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How Britons forgot that history can hurt
September 19, 2019 | | Financial Times| by Simon Kuper.

Centuries of stability have created a country careless about risk... the British mainland has meandered along nicely since Newton’s death in 1727: no conquest, dictatorship, revolution, famine or civil war. The sea prevented invasions; coal made Britain the first industrialised power. Few Britons developed strong ideologies that they were motivated to kill for.

How to square this historical stability with the UK’s newfound instability?......What explains Britain’s transformation? I suspect it’s precisely the country’s historical stability that has made many of today’s Britons insouciant about risk. They have forgotten that history can hurt. Other countries remember....their citizens remember how countries can go horribly wrong (see Uganda, the French in Algeria, etc.)......Britain has no comparable traumas. Terrible things do happen there but chiefly to poor people — which is how the country is supposed to work. Even the losses suffered during two world wars have been reconfigured into proud national moments. The widespread American guilt about slavery is almost absent here.

And so, Britain has a uniquely untroubled relationship with its past, and a suspicion of anything new. No wonder the natural ruling party calls itself “Conservative”.

Britain’s ruling classes are especially nostalgic, because they live amid the glorious past: the family’s country home, then ancient public school, Oxbridge and Westminster. They felt Britain was so secure from constitutional outrages that they never bothered to write a constitution.

But it’s wrong to blame British insouciance (embodied by Johnson) on the elite. It extends across all classes. Most Britons have learnt to be politically unserious. Hence their tolerance for toy newspapers they know to be mendacious — Britons’ ironic relationship with their tabloids puzzles many foreigners.

Postwar Britons — the most shielded generation in this shielded country’s history — voted Brexit not out of fanaticism but in a spirit of “Why not?” Many Leave voters argued additionally that “Things can’t get worse”, which any Ugandan could have told them was mistaken. Some Leavers even seemed to crave a bit of history.
'30s  Argentina  Brexit  carelessness  complacency  constitutions  decay  false_sense_of_security  German  history  historical_amnesia  insouciance  ruling_classes  Simon_Kuper  social_classes  United_Kingdom  worrying 
september 2019 by jerryking
A Former CIA Executive’s Advice On How To Make Hard Decisions | The future of business
05.28.15 | Fast Company | BY STEPHANIE VOZZA.
A Former CIA Executive’s Advice On How To Make Hard Decisions
A five-step decision-making process from a man who spent 25 years making life-and-death decisions.
(1) Question
(2) Drivers
(3) Metrics
(4) Data
(5) What's Missing/Blind Spots

1. FIND THE REAL QUESTION
Questions are NOT self-evident, says Mudd. Focusing on better questions up front yields better answers later.
“Good questions are hard to come up with,” he says. Delay data gathering and the conclusions.... think about exactly what it is we want to know..... Start with what you’re trying to accomplish and work your way back, instead of moving forward and making conclusions. The right question provides a decision advantage to the person at the head of the table.

2. IDENTIFY YOUR “DRIVERS”
Break down complex questions into characteristics or “drivers.” This approach gives you a way to manage data.
For example, sort data on Al Qaeda into information baskets that included money, recruits, leadership, communications, training, and access to weapons. When information flows in, rather than adding it to one unmanageable pile, sorting through it periodically, and offering a recitation of what appears to be relevant from the most recent stuff you’ve seen, file each bit into one of your baskets. Limit your drivers to 10.

3. DECIDE ON YOUR METRICS
Identify the metrics you’ll use to measure how the problem and solution are evolving over time.
What are the right metrics?
What are the new information sources and metrics?
Compare your thought process to the training process of an Olympic sprinter who measures success in hundredths of a second. “If we don’t, the analysis we provide will suffer the same fate as a sprinter who thinks he’s great but has never owned a stopwatch: he enters an elite competition, and reality intervenes,” Metrics provide a “mind mirror”–a system for judging your decisions. It provides a foundation for coming back to the table and assessing the process for success.

4. COLLECT THE DATA
Once you’ve built the framework that will help you make the hard decision, it’s time to gather the data. Overcome data overload by plugging data into their driver categories and excising anything that doesn’t fit. “Too much data might provide a false sense of security, and it doesn’t necessarily lead to clearer analytic decision making,”

Avoud intuition. It’s dangerous. Aggressively question the validity of your data. Once you have your data sorted, give yourself a grade that represents your confidence in assessing your question.

5. LOOK FOR WHAT’S MISSING
Complex analysis isn’t easy. Assume that the process is flawed and check for gaps and errors. Three common stumbling blocks are:

Availability bias: The instinct to rely on what you know or what has been most recently in the news.
Halo effect: When you write off the negative characteristics because you’re mesmerized by the positive attributes.
Intuitive versus analytic methodologies: when you go with your gut. Relying on intuition is dangerous.

Mudd says making complex decisions is hard work. “It’s a lot of fun to be an expert who bases their ideas on history and not a lot of fun to be an analyst who must always be assessing potential scenarios,” he says. “Every time you go into a problem, and before you rip into data, ask yourself, ‘Am I sure where I’m heading?’”
asking_the_right_questions  availability_bias  biases  decision_making  false_sense_of_security  gut_feelings  halo_effects  hard_choices  intuition  intelligence_analysts  life-and-death  metrics  Philip_Mudd  problem_definition  organizing_data  problem_framing  sorting  thinking_backwards 
october 2017 by jerryking
African Guyanese leaders must be much more development oriented
November 20, 2007 | Stabroek News | by Lin-Jay Harry-Voglezon.

Cheddi Jagan said around 1990, that the PNC government was preparing the Afro community to fail. He meant the high concentration of Afro Guyanese in the bloated public service sector which was unsustainable, and the practice of giving them opportunities on the basis of party cards, as a way of up-keeping the government, would backfire on the community. He meant that when the system of things changed the community would be uncompetitive for it would by then have nurtured the wrong ethics, expectations, and attitudes. The psyche of dependency on the state would be so ingrained that it would fail to be as resourceful as it is ought to be and was capable of being........I have argued in the past that the Afro community, owing to its historical conditions of survival, had crystallised a false sense of importance and security under PNC governance. I indicated that it is not a government of black faces, PNC or otherwise that would transform the Afro communities, but transformation in cultural ideas and economic groundings, which could be induced through changed conditions of survival and an improved understanding of self. Of all Afro leaders, Walter Rodney was best trained and equipped to lead that transformation. His death was a tremendous loss.

This additional response to Osafo Modibo’s letters is that the problems at Buxton are fundamentally symptomatic of cultural and economic deficiencies. While Modibo accuses myself and others of being silent on the extremities in that village he fails to acknowledge that the very executors of the excesses are mainly Afro Guyanese. The Afro community should realise that the highest form of emancipation would be when every black child grows up with the doctrine that he must be black, honourable and economically creative. So whether he is poor, rich, or an officer of state he must never pawn his common sense and dignity to others.
letters_to_the_editor  economic_development  Afro-Guyanese  ethnic_communities  entrepreneurship  mindsets  generational_wealth  public_sector  psyche_of_dependency  human_psyche  Cheddi_Jagan  cultural_values  false_sense_of_security  uncompetitive  PNC  Walter_Rodney 
september 2013 by jerryking
How to be wise before the event
March 9 2009 | Financial Times | By Stefan Stern.

Restraint is back in fashion in these recessionary times. People have lost their appetite for risk.

But hang on a minute. No risk will mean no reward. You need new markets and customers to grow, and that means taking steps into the unknown. I doubt that anyone will be suggesting, in this newspaper’s new series of articles on the future of capitalism, that risk-taking should be abolished.

Bad risk-management helped get us into the current mess. It is vital that we learn the right lessons about risk from the crisis. What are they?

The new edition of Harvard Business Review contains a lucid piece of analysis from René Stulz, professor of banking and monetary economics at Ohio State University’s Fisher College of Business. While his principal focus is on the financial sector, the diagnosis will be helpful to managers in any business or organisation.

Prof Stulz describes six ways in which risk has been mismanaged. First, there has been too much reliance on historical data among today’s decision-makers. Extrapolating from the past can provide, at best, only partial guidance for the future. Financial innovation has created a new world. No wonder some managers were unprepared for the calamitous fall in asset prices and demand. This collapse was unimaginable to anyone basing their thinking on post-war performance alone.

Second, narrow daily measures – in banking these are known as “value at risk” measures – have underestimated the risks that are being run. The assumption behind a daily measure of risk is that action can be taken quickly (through an asset sale) to remove that risk. But, as the current crisis has shown, such rapid moves become impossible when markets seize up.

Third, knowable risks have been overlooked. Managers who work in silos may appreciate the risks that they personally are exposed to. But they may not see how risks being run elsewhere in the business could affect them too. Someone – a chief risk officer? – needs to track them all.

Fourth, concealed risks have been overlooked. Incentives have proved to be particularly dangerous in this regard. Some traders and lenders may have enjoyed taking risky decisions that in the short term appeared to be delivering well for them and their organisations. But they had no incentive to report any downside risk. And unreported risks tend to expand.

Fifth, there has been a failure to communicate effectively. It is dangerous, Prof Stulz says, when risk managers are so expert in their field that they lose the ability to explain in simple terms what they are doing. The board may develop a false sense of security by failing to appreciate the complexity of the risks being managed.

Last, risks have not been managed in real time. Organisations have to be able to monitor fast-changing markets and where necessary respond to them without delay.

Prof Stulz offers a useful technical analysis. But a true understanding of risk also requires a maturity of outlook, an ability to see the big picture, and deep experience. This last is a rare commodity: impossible to fake and acquired only over time.

In a new McKinsey publication called What Matters, the 90-year-old investment manager and author Peter Bernstein offers some sober insights. “What is risk management all about anyway?” he writes. “We use the words as though everybody understands what we are talking about. But life is not that simple. Risk means more things can happen than will happen – which is a fancy way of saying we do not know what is going to happen.”

Mr Bernstein’s central point – not revolutionary, but unarguable – is that downside risks must be assessed rigorously. Someone old enough to remember the Wall Street crash is probably worth listening to right now.[JCK: elder wisdom]

“Nothing is 100 per cent sure,” Mr Bernstein says. “While a 95 per cent probability is statistically significant, that still leaves us in the dark about the remaining 5 per cent; we may decide to accept that uncertainty and bet on the 95 per cent sure thing, but there is still a possibility of being wrong.

“The crucial question to ask is, ‘What would be the consequence if that 5 per cent chance comes to pass?’ ”

Welcome to the less exciting but more soundly based era of calculated risks. For the foreseeable future, business leaders will be trying to be wise before rather than after the event.
beforemath  business  communicating_risks  downside_risks  elder_wisdom  false_sense_of_security  fast-changing  financial_innovation  hidden  historical_data  management  McKinsey  overreliance  Peter_Bernstein  recessions  real-time  risks  risk-assessment  risk-management  Stefan_Stern  the_big_picture  VaR  what_really_matters  wisdom 
may 2009 by jerryking

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