(216) 609-3940
SandRun Risk
  • Home
  • What We Do
    • Risk Management
    • Insurance Claims
    • Insurance Archaeology
  • Blog
  • About
    • Team
    • Our Company
    • Articles
  • Contact

Risk: A Primer for Business Leaders – Part XI (Complex Risk and the Organization)

7/5/2019

3 Comments

 
Picture

​Because few things are certain, good leaders value expertise and the process of building expert knowledge through fact-based thinking. In the digital age of ubiquitous access to questionable information, nothing might be riskier than organizations making day-to-day decisions in the absence of informed judgment of what constitutes objective reality. 

“It was no accident that the Oxford Dictionaries’ word of the year in 2016 was “post-truth,” a condition where facts are less influential in shaping opinion than emotion and personal belief.  To adopt post-truth thinking is to depart from Enlightenment ideas, dominant in the West since the 17th century, that value experience and expertise, the centrality of fact, humility in the face of complexity, the need for study and a respect for ideas.” -Michael V. Hayden, The End of Intelligence, New York Times, April 28, 2018

“There is a cult of ignorance in the United States, and there always has been.  The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that my ignorance is just as good as your knowledge. . . . .I believe that every human being with a physically normal brain can learn a great deal and can be surprisingly intellectual.  I believe that what we badly need is social approval of learning and social rewards for learning.  We can all be members of the intellectual elite. . . .” - Isaac Asimov, A Cult of Ignorance, Newsweek, Jan 21, 1980

We live at a time of ubiquitous access to news and information that is fueled by technological advancements in connectivity, from 24/7 cable news to the Internet.  Looking back at history, each time there has been an advancement in technology, it also has required an advancement in the skills of metacognition and leadership.  Take the printing press for example.  When it was first created, people thought that the printing press would usher in an age of peace because more people could talk to each other through the written word. Instead, several centuries of religious wars ensued until enough leaders and members of society changed their thinking and advocated for greater separation between church and state.

In the last section, we discussed how organizations in the modern age are faced with increasing levels of uncertainty that can be classified as simple, complicated, or complex.  Making good decisions, therefore, requires a commitment to fact-based thinking and the use of subject-matter experts who can help us sift through the relevant evidence, formulate hypotheses, and test them.  It also requires increased skill development in metacognition; if something confirms a pre-existing worldview or reinforces self-interest, then it deserves extra scrutiny.  

Perhaps, the greatest risk confronting business leaders is helping the people in their organizations keep pace with a volatile and ambiguous world that is increasingly complex.  To understand this challenge better, let’s first look at a public health risk that is re-emerging.  In 2000, the Centers for Disease Control and Prevention, the leading U.S. public health institute, announced that measles, a childhood disease that still kills more than 100,000 people a year worldwide, had been eradicated in the United States.  Almost 20 years later, the disease is back.  In early 2019, the Governor of the State of Washington declared a public health emergency and outbreaks were reported in 20 other states.  

How is this possible?  Put simply, it matters where people get their information and their capacity for fact-finding and critical thinking to construct as accurate view of reality as possible.  Vaccinations is but one example of how people can construct the wrong reality (i.e., thinking inoculations cause autism, a claim that is not medically substantiated) by customizing where they get and how they process information  Today, the internet is flooded with misinformation questioning the safety of vaccines against measles and other infectious diseases.  Further, the paranoia is not bounded by ideology, class, ethnic group or religion.  Wealthy professionals in Los Angeles, rural Muslims in pro-Taliban areas of Los Angeles, and Orthodox Jews in New York City have contributed to the resurgence of measles.

​Because everything is done by and through people, the greatest risk is the fit between people’s capacities and the demands made upon them to handle complexity and uncertainty.  Hence, increasing the rate of adult development is perhaps the most important strategy to better manage risk.  Until the 1980s, the scientific consensus was that human development was static throughout adulthood.  That is, the accepted picture of adult development was akin to physical development; human growth was thought to end by our twenties.

Picture
​This view of adult development coincided with the end of World War II when manufacturing and agriculture employed one in three workers in the United States. Thanks to the work of scientists like Robert Kegan, we now appreciate that adult workers have the capacity to develop significantly after their teenage years. Because developmental capacity affects everything a person is able to think or do in response to uncertainty, the next section will take a closer look at Kegan’s work and its implications for risk management.
3 Comments
liana link
8/11/2022 09:52:26 am

thanks for info

Reply
Timothy Campbell link
11/22/2022 02:52:22 pm

Making good decisions, therefore, requires a commitment to fact-based thinking and the use of subject-matter experts who can help us sift through the relevant evidence, formulate hypotheses, and test them. Thank you for taking the time to write a great post!

Reply
Robert Curtis link
2/27/2023 02:41:27 pm

Put simply, it matters where people get their information and their capacity for fact-finding and critical thinking to construct as accurate view of reality as possible. Thank you, amazing post!

Reply



Leave a Reply.

    Authors

    Lori Siwik and Mark Siwik are the founders of SandRun Risk.  They apply the principles of vertical leadership and lean six sigma to the discipline of risk management.  From time to time they share their blog with guest authors who write about important risk management principles.

    Categories

    All
    Insurance Claims
    Mergers And Acquisitions
    Risk Management

    Archives

    March 2023
    February 2023
    May 2022
    December 2021
    September 2021
    August 2021
    July 2021
    June 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    June 2017
    May 2017
    March 2017
    December 2016
    November 2016
    October 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    June 2015
    May 2015
    April 2015
    March 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    May 2014
    April 2014
    March 2014

    Categories

    All
    Insurance Claims
    Mergers And Acquisitions
    Risk Management

    RSS Feed

What We Do.

Risk Management
Insurance Claims
Insurance Archaeology

Blog.

About.

Team
Our Company
Articles

Contact.

Legal.

Privacy
Terms of Use
 
Copyright ©2014 | 4199 Kinross Lakes Parkway, Ste. 275 Richfield, Ohio 44286 | 216-609-3940 | [email protected]