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Hindsight: Difference between revisions
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'''Middle manager''': [''interrupting'']: Simply put, we were not [[proactive|proactively]] looking for it. We were not using [[data]] properly to evaluate risk. To add value as an [[Inhouse lawyer|in-house legal]] function we need to use [[Innovation|innovative]] tools to crunch data, proactively spot emerging risks and escalate them to business.”}} | '''Middle manager''': [''interrupting'']: Simply put, we were not [[proactive|proactively]] looking for it. We were not using [[data]] properly to evaluate risk. To add value as an [[Inhouse lawyer|in-house legal]] function we need to use [[Innovation|innovative]] tools to crunch data, proactively spot emerging risks and escalate them to business.”}} | ||
On every disclaimer any [[financial services]] firm has ever sent — and ever ''will'' send — however paranoid, overblown, absurd, weird or wonderful, there will be one constant, ringing reminder: one thing, which, above all the | On every [[disclaimer]] any [[financial services]] firm has ever sent — and ever ''will'' send, in the history of the world, until the [[End of days|End of Days]] — however paranoid, overblown, absurd, weird or wonderful, there will be one constant, ringing reminder: one thing, which, above all the others it will say: “[[past performance is no indicator of future results]]”. | ||
But how easily we forget. | |||
===A cold night in Vienna, 1808=== | ===A cold night in Vienna, 1808=== | ||
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It is a persistent frame: by the time we get around to analysing any catastrophe and how it played out, all circumstances are known, all options have crystallised and all discretions have hardened. The employee who, with imperfect information and in the fog of war, tacked to ''starboard'' when hindsight revealed a safe harbour to ''port'' finds {{sex|himself}} short an very ugly option which those with executive responsibility for his performance will be mightily tempted to exercise. This is the lesson of {{fieldguide}}: we blame the [[meatware]], because it exonerates the executive. | It is a persistent frame: by the time we get around to analysing any catastrophe and how it played out, all circumstances are known, all options have crystallised and all discretions have hardened. The employee who, with imperfect information and in the fog of war, tacked to ''starboard'' when hindsight revealed a safe harbour to ''port'' finds {{sex|himself}} short an very ugly option which those with executive responsibility for his performance will be mightily tempted to exercise. This is the lesson of {{fieldguide}}: we blame the [[meatware]], because it exonerates the executive. | ||
What caused the catastrophe — an inquiry one can only launch upstream — forms, informs, and reforms the ''down''stream narrative. Take [[Madoff]]: now we have the book, the film, the | What caused the catastrophe — an inquiry one can only launch upstream — forms, informs, and reforms the ''down''stream narrative. Take [[Madoff]]: now we have [[No One Would Listen: A True Financial Thriller|the book]], the film, the exposés, the fabulously gruesome congressional committee hearings, ''everything'' about his investment strategy is ''obviously'' bogus. How could this possibly be allowed to happen? There can be only one explanation: someone further down the chain was asleep at the switch. This is where the historian’s perspective is more useful than the [[thought leader]]’s.<ref>Sidebar: {{author|Thomas Kuhn}}, the greatest of all philosophers of science, was neither a scientist nor a professional philosopher but a ''historian''.</ref> We know Madoff’s regulators were ''not'' asleep at the switch because we have {{authorHarry Markopolos}}’s testimony that they ''can’t have been'': he kept prodding them in the ribs and pointing out exactly the anomalies they should have, the now agree in hindsight, been alarmed by.<ref>His paper to the SEC, in November 2005 —more than ''three years'' before Madoff eventually shopped himself (even then the SEC didn’t see it!), was entitled “The World’s Largest Hedge Fund is a Fraud.”</ref> | ||
it wasn't that the operators were asleep, that is to say, but that ''their switch didn’t work''. But a maladroit switch is the responsibility of the executive, not the worker. | it wasn't that the operators were asleep, that is to say, but that ''their switch didn’t work''. But a maladroit switch is the responsibility of the executive, not the worker. | ||