“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

Risk Management:: we have one history but multiple futures – can we “fix” it?

OK, so, in Economics and Finance we hear a great deal about “models”. Despite the obvious and much written about, failings, great store is put in their accuracy and ability to predict…even though, we already KNOW that, meaningful prediction about future events, based upon past events and outcomes, IS NOT POSSIBLE! 

We are [still] in crisis and surrounded by increased volatility, uncertainty, complexity and ambiguity: most of it of our own making.  The need for CHANGE, to give us hope worth clinging to, is even more pressing. But…

…we can’t begin to rebuild trust, an industry or economies without reliable tools:

Financial and Political mismanagement, misinformation, manipulation and mis-selling brought us to this point and mere rhetoric about “change” cannot mask these facts!

TRUST needs a foundation: the failure of past models, techniques and tools tell us that, without TRANSPARENCY, we need evidence from those that claim the ability and desire to (re)build a RESILIENT and SUSTAINABLE future.

One in which the integrity of the entire “structure” is ROBUST from the bottom up, or inside out [i2o].

Related articles

• Complexity in FS: why trying to predict…is [still] futile (fitforrandomness.wordpress.com)
• Complexity: structural engineering for business survival (fitforrandomness.wordpress.com)
• Banking: decline of mature markets – fulfilling the prophecy (fitforrandomness.wordpress.com)
• World Economic Forum: “we have to avoid using yesterday’s solutions to address today’s risks” :: BBC News (fitforrandomness.wordpress.com)
• Can You Fix That? [Forbes]: not without looking to the future… (fitforrandomness.wordpress.com)
• Mapping responsibilities for a systemic crisis in a network society (fitforrandomness.wordpress.com)
• Video: Business lessons from quantum theory!!! (fitforrandomness.wordpress.com)
• Adaptability: The New Competitive Advantage (fitforrandomness.wordpress.com)
• Inviting meltdown: Preserving the Status Quo with Artifice and Lies Leads to Systemic Collapse (fitforrandomness.wordpress.com)
• Ontonix: Rating the Rating Agencies – Moody’s “A3” rating (fitforrandomness.wordpress.com)

Data Mining: Detecting patterns isn’t the same as looking for them

Image by Getty Images via @daylife

In the fine tradition of Sesame Street this blog is brought to you by the word APOPHENIA and the number 2 [two being the number of members from the Linkedin “Risk, Regulation & Reporting” Forum (on Linkedin) – Vladimir Seroff and Joe Erl – to whom I owe a debt of thanks, for inspiring this blog].

This Ontonix presentation illustrates, the limitations of conventional statistical analysis, when data does not conform to a linear fit…how inconvenient, misleading and downright dangerous!

Connecting the dissident dots…”Tipping Points”

Mark Mobius is one of the most influential voices in Global investments and he is talking about when and what, NOT “if”, in terms of “tipping point” for the next global financial crisis. He’s right..

The foundations of the world economic system are so decayed and so corrupted that even a stiff breeze could potentially topple the entire structure over. Over the past couple of months a constant parade of bad economic news has come streaming in from Europe, Asia and the United States. Signs of an impending economic slowdown are everywhere. So what “tipping point” will trigger the next global economic downturn? Nobody knows for sure, but potential tipping points are all around us.

It’s Not About You: wisdom for the new [old] culture

It’s not a new message but a timely reminder for those embarking upon a journey in business-life. The “joy” of working and achieving interdependently is still an anachronism to those trapped by the prevailing culture but THEY are the one’s out of step with the natural way of things…and who have brought us to this point of socio-economic collapse!

Extract from an article I did in 2009: INSTITUTION + INDEPENDENCE = RELIANCE (DEPENDENCE)

It is “they” that need to change and by demonstrating what can be achieved by understanding that every system, particularly the most complex varieties, performs better when they work INTERDEPENDENTLY and will deliver benefits far beyond the mere “task in hand”.