The Economist Magazine recent article addressed the seminal problem of what risk will hurt you the most – either what you don’t know or what you know but don’t interpret properly and implement remedial action. The article focus was on the shadow banking system [non-bank financial systems] and the recent recession. But the lesson learned [or not] was that the key economic risks were not buried in data but rather in “plain view” – inflated housing prices and some banks low capital level. But “plain view” facts are not literally in plain view if you do not see them. Some refer to this as black swan risk management. Whatever you refer to it as, the circumstances of these past few years is a reminder that if you change the way you look at things, the things you look at change. If so, how are you changing the way you look at 2011?
Posted by: Mark J. Guay | January 25, 2011
The Great Debate: Data versus Decisions
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Posted in Contracts, Corporate Governance, Strategic Planning, Uncategorized
The New York Times recently wrote about the federal inquiry into our financial system concluding that ‘The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have be done. If we accept this notion, it will happen again.’
The financial crisis was avoidable. The policy makers, supervisors, regulators, corporate managers, and Wall Street leaders could have done better. Anyone remember Jeff Skilling of Enron fame? Exposure to bad financial decision making is not new. Bad decision making is less about hidden data and more about missing values.
There may be hidden financial risks ahead, however, looking differently at 2011 also means looking at our careers, as well our relationships with our wives, our children, our families, our community, and our church.
Notice that we have the same problem as corporations. We have a limited amount of time, energy, and talent. Most of us could do better in allocating the time to we devote to each of our pursuits.
Technology has a great impact on our time. Each of us a great impact on our values and what we choose to create.
“If you woke up tomorrow morning and could have any technology you can imagine, what would have the biggest impact on your business and your life?
By: Bob Stone on January 26, 2011
at 1:12 pm