E. Quinn

Don’t (just) believe your eyes:: heuristics + complexity = guesswork

The perils of making assumptions about the integrity of an object, individual, entity, etc. are beautifully summed up in the familiar expression “never judge a book by its cover”! Despite this knowledge, I will guarantee that we have all done it, regretted it, learnt a (sometimes painful) lesson and moved on. But that still doesn’t stop us from making misjudgements again and again in our daily lives. It’s human nature. Heuristics is a very useful ally to marketers as they can exploit it to “mask a multitude of sins”!

We need to be aware of our own limitations when it comes to dealing with the highly complex. And it doesn’t get more complex than the human body or the digital world of molecular engineering and nano technology. Hence the brief science lesson:

In excess of 99.9% of the “Electromagnetic Spectrum” (below) is outwith our visible spectrum i.e. it is hidden or “invisible” but it is there and it contains information that could, literally, make the difference between life or death! Read more of this post