We Selected the Simple Solution. The Complex Solution Became a Worldwide Standard – Part I


A solution that has been designed in an environment with low levels of complexity can be the cause of failure when:

  • the solution is implemented in an environment with high levels of complexity;
  • the solution itself is extended and becomes too complex; or
  • the solution remains the same but the surrounding environment exceeds a certain level of complexity

Leading in a Complex Environment

Does this sound familiar? You have an effective solution to a complex challenge. But when you try to get it accepted, you find that it differs too much from the way solutions are expected to look. Creating openness to the unconventional solution seems an insurmountable challenge. Here is an example that may help you.

My quest for solutions to complex challenges started around 1988 while I was working for a data centre. Management recognized that, with increasing complexity, we were losing the overview: With every change we made, and every problem we tried to solve, we were in danger of creating new problems. I was asked to investigate a solution.

At the time, we used a software tool for problem and change management. The tool worked well. It had an unused module and it looked the solution to our challenge was a matter of bringing the module in production. This…

View original post 495 more words

Fact or fabrication?:: Iran Attacks US Banks


The seal of the U.S. National Security Agency....

I am not anti-American nor am I given to looking for conspiracy theories BUT, wait a minute, what is that smell?

Can YOU smell it too? It smells like bullshit to me and “ticks so many boxes” that it looks like a lovingly crafted plot worthy of Hollywood. If you are a movie director or warmonger it wouldn’t work just quite so well if the alleged attacker were a non-Islamic country, particularly a powerful one like China, whose track record of cyber attacks on US isn’t great!

So here’s why I’m getting that whiff of BS.

The denial of service attacks now afflicting American banks are widely attributed to Iran. They’ve grown so serious that US banks have asked the National Security Agency for help.

via The Volokh Conspiracy » Iran Attacks US Banks; Privacy Groups Attack … NSA? Read more of this post

The Death of Taxes (or the End of Life as We Know It?) – Forbes


I can relate to the “desperation”  that is apparent in the Author’s tone!

Virtually any company I have seen, with just a little coaching and prodding, can increase their bottom line by at least a full percentage point.  Since most companies only make about 5% after tax, that one point is a 20% improvement.

And still they don’t react; they don’t change; and if they do, they do too little and only do it once.  But complexity is like weeds in a garden.  It keeps coming back again and again, and needs to be monitored, controlled and repeatedly removed.

Ironically, the systems that may fail first due to excessive complexity are not corporate systems.  They are the incredibly complex systems that we call “government.”

The Death of Taxes (or the End of Life as We Know It?) – Forbes.

Particularly in tough economic times, the opportunity to build better, more profitable and resilient enterprises, and economies, makes supreme sense. Read more of this post

Economics and the revolution in the field – LA Times.com


Might this explain the renewed interest in my previous blog “Complexity Economics”!?

modern economics has buried its head in detail but ignored the systematic character of capital flow, he claims, and it is time for a restore an understanding of how capital works

I hope so because, of late I keep coming back to the words of Dave Snowden: “Practice without sound theory does not scale”. Think about the implications for global commerce and the huge number of over-remunerated “experts” that populate, such as, the Financial Sector and you may begin to understand the reason for institutional intransigence in the face of well-founded criticism of theory, practice and culture.

Obviously, the global financial crisis brought the failures of the economics profession into stark relief. But there still hasn’t been a significant public movement of established professional economists away from orthodox theories. However, as the pernicious effects of instability and inequality become part of daily life, frustration with stale economic ideas is starting to turn into action — at least on the part of some.

So this is where economics finds itself today, stuck between failed methodologies and whispered realities. It can continue to produce elegant theorems that work only by ignoring obvious real-world situations and conditions. Or it can break free of its restrictions and apply its rigor to addressing society’s most intractable problems.

The choice is up to the economics establishment. But the revolution has begun.

via Economics and the revolution in the field – latimes.com.

This extract dates back to an article I wrote in 2010:

It is easy to challenge “conventional wisdom” based upon the facts but, as history shows us, change can be vehemently resisted when it comes up against entrenched “belief systems”…particularly when such change presents itself as a threat to those for whom power and wealth (individually and collectively) has derived from their “mastery” of the civilized world as we have come to recognise it.

“Insolvent insurers not a systemic risk”– Insurance Insight


Link to report

Well that is reassuring…isn’t it!?

I have (quickly) read through the report and, whilst it is hard to argue that, based upon past experience, Insurers and Re-insurers ARE of “systemic importance”*, several key points appear to be overlooked…or, perhaps ASSUMED. Probably not the best starting point for such a, potentially significant, report!

Here are a few of the issues that struck me as worthy of comment, or questions:

  • impact of sovereign/banking default or collapse [cascading] on Capital liquidity
  • the inter-connections amongst individual (micro) and institutional investors (macro)
  • lack of transparency in relation to “counter party” relationships          [ins – ins – rein – fin. mkt. – ins – rein, etc.]
  • insurers obtain adequate information to understand, accurately assess and rate risks*, that are,
  • mostly idiosyncratic and uncorrelated”, and
  • “insured loss events are not normally correlated with financial crises or economic cycles” [risk – “known”]
  • reserve and reserving adequacy
  • customer/insurer, etc. implement effective risk management – dampens rather than amplifies risk
  • there is no need to differentiate or adapt risk strategy for uncertainty [unseen – “unknown”]
  • “complexity” is NOT a source of “unseen” risk that, unmanaged, adds to uncertainty
  • major sources of risk are exogenous
  • failure or collapse are gradual, manageable and “top down”
  • Reputational or Operational risks are not  major threats…

Read more of this post