Thursday, April 29, 2010

Kitchen Sink Economics?

Once again it seems that those who wish to deny the fundamentals and buck the obvious are being found out. The scorn of the powerful for simple truths has always irritated me.

A couple of years ago now I gave a lecture at my old business school where I talked about the financial crisis as a demonstration of the failure by the financial sector to understand Knowledge Management. To illustrate this I described my own personal experience or retail banking and how it had changed, and what that told me about the industries perception of, and approach to, risk and how I had expected, and predicted, the implosion. You cannot beat the mark one brain for bringing contextual insight and judgement to the complexity of risk. The would be Masters of the Universe in finance are just one more common example in business of those wearing the emperors new clothes. The only difference being is that in many cases I think some are aware they are naked (making their crime all the worse in my book), and there are some who are simply unwilling to listen to the lone voice that tells them they are.

Alas it seems to be happening again. Many people, me included, expressed considerable doubt about EMU and the launch of the Euro on the basis that it denied the existence of some fundamental flaws. Those being in this case - you cannot bring together economies that are radically out of step, remove the ability to respond locally to issues by effectively removing financial levers and expect it all to go well. Add to that the fact that you cant live beyond your means indefinitely as an individual or as a nation without consequences. Of course the powers that be said that this was not so, some how these basic rules didn't really apply in their new freakonomics world, and in any case the checks and balances were there that ensured that the economies were sufficiently converged to make this no problem. Yea right – obviously.

The other day there was a news report describing how modern attitudes to debt is different to the baby boomers attitude. Different to the extent that people now take on debt with little or no intention of ever paying it off, just spinning the financial plates. Well, let me say for the record – I don't agree and I tweeted it as a council of despair. Well, it seems that some nations and organisations seem to believe they can adopt the same notion and perhaps a nation actually defaulting on its debt is seen as not too important. I take no great pleasure in saying this or seeing the problems amount in Europe, but the situation with Greece will get worse. The situation in Germany will also get worse as it becomes increasingly obvious that many of the bail outs of the PIGS are flawed and going to land at the door of the German tax payer. Look at NAMA in Ireland as a perfect example.

Sometimes it is worth cutting through the crap that gets trotted out as the wisdom of the rich and powerful men in suits and remind them that many of the things necessary in life and business are learnt at kindergarten and basic economics is included.

Wednesday, April 7, 2010

The revenge of the machines

I love this. For all the acolytes of technology and AI in particular, here is a salutary reminder of why human cognition is the key to solving complex business issues.

Robot folds a towel.

Making those knowledge disclosure points as effective, accurate and as timely as possible is the aim of KM or KAM (Knowledge Aware Management) as I sometime like to refer to it. That is very distinct from a) information management, or b) installing search engines.

For the record it actually took the robot around 25 minutes to fold the towel.