Still not sure why complexity is such a big deal?:: You won’t be after this – "RSA Animate – The Power of Networks"


Understanding complexity is a major advantage in the Digital Age. Measuring and, dare I say, managing complexity is the first step to achieving the simplicity that Einstein spoke about…this is where the ability to transform failing “models” comes from. This is powerful knowledge and we, at Ontonix, want to share it for the good of us all. It is Our Mission

From, before, our earliest days to today, complex networks are in and around us

Corporate Culture:: it is better to be wrong and to change


Although the main focus of this article is the American Auto Industry, the examples of failing Corporate culture across sectors are plentiful. Whether resistance to change is borne out of inertia, ignorance, arrogance or any one of many other reasons, IF the environment in which a Corporation exists, has changed and it fails to adapt, all the “tried and tested” means of manipulating financial data to present a “healthy” outward appearance can only mask the truth for so long!

Creative accounting, “innovative marketing” (of re-packaged products and services) or improved gross margins (as a result of technology, reduced costs) can deliver better results but are unsustainable and may do little more delay the inevitable.

Organisations that persist with the hierarchical management structures intended to manage people and, predominantly, linear processes in the Industrial era are inviting disaster.

Why did Blockbuster idly watch Netflix destroy its business? Why did Kodak let digital cameras drive a once-mighty industrial giant into penny-stock territory?

Ask Jeff Stibel, and he’ll tell you: because that’s what troubled companies do. Stibel, once an aspiring cognitive scientist in Brown’s graduate program, is now a serial entrepreneur who has led turnarounds at Web.com and Dun & Bradstreet Credibility Corp. “Once the human mind has set out to do something, or has gotten in the habit of doing something,” he told me, changing it is “very hard.” When you add group dynamics, it’s even harder. You don’t need to be a brain scientist, of course, to know that people resist change … and yet, even knowing that, you’d be surprised at how many firms keep driving toward inevitable disaster at top speed.

Shaping the topology of the financial network


The analytic model outlined earlier demonstrates that the topology of the financial sector’s balance sheet has fundamental implications for the state and dynamics of systemic risk. From a public policy perspective, two topological features are key.

First, diversity across the financial system. In the run-up to the crisis, and in the pursuit of diversification, banks’ balance sheets and risk management systems became increasingly homogenous. For example, banks became increasingly reliant on wholesale funding on the liabilities side of the balance sheet; in structured credit on the assets side of their balance sheet; and managed the resulting risks using the same value-at-risk models. This desire for diversification was individually rational from a risk perspective. But it came at the expense of lower diversity across the system as whole, thereby increasing systemic risk. Homogeneity bred fragility…

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Get "fit for randomness" [with Ontonix UK]

socio complexityNot news, unless you have been living in a cave…in which case I could probably recommend some more appropriate reading!

Assuming (dear reader) that you have some interest in the topic(s) this is a very interesting piece. It can be found/downloaded here.

Andy Haldane (Director at Bank of England), Mervyn King and Lord May have been on this “tack” for at least 2 years – I have come speeches, papers or presentations on the subject if anyone is interested – and I have referred to their views in various blog articles over that period.

However, I did want to share this section from the conclusion. Because, these gents have recognised that there is a great deal that we can learn, about, both, cause and solution, from Nature. However, as they point out, due to the Political processes that will, inevitably, affect Bank of England, it is unlikely that solutions…

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Insurance Insight: “Product innovation in European insurance firms is widespread”– where is the evidence???


Hmm, I’m not so sure I’m buying any of this!

In fact, I don’t, entirely, agree with the headline OR the presumption that insurers are willing and able to offer the “peace of mind” that customers, rightly, expect from the coverage, products and services available to them.

A mixture of technical, organisational and market factors naturally constrain how expansive insurers can or should be in terms of developing new products. Most obviously, missing information can give rise to adverse selection or moral hazards and lead to amplified losses. Read more of this post