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Opinion | The United Kingdom Has Gone Mad - The New York Times
By Thomas L. Friedman
Opinion Columnist

April 2, 2019

What do the most effective leaders today have in common? They wake up every morning and ask themselves the same questions: “What world am I living in? What are the biggest trends in this world? And how do I educate my citizens about this world and align my policies so more of my people can get the best out of these trends and cushion the worst?”

So what world are we living in?

(1) We’re living in a world that is becoming so interconnected — thanks to digitization, the internet, broadband, mobile devices, the cloud and soon-to-be 5G wireless transmissions — that we are becoming interdependent to an unprecedented degree. In this world, growth increasingly depends on the ability of yourself, your community, your town, your factory, your school and your country to be connected to more and more of the flows of knowledge and investment — and not just rely on stocks of stuff........The key to creating economic value has been to acquire some proprietary knowledge stocks, aggressively protect those knowledge stocks and then efficiently extract the economic value from those knowledge stocks and deliver them to the market. The challenge in a more rapidly changing world is that knowledge stocks depreciate at an accelerating rate. In this kind of world, the key source of economic value shifts from stocks to flows......yet Britain is ruled today by a party that wants to disconnect from a connected world....
(2) Understand that in a world of simultaneous accelerations in technology and globalization, keeping your country as open as possible to as many flows as possible is advantageous for two reasons: You get all the change signals first and have to respond to them and you attract the most high-I.Q. risk-takers, who tend to be the people who start or advance new companies.....The best talent wants to go to the most open systems — open both to immigrants and trade — because that is where the most opportunities are. Britain is about to put up a big sign: GO AWAY.
(3) wise leaders also understand that all the big problems today are global problems, and they have only global solutions: climate change, trade rules, technology standards and preventing excesses and contagion in financial markets......small states/middle powers need to be part of a wider coalition like the European Union.
(4) the best leaders know a little history. Trump is fine with a world of competitive European nationalisms, not a strong European Union. So is Vladimir Putin. So, it seems, are the Brexiteers. How quickly they’ve all forgotten that the E.U. and NATO were built to prevent the very competitive nationalism that ran riot in Europe in the 20th century and brought us two world wars.
accelerated_lifecycles  Brexit  Tom_Friedman  United_Kingdom  21st._century  EU  historical_amnesia  history  information_flows  interconnections  middle-powers  proprietary  questions  small_states  interdependence  talent_flows  technical_standards  open_borders 
april 2019 by jerryking
CIBC’s Victor Dodig warns about global debt levels; urges Canada to prepare

Who/Where/Occasion: CIBC's CEO Victor Dodig, in a speech to the Empire Club

* alarm over rising global debt levels, warning that Canada needs to start preparing now for the next economic shock.
* some of the most acute threats to the global economy are beyond this country’s control, but cautioned Canadians not to get too comfortable while times are good.
* developing problems could ripple through interwoven financial markets around the world.
* “It sounds counterintuitive, but that same debt that helped the world recover is actually infusing risk into the global financial system today," ...“I think there’s a real serious global challenge of this low-interest-rate party developing a big hangover."

* clarify rules around foreign direct investment, which is falling in Canada. The main culprit is the uncertainty plaguing large business deals that require approval from Ottawa under opaque foreign-investment rules – and he cites the turmoil surrounding the Trans Mountain pipeline expansion as an example.
* more immigration to Canada, asking the government – which has already set higher immigration targets for the coming years – to open its arms even wider.
* governments and employers to work more closely with universities and colleges to match the skills graduates have to employers' needs, promoting what are known as the STEM disciplines – science, technology, engineering and math – as well as skilled trades.
* remove interprovincial trade barriers.
* allow companies to expense capital investments within one year to be more competitive with U.S. rules.

My Takeaways:
CEOs  CIBC  debt  FDI  global_economy  interconnections  interest_rates  opacity  pipelines  resilience  speeches  uncertainty  Victor_Dodig  war_for_talent  threats  beyond_one's_control  complacency  preparation  financial_system  readiness 
september 2018 by jerryking
The best way to solve a problem is to wait a while
May 25, 2018 | Financial Times Tim Harford YESTERDAY.

The world is full of risks. Can anyone guarantee that over the next 300 years both the UK trust fund and country will survive asteroid strikes, thermonuclear war or a deliberately engineered pandemic?

Perhaps we are getting ahead of ourselves. The imminent threat to the trust fund is the British government itself, which has decided that a tiny advantage is worth seizing now, since the costs will fall to someone else. (You may supply your own analogy at this point.)

All democratically elected governments struggle to see past the next election, but this one struggles to see past next Tuesday. In fairness, it often feels as if the next election may come sooner than that. And it is hard to take a truly long-term perspective, whether contemplating the future of human life or the prospect of cheesecake.

As long as the [UK] debt stays roughly in proportion to national income — not an outrageous assumption — then the trust fund would be sufficient to pay off the debt a mere four centuries after the original bequest

The Astronomer Royal Sir Martin Rees wrote a book titled Our Final Century, warning of the existential threats arising from complex, interconnected modern systems. The book was renamed Our Final Hour in the US, perhaps because a century seemed like too much time to kill.

Economists and moral philosophers argue among themselves over how to account for the interests of future generations. The answer is far from obvious. It turns out to be crucial in pondering a rational response to slow-burning disasters such as climate change — assuming that anyone cares about a rational response, which seems a forlorn hope.
problem_solving  Tim_Harford  long-term  books  disasters  slowly_moving  short-sightedness  imperceptible_threats  existential  interconnections 
may 2018 by jerryking
Folks, We’re Home Alone
SEPT. 27, 2017 | The New York Times | Thomas L. Friedman.

we’re going through three climate changes at once:

We’re going through a change in the actual climate — disruptive, destructive weather events are steadily on the rise.

We’re going through a change in the “climate” of globalization — going from an interconnected world to an interdependent one, from a world of walls where you build your wealth by hoarding the most resources to a world of webs where you build your wealth by having the most connections to the flow of ideas, networks, innovators and entrepreneurs. In this interdependent world, connectivity leads to prosperity and isolation leads to poverty. We got rich by being “America Connected” not “America First.”

Finally, we’re going through a change in the “climate” of technology and work. We’re moving into a world where computers and algorithms can analyze (reveal previously hidden patterns); optimize (tell a plane which altitude to fly each mile to get the best fuel efficiency); prophesize (tell you when your elevator will break or what your customer is likely to buy); customize (tailor any product or service for you alone); and digitize and automatize more and more products and services. Any company that doesn’t deploy all six elements will struggle, and this is changing every job and industry.

What do you need when the climate changes? Adaptation — so your citizens can get the most out of these climate changes and cushion the worst. Adaptation has to happen at the individual, community and national levels.

At the individual level, the single most important adaptation is to become a lifelong learner, so you can constantly add value beyond what machines and algorithms can do.

“When work was predictable and the change rate was relatively constant, preparation for work merely required the codification and transfer of existing knowledge and predetermined skills to create a stable and deployable work force,” explains education consultant Heather McGowan. “Now that the velocity of change has accelerated, due to a combination of exponential growth in technology and globalization, learning can no longer be a set dose of education consumed in the first third of one’s life.” In this age of accelerations, “the new killer skill set is an agile mind-set that values learning over knowing.”
GOP  Democrats  Donald_Trump  Tom_Friedman  climate_change  adaptability  extreme_weather_events  Dean_Acheson  weather  interconnections  interdependence  data_driven  wealth_creation  life_long_learning  the_single_most_important 
september 2017 by jerryking
Keeping America's Edge
Winter 2010 | National Affairs | Jim Manzi.

.....One of the most painful things about markets is that they often make fools of our fathers: Sharp operators with an eye for trends often outperform those who carefully learn a trade and continue a tradition. ...First, To begin with, we must unwind some recent errors that fail to take account of these circumstances. Most obviously, government ownership of industrial assets is almost a guarantee that the painful decisions required for international competitiveness will not be made. When it comes to the auto industry, for instance, we need to take the loss and move on. As soon as possible, the government should announce a structured program to sell off the equity it holds in GM. ....Second, the financial crisis has demonstrated obvious systemic problems of poor regulation and under-regulation of some aspects of the financial sector that must be addressed — though for at least a decade prior to the crisis, over-regulation, lawsuits, and aggressive government prosecution seriously damaged the competitiveness of other parts of America's financial system ........Regulation to avoid systemic risk must therefore proceed from a clear understanding of its causes. In the recent crisis, the reason the government has been forced to prop up financial institutions isn't that they are too big to fail, but rather that they are too interconnected to fail......we should therefore adopt a modernized version of a New Deal-era ­innovation: focus on creating walls that contain busts, rather than on applying brakes that hold back the entire system.....Third, over the coming decades, we should seek to deregulate public schools. .....We should pursue the creation of a real marketplace among ever more deregulated publicly financed schools — a market in which funding follows students, and far broader discretion is permitted to those who actually teach and manage in our schools. There are real-world examples of such systems that work well today — both Sweden and the Netherlands, for instance, have implemented this kind of plan at the national level......Fourth, we should reconceptualize immigration as recruiting. Assimilating immigrants is a demonstrated core capability of America's political economy — and it is one we should take advantage of. ....think of immigration as an opportunity to improve our stock of human capital. Once we have re-established control of our southern border, and as we preserve our commitment to political asylum, we should also set up recruiting offices looking for the best possible talent everywhere: from Mexico City to Beijing to Helsinki to Calcutta. Australia and Canada have demonstrated the practicality of skills-based immigration policies for many years. We should improve upon their example by using testing and other methods to apply a basic tenet of all human capital-intensive organizations managing for the long term: Always pick talent over skill. It would be great for America as a whole to have, say, 500,000 smart, motivated people move here each year with the intention of becoming citizens.
social_cohesion  innovation  human_capital  Jim_Manzi  immigration  recruiting  interconnections  too_big_to_fail  economic_downturn  innovation_policies  outperformance  capitalization  human_potential  financial_system  regulation  under-regulation  too_interconnected_to_fail  systemic_risks  talent  skills 
august 2017 by jerryking
Beware of linearity: The shortest distance to your future may not be a straight line - The Globe and Mail
Special to The Globe and Mail
Published Friday, Dec. 09, 2016

linearity – dominates our thinking as we tackle problems. “Western thinkers are so habituated to thinking in terms of linear models that we allow them to inform not just what we think, but the fundamentals of how we think....Linearity is a critical and – apparently – inherent part of our cultural DNA....It’s not easy to forsake’s essential to guard against slavishly following its tantalizing direction. Start by reading trade journals from another industry or studying a topic you have no interest in. Look for the less obvious interconnections around you. Think like a songwriter: Choruses and bridges signal a break with the preceding verse or the patterns that come before. But a true bridge, unlike a chorus, never repeats. They urge you to look for bridge moments rather than assume past is prologue.
Leaders are supposed to tell people the truth rather than what they want to hear. But fact checkers found Mr. Trump consistently at odds with the truth. And his supporters didn’t seem to care, assuming leaders lie anyway. TV host Stephen Colbert used the term “truthiness” to cover believing something that feels true even if it isn’t supported by fact. Says Fowler: “I wonder if truth-telling matters when people are interested in bigger issues?”
One of the highly touted productivity approaches is to tackle your most important thing (MIT) at the start of the day. Get it done before the chaos of the day overwhelms you.

But productivity writer Cal Newport, a Georgetown University computer science professor, feels the approach is insufficient – calling it “amateur ball” while the professionals play a more textured game.

The problem is that it implicitly concedes that most of your day is out of your control. But someone who plans every minute of their day and every day of their week will inevitably accomplish far more high-value work than someone who identifies only a single daily objective. The key, he feels, is to put enough buffers in your day to handle the unplanned stuff that hits you. With those slices of times and a spirit of adaptability you will find your work life not as unpredictable as you assume.
early_risers  linearity  Harvey_Schachter  thinking  humility  Donald_Trump  unplanned  unforeseen  buffering  GTD  productivity  discontinuities  nonlinear_systems  randomness  interconnections  Jim_Collins  truthiness  truth-telling  slack_time  adaptability  overwhelmed  time-management  unexpected  Cal_Newport  straight-lines  bridging  non-obvious 
december 2016 by jerryking
Peter's Principles, Market Research and Forecasting Article |
Excerpts and thoughts on "Adventures of a Bystander"

Drucker looks for simplicity but likes to convey complexity. He loves simplicity but realizes that getting there means making connections: to the past, to related fields. He answers questions by trotting through history, art, science. Listening to him, you learn not just the answer but also how to make connections between disparate subjects and thus deepen your understanding. It makes you, the listener, more valuable as an adviser and teacher.

History is Drucker's primary tool for complexifying. "I'm not a professional historian," he says, "but I've learned that nothing helps me as much in my work as a little bit of historical knowledge about a country, technology, or industry. Every few years I pick another major topic and read in it for three years. It's not long enough to make me an expert, but it's long enough to understand what the field is all about. I've been doing this for 60 years."
Peter_Drucker  advice  simplicity  complexity  consigliere  history  interconnections  connecting_the_dots  contextual  industry_expertise 
april 2015 by jerryking
Intellectual maestro craves connections as NACO’s music director - The Globe and Mail
The Globe and Mail
Published Friday, Feb. 27 2015,

The energetic Englishman’s conversation, during a short visit to Toronto, is full of the language of linkage and cross-reference. Just about everything good can be made better, in his view, if the connections between things, people and ideas are stronger... if classical music isn’t reaching parts of the population, he says, it’s because those who perform aren’t doing enough to make links between the music, its history and the way we live today. “I only really connect to a piece of music when I read around it, I mean the broad social context.”

Connecting dots is a familiar theme in the arts and in arts promotion these days, but Shelley is quite willing to chase it into the corners, as they say in hockey. ....tell a compelling story which helps to solve a problem (Daniel Doctoroff--Bloomberg's guy)
music  Communicating_&_Connecting  Ottawa  cultural_institutions  connecting_the_dots  artists  orchestras_&_symphonies  classical_music  CEOs  sense-making  contextual  cross-pollination  interconnections 
march 2015 by jerryking
Ebola isn’t the big threat. That’s still to come - The Globe and Mail
The Globe and Mail
Published Tuesday, Dec. 30 2014

What has helped rein in Ebola is good, old-fashioned infection-control measures pioneered by the likes of Florence Nightingale and James Lister, and gumshoe epidemiological work à la John Snow.

All these approaches date back to the 19th century, but they remain the backbone of tackling outbreaks of infectious disease, especially those like Ebola that spread principally in the health-care setting.

Just as importantly, all these tactics are local and hands-on, with Ebola reminding us that: 1) good public health must be community-based; 2) public-health measures are only effective if there is buy-in from health-care practitioners and the public alike and; 3) for that to occur, good communication is paramount....Ebola is a problem that is solvable. This outbreak actually can be snuffed out. It would be irresponsible to fail to do so and to allow Ebola to gain a more permanent foothold. The difficulties faced in controlling what should be – at least on paper – a relatively easy-to-control outbreak is humbling. It’s also a grim reminder that we’re still not ready for a pandemic that actually is a global threat.

Much work remains to be done in preparedness, education and, above all, in recognizing that in our interconnected world, there is no such thing as a distant threat any more.
threats  public_health  Ebola  flu_outbreaks  André_Picard  interconnections  pathogens  pandemics  19th_century  community-based 
december 2014 by jerryking
Nathan Wolfe: No More Ebola Whac-A-Mole - WSJ - WSJ
Oct. 13, 2014 7:04

Ebola is not the first virus to threaten the world, and it won’t be the last. Stopping the current epidemic is vital, but the world can’t afford to go to sleep after it is stopped. Unless we prepare for the next epidemic, we will find ourselves forever nailing down outbreaks just in time to see the next ones pop up.
disease_surveillance  Ebola  pandemics  interconnections  zoonotic  flu_outbreaks  epidemics  Congo  viruses  disease  surveillance  preparation  disaster_preparedness 
october 2014 by jerryking
Are we witnessing a comeback of the Stars and Stripes? - The Globe and Mail
Special to The Globe and Mail
Published Friday, Sep. 26 2014

America’s retreat was the central question. Had the superpower become a super-bystander? Or had the President just lost interest, energy and credibility to do more than moralize?...Mr. Obama has drawn instead on what he calls “progressive pragmatism,” which his aides claim is his nature, relying on an informal network of networks, ad hoc groups of nations taking on the challenges of the day. Some of them champion liberal values. Some are partners of convenience. Exhibit A: the coalition of willing Arab states in this week’s air strikes. Exhibit B: the network of health agencies and charities operating with U.S. support in ebola-stricken West Africa....On the grander issues of his age – climate change, cyber-security, the financial imbalance between America and Asia – Mr. Obama will need ad hoc networks like never before. The 2008 financial crisis was mitigated by a small group of central bankers, commercial bankers, regulators and finance ministers, supported but not directed by the United States. A president who is not renowned for building private-sector trust, or the loyalty of other nations, may be challenged to do that again. He also needs what America has lacked of late – for its allies to do more. Canada’s approach to carbon emissions is the sort of passive resistance the U.S. has encountered from India on trade, Mexico on immigration and Turkey on Syria. Under Mr. Obama, everyone has loved to complain about Washington, but few have been willing to shoulder their share of the costs.

Skeptics believe this is no longer possible – the world has too many strong voices, too many competing interests, too much of what physicists call entropy, the thermodynamic condition that degenerates order into chaos.
America_in_Decline?  bouncing_back  U.S.foreign_policy  multipolarity  Obama  John_Stackhouse  G20  UN  NATO  Iran  Ukraine  geopolitics  complexity  networks  interconnections  instability  superpowers  indispensable  disequilibriums  ad_hoc  nobystanders  entropy  imbalances 
september 2014 by jerryking
Aiming Financial Weapons From Treasury War Room -

“The United States needs to remain involved in the world, but does not necessarily need to remain involved just through military power,” said David S. Cohen, Treasury’s under secretary for terrorism and financial intelligence, who is sometimes described within the administration as President Obama’s favorite combatant commander. “There are other ways of projecting U.S. power that are consequential.”

Mr. Cohen oversees the obscure Office of Foreign Assets Control, the engine that creates and administers the steadily increasing number of financial sanctions. They are a policy tool once considered largely ineffectual but are now used against a wide range of actors, from Iran’s revolutionary guard to Mexican drug traffickers to cronies of President Vladimir V. Putin of Russia....Sanctions have also become a central policy lever with Iran, Syria, South Sudan and North Korea — as well as drug cartels, arms traders and terrorists. In no small part, their swelling number is because of their improved potency, analysts said: Today’s sanctions tend to be “smart,” narrow rather than broad, and designed to pressure elites rather than squeezing average citizens....Legal changes during the Bill Clinton and George W. Bush administrations bolstered the tool. Analysts started focusing on travel bans and asset freezes, rather than whole-country or whole-industry sanctions. The interconnectedness of the global economy has also made sanctions stronger.

“We’re very nuanced about how to use the tool and, I think, very thoughtful about it,”
Iran  geopolitics  U.S.Treasury_Department  statecraft  21st._century  travel_bans  asset_freezes  sanctions  North_Korea  interconnections  economic_warfare  economic_policy  specificity  hard_power  rogue_actors  policy_tools  potency  global_economy 
june 2014 by jerryking
The need for an analytical approach to life
November 3, 2013 | | By Rebecca Knight.

Risk analysis is not about predicting events; it’s about understanding the probability of possible scenarios, according to Elisabeth Paté-Cornell, professor at the Stanford School of Engineering.
In her latest research, she argues that expressions such as “black swan” and “perfect storm”, which have become journalistic shorthand when describing catastrophes, are just excuses for poor planning. Managers, should “think like engineers” and take a systematic approach to risk analysis. They should figure out how a system works and then identify the probable ways in which it could fail.
So does a black swan event exist?
The only one that I can think of is the Aids epidemic. In the case of a true black swan, you cannot anticipate it.
And what about ‘perfect storms’?
A combination of rare events is often referred to as a perfect storm. I think people underestimate the probability of them because they wrongly assume that the elements of a perfect storm are independent. If something happened in the past – even though it may not have happened at the same time as something else – it is likely to happen again in the future.
Why should managers take an engineering approach to analysing the probability of perfect storms?
Engineering risk analysts think in terms of systems – their functional components and their dependencies. If you’re in charge of risk management for your business, you need to see the interdependencies of any of the risks you’re managing: how the markets that you operate in are interrelated, for example.
You also need imagination. Several bad things can happen at once. Some of these are human errors and once you make a mistake, others are more likely to happen. This is because of the sequence of human error. When something bad happens or you make a mistake, you get distracted which means you’re more likely to make another mistake, which could lead to another bad event. When you make an error, stop and think. Anticipate and protect yourself.
How can you compute the likelihood of human error?
There are lots of ways to use systems analysis to calculate the probability of human error. Human errors are often rooted in the way an organisation is managed: either people are not skilled enough to do their jobs well; they do not have enough information; or they have the wrong incentives. If you’re paid for maximum production you’re going to take risks.
So in the case of a financial company I’d say monitor your traders, and maybe especially those that make a lot of money. There are a lot of ways you can make a lot of money: skill, luck, or through imprudent choices that sooner or later are going to catch up with you.
So you can do risk analysis even without reliable statistics?
We generally do a system-based risk analysis because we do not have reliable statistics. The goal is to look ahead and use the information we have to assess the chances that things might go wrong.
The upshot is that business schools ought to do a better job of teaching MBAs about probability.
“Numbers make intangibles tangible,” said Jonah Lehrer, a journalist and
author of “How We Decide,” (Houghton Mifflin Harcourt, 2009). “They
give the illusion of control. [Add "sense of control" to tags]
engineering  sense_of_control  black_swan  warning_signs  9/11  HIV  Aids  business_schools  MBAs  attitudes  interconnections  interdependence  mindsets  Stanford  imagination  systems_thinking  anticipating  probabilities  pretense_of_knowledge  risk-management  thinking_tragically  complexity  catastrophes  shorthand  incentives  quantified_self  multiple_stressors  compounded  human_errors  risks  risk-analysis  synchronicity  cumulative  self-protection  systematic_approaches 
november 2013 by jerryking
When Complexity Is Free -
September 14, 2013 | NYT | By THOMAS L. FRIEDMAN.
(Charles Waud & WaudWare)
When everything and everyone becomes connected, and complexity is free and innovation is both dirt-cheap and can come from anywhere, the world of work changes.
Tom_Friedman  GE  Industrial_Internet  interconnections  massive_data_sets  crowdsourcing  business_models  complexity  3-D  contests  prognostics  innovation 
september 2013 by jerryking
In ‘Treasury’s War,’ Missiles for a Financial Battlefield -
August 31, 2013 | NYT | By BRYAN BURROUGH.

THE 21st century has ushered in new kinds of warfare that don’t involve soldiers wielding weapons. One type, cyberwarfare, seems to have drawn the most commentary and analysis. A less publicized type of attack, financial warfare, is covered in “Treasury’s War,” a useful new book by one of this strategy’s architects, Juan C. Zarate, a former assistant Treasury secretary. ... “Treasury’s War” chronicles an array of the department’s enforcement efforts, from corralling informal Middle Eastern money-transfer networks useful to Al Qaeda to tracking Saddam’s missing millions. But the heart of the book is the emergence and evolution of Section 311 of the Patriot Act, which allows the Treasury Department to designate any bank in the world as a “primary money-laundering concern” and prevent it from doing business with any American bank.

In today’s financial world, where every bank wants to do business with every other bank, and where New York and the United States dollar remain of paramount importance, “hitting” a bank with a Section 311 order has the effect of transforming it into an overnight pariah. Mr. Zarate cites example after example in which 311’s have all but destroyed rogue banks that had been important conduits for money flows involving, for example, Al Qaeda or Iran....“Geopolitics is now a game best played with financial and commercial weapons,” Mr. Zarate writes. “The new geoeconomic game may be more efficient and subtle than past geopolitical competitions, but it is no less ruthless and destructive.”
books  book_reviews  Iran  al_Qaeda  geopolitics  U.S.Treasury_Department  statecraft  money_laundering  21st._century  interconnections  sanctions  economic_warfare  economic_policy  banks  policy_tools 
september 2013 by jerryking
The Messy Business of Management
By Ian I. Mitroff, Can M. Alpaslan and Richard O. Mason

September 18, 2012| |

“Managers don’t solve simple, isolated problems; they manage messes.” Ackoff was also instrumental in defining the nature of such messes. According to him, a mess is a system of constantly changing, highly interconnected problems, none of which is independent of the other problems that constitute the entire mess. As a result, no problem that is part of a mess can be defined and solved independently of the other problems. Accordingly, the ability to manage messes requires the ability to think and to manage systemically; this in turn requires that one understand systems thinking. addressing complex, messy problems also requires constructive conflict and structured debate with others to help test one’s assumptions — and help ensure that one is not solving the wrong problem. Many business schools excel at teaching young managers well-structured models, theories and frameworks. But we believe that business schools should spend more time helping their students surface, debate and test the assumptions underlying each model, theory or framework they are learning about. In this way, by developing students’ critical thinking skills, universities would prepare young business leaders to succeed in a messy, uncertain world.
critical_thinking  crisis  business_schools  constant_change  uncertainty  management  systems_thinking  complexity  networks  interconnections  problem_solving  messiness  assumptions 
january 2013 by jerryking
Taking Risk To the Marketplace
March 6, 2000 | Fortune Magazine | By Thomas A. Stewart.

* "You should always value the ability to move and change, because that creates options, and options are valuable,"
* Traditional risk management, with its emphasis on real property and financial events, isn't enough for knowledge companies, whose big risks are intellectual assets, such as brand equity, human capital, innovation, and their network of relationships.
* you have to know what's at risk-- which isn't always easy for intangible assets.
* Each intangible asset has a different risk profile.
*Thinking like a portfolio manager works for risk management as well as for strategy, says Bruce Pasternak, head of the strategic leadership practice at Booz Allen & Hamilton. In either case, adaptability is a cardinal virtue; the top goal is organizational flexibility. All-or-nothing bets like insurance have limited use in protecting cash flows from intangibles because their value is so uncertain, says Anjana Bhattacharee, director of Aporia, a British startup developing tools to manage those risks. Hedging also has problems. Says Bjarni Armannsson, head of the Icelandic Investment Bank in Reykjavik: "It's difficult to find a counterparty for intellectual risks." To hedge against falling gas prices, Enron can sell the risk to someone who fears rising prices, like a utility, but how do you hedge against a loss of expertise or brand equity

* Markets are full of risk, but it turns out that they're a lot safer than rigid structures. Intellectual assets and operations obey no one's command and are subject to discontinuous--i.e., quantum--change. There are four ways to respond to risk: Avoid it, reduce it, transfer it, or accept it. The one thing you can't do, if it's intellectual risk, is tie it up and subdue it.
Thomas_Stewart  risks  risk-management  organizational_flexibility  adaptability  binary_decisionmaking  intellectual_risks  human_capital  insurance  intellectual_assets  brand_equity  intangibles  networks  interconnections  discontinuities  expertise  portfolios  options  portfolio_management  cash_flows  generating_strategic_options  optionality  brittle  antifragility  step_change  counterparties  network_risk 
december 2012 by jerryking
It’s Mitt’s World -
September 4, 2012 | NYT | By THOMAS L. FRIEDMAN.

Since the end of the cold war, the world has become not just more interconnected but more interdependent, and this new structural reality requires a new kind of American leadership. Why?

In this increasingly interdependent world, your “allies” can hurt you as much as your “enemies.” After all, the biggest threats to President Obama’s re-election are whether little Greece pulls out of the euro zone and triggers a global economic meltdown or whether Israel attacks Iran and does the same.

In this increasingly interdependent world, your rivals can threaten you as much by collapsing as by rising. Think of what would happen to U.S. markets and jobs if China’s growth slowed to a crawl and there was internal instability there?

In this increasingly interdependent world, we have few pure “enemies” anymore: Iran, North Korea, Cuba, Al Qaeda, the Taliban. But we have many “frenemies,” or half friends/half foes. While the Pentagon worries about a war with China, the Commerce Department is trying to get China to buy more Boeing planes and every American university worth its salt is opening a campus in Beijing; meanwhile, the Chinese are investing in American companies left and right. President Hugo Chávez of Venezuela is the biggest thorn in America’s side in Latin America and a vital source of our imported oil. The U.S. and Russia are on opposing sides in Syria, but the U.S. supported Russia joining the World Trade Organization and American businesses are lobbying Congress to lift cold war trade restrictions on Russia so they can take advantage of its more open market....The best way for an American president to forge healthy interdependencies is, first, to get our own house in order and gain the leverage — in terms of resources and moral authority — that come from leading by example. For instance, Romney is right: there are unhealthy aspects to the U.S.-China interdependency that need working on, but they are not all China’s fault. We would have more leverage to build a more healthy relationship if we saved more, consumed less, studied harder and got our own banks to behave less recklessly.
Mitt_Romney  U.S.foreign_policy  interdependence  leadership  leverage  interconnections  networks  vulnerabilities  frenemies  Tom_Friedman 
september 2012 by jerryking
To risk or not to risk? Where (and when) should be the question
Sep 3, 2007 |The Globe and Mail pg. B.6 | Daniel F. Muzyka, Glen Donaldson

First, risk can sometimes be asymmetric: bad news being more "bad" than good news is "good". For example, while a business project that goes particularly well might deliver slightly ahead of expectations, a bad project that goes off the rails may far exceed its time and budget...Second, risk is often interconnected: the knee-bone is connected to the shin-bone is connected to the foot-bone.
...Third, risks can be multiplicative, with a series of small risks combining to produce large outcomes....The good news is that advancements in risk management can help produce insight and can deal with some of the risks. One can consider four steps to managing risk: identification, measurement, mitigation, and monitoring.
ProQuest  Daniel_Muzyka  risk-management  insights  large_payoffs  measurements  compounded  interconnections  risk-mitigation  multiplicative  risks  network_risk  asymmetrical  cumulative  risk-assessment  bad_news 
october 2011 by jerryking
The Slow Hunch: How Innovation is Created Through Group Intelligence
By Dan Rowinski / June 9, 2011

Chance favors the connected mind. That is what author Steven B. Johnson says to those looking for the next big idea. Johnson is the author of "Where Ideas Come From" a book that looks at the macro trends on how innovation evolves.

Ideas are rarely created through a "eureka" moment....Johnson believes that ideas are born of a "slow hunch" that are made possible through periods of technological innovation and evolution. If you are creating a startup, where do you get your ideas from?

Innovation is often made possible by the evolution of networked possibilities....
The Hive Mind & Collective Intelligence

"It is just this idea that if you diversify and have an electric range of interests and you are constantly getting interesting stories about things that you do not know that much about or are adjacent to your particular field of expertise you are much more likely to come up with innovative ideas," Johnson told ReadWriteWeb.

The same approach would work well for developers and innovators working on the next technology breakthrough. Startup founders should take step back from their project and ask what type of similar projects have been undertaken in a completely different field and see if those lessons can be applied to their project.

"The trick is to look at something different and borrow ideas. It is like saying 'this worked for that field, if we put it here what would it do in this new context?'" Johnson said.

In today's world, the ability to branch out of your field of expertise has been made much easier through social media. You can follow what is happening in your niche through a specifically created Twitter list, but it is also beneficial to create lists of people working in different sectors as well.

"The important thing is that this is not some kind of hive-mind wisdom of the crowds, collective intelligence network smarts," Johnson said. "The unit is still the individual or the small group. There are some examples of group intelligence. This is an example instead of taking individuals in small groups and making them smarter by connecting them to a wider range of influences."
adjacencies  collective_intelligence  innovation  grouping  Steven_Johnson  start_ups  chance  probabilities  idea_generation  ideas  Communicating_&_Connecting  cross-pollination  cross-disciplinary  interconnections  learning_journeys  connected_learning  wisdom_of_crowds 
october 2011 by jerryking
U.K. Warns of Cyber Crime Risk -
OCT. 12, 2010 | Wall Street Journal | By STEPHEN FIDLER. U.K.
Seeks Private Industry Help in Averting Cyber Attacks
The head of Britain's communications intelligence agency, GCHQ , said
that it may need to receive direct feeds of information from private
companies in key economic sectors in order to better protect the U.K.
economy from the threat from cyber attacks...New approaches may be
needed to deal with attacks on Britain's critical national
infrastructure—industries such as gas, electricity supply and banking
networks. "We need to consider the value of receiving in return a direct
feed of information from the operators with that same sort of
timeliness so that we are aware of the attacks that they are seeing on
their systems as they happen." This points to a different sort of
partnership between the national security agencies and key
industries--systems that are more interconnected and new financial
models to underpin a national capability which is both public and
cyberattacks  United_Kingdom  cyber_security  cyber_warfare  security_&_intelligence  GCHQ  organized_crime  infrastructure  vulnerabilities  real-time  network_risk  interconnections  power_grid 
october 2010 by jerryking
Chance Favors the Connected Mind
September 27, 2010 | Jam Side Down | by Marty Manley. This
weekend, the Wall Street Journal published a very insightful article by
Steve Johnson, author of Everything Bad Is Good for You, which argues
that video games and TV shows are actually making us smarter and The
Ghost Map, which chronicles the heroic efforts of John Snow to prove
that London's terrifying 19th century cholera epidemics were water
borne, not airborne as widely believed.

The article is condensed from Johnson's forthcoming Where Good Ideas
Come From: The Natural History of Innovation, which describes the
conditions under which "ideas have sex" and multiply. He has also
released a YouTube video that is both a captivating summary and a
brilliant piece of media.
book_reviews  books  cholera  innovation  YouTube  Steven_Johnson  interconnections  ideas  idea_generation  luck  chance  information_spillover  ideaviruses  connected_learning  collective_intelligence  contingency  19th_century  virality 
october 2010 by jerryking
Off the Shelf - ‘Fault Lines’ Concludes Global Economy Remains Vulnerable -
July 31, 2010 | NYT | By NANCY F. KOEHN reviews “Fault Lines:
How Hidden Fractures Still Threaten the World Economy” by Raghuram G.
Rajan who concludes that the financial crisis erupted “because in an
integrated economy and in an integrated world, what is best for the
individual actor or institution is not always best for the system.” Like
geological fault lines, the fissures in the world economic sys. are
more hidden and widespread than many realize. And they are potentially
more destructive than other culprits, e.g greedy bankers, sleepy
regulators and irresponsible borrowers. Rajan, a finance prof at the U.
of Chicago and former chief economist at the IMF argues that the
actions of these players (and others) unfolded on a larger worldwide
stage, that is subject to the imperatives of political economies. He
cites 3 fault lines: domestic political stresses; trade imbalances among
countries; and the tensions produced when financial sys. with very
different structures interact.
book_reviews  economic_downturn  financial_crises  crisis  threats  interconnections  interdependence  books  systemic_risks  vulnerabilities  fault_lines  hidden  latent  regulators  uChicago  global_economy  imbalances 
august 2010 by jerryking
Op-Ed Columnist - In Athens, a Question From Lydia -
May 14, 2010 | New York Times | By THOMAS L. FRIEDMAN.
Friedman argues that there's a tension between “situational values”
--doing whatever the situation allows--and "sustainable values”, values
that inspire in us behaviors that literally sustain our relationships
with one another, with our communities, with our institutions, and with
our forests, oceans and climate. Regulations, while important and
necessary, are insufficient in an increasingly connected world (i.e.
environment, markets, and societies). Trust and values come to the fore and the fear
is that our value system is being harmonized to the short-term thinking
associated with our markets.
values  value_systems  Tom_Friedman  social_fabric  social_trust  covenants  trustworthiness  regulation  Communicating_&_Connecting  interconnections  community  short-term_thinking 
may 2010 by jerryking
New rules for big data
Feb 27, 2010 | The Economist Vol. 394, Iss. 8671; pg. 16 |
Anonymous. Now the information flows in an era of abundant data are
changing the relationship between technology and the role of the state
once again. Many of today's rules look increasingly archaic. Privacy
laws were not designed for networks. Rules for document retention
presume paper records. And since all the information is interconnected,
it needs global rules. New principles for an age of big data sets will
need to cover six broad areas: privacy, security, retention, processing,
ownership and the integrity of information.
archaic  data_ownership  data_quality  information_flows  interconnections  massive_data_sets  privacy  ProQuest  rules_of_the_game 
march 2010 by jerryking
Unboxed - Who Says Innovation Belongs to the Small? -
May 23, 2009 | New York Times | By STEVE LOHR. Technology
trends also contribute to the rising role of large companies. The lone
inventor will never be extinct, but W. Brian Arthur, an economist at the
Palo Alto Research Center, says that as digital technology evolves,
step-by-step innovations are less important than linking all the
sensors, software and data centers in systems.
innovation  size  Steve_Lohr  Clayton_Christensen  large_companies  W._Brian_Arthur  sensors  software  interconnections  Fortune_500  brands  back-office  data_centers  systematic_approaches  systems  systems_integration  Xerox 
october 2009 by jerryking
Bright Future for Green Business - June 2009 -
June 2009 | Alumni Bulletin - Harvard Business School | BY
Sarah Auerbach. several systemic problems hold the green tech industry
back. One is a failure to think about the interrelationship of
resources: You can grow great biofuels, for example, but only if you
have an abundant supply of water. You can desalinate massive quantities
of water to solve your water problem, but only if you have abundant
HBS  alternative_energy  venture_capital  interconnections  tradeoffs 
august 2009 by jerryking
Canada, a nation given to fanciful flights from reality - The Globe and Mail
May. 25, 2009 | Globe and Mail | Daniel F. Muzyka. Lays out
his "realities" for dealing with Canada's political-economic challenges.
(1) Business creates wealth, government redistributes it. (2) Markets are a powerful force. (3) Capital moves. (4) Risk has two sides. humans have all kinds of decision biases around risk. We need to recognize that there may be a "risk/return" relationship in that the average expectation is to realize a certain return given a level of riskiness in our investments. However, there are no guarantees. (5) Structural problems are just
that. If we don't deal with problems because they just aren't painful enough in better times, they will come back to haunt us in the next downturn - only worse. (6) Externalities come back to haunt. (7) Subsidies are bad and
become addictive. (8) Bailouts are no free lunch. (9) It is what you negotiate and what you are worth. Add enough value to justify your wage rates (10) Value added and productivity are the keys to success....Create more value than others and do it more productively...govts. that provide social, health and educational services should be asking questions about how productive their service delivery is, not just how much they are investing in it. (11) Innovate or wither. Propping up what exists - or worse, what existed - for the sake of maintaining the status quo, especially with subsidies, is a road to defeat....focus on research and innovation,
bailouts  Canada  Canadians  capital_flows  delusions  Daniel_Muzyka  externalities  hard_truths  innovation  interconnections  negotiations  productivity  realities  regulations  risks  rules_of_the_game  self-worth  subsidies  value_added  wishful_thinking 
may 2009 by jerryking

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