Reports of our death are an exaggeration: Difference between revisions

Reports of our death are an exaggeration (view source)

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 The challenge is not to automate indiscriminately, but to ''optimise'', so your people are not diverted from valuable work by box-ticking, form-filling and formalism.
 ===A real challenger bank===
-Optimised [[automation]] has its place. Ceteris paribus, an organisation that has optimised its machines will do better than one which hasn’t.
+Optimised [[automation]] has its place. [[All other things being equal]], an organisation that has optimised its machines will do better than one which hasn’t.
-An organisation where machines are optimised is one whose ''people'' are also optimised: maximally free to work their irreducible, ineffable, magic hunting out new lands, identifying new threats, forging new alliances — ''playing the infinite game'' — while uncomplaining drones till the fields, tend the flock work the pits, carry the rubble away from the coalface and police known pitfalls. To minimise the chance of [[human error]]. The machines must be historical. They look backward, by reference to available data, which is [[data is from the past|from the past]]. They cannot anticipate the future — because you can’t extrapolate the past from the future — any better than humans can. But  humans can improvise in the face of the unexpected in a way that machines can’t.
+An organisation where machines are optimised is one whose ''people'' are also optimised: maximally free to work their irreducible, ineffable, magic hunting out new lands, identifying new threats, forging new alliances — ''playing the [[Finite and Infinite Games|infinite game]]'' — while uncomplaining drones till the fields, tend the flock work the pits, carry the rubble away from the coalface and police known pitfalls. To minimise the chance of [[human error]]. The machines must be historical. They look backward, by reference to available data, which is [[Big data|from the past]]. They cannot anticipate the future — because you can’t extrapolate the past from the future — any better than humans can. But  humans can improvise in the face of the unexpected in a way that machines can’t.
 There is an ineffable, valuable role optimising those machines, adjusting them, reconfiguring them to be optimal in the environment as it evolves.
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 Now, the dilemma. If, over thirty years, you have systematically recruited for those who best display machine-like qualities — if that is what your education system targets, your qualification system credentialises and your recruitment and promotion system rewards —  ''your people won't be very good at it weaving magic''.
-Most likely, ''nor will you''. Your organisation will instead be fearful of human magic. Will see in it the seeds of [[Enron]], or [[Kerviel]], or [[Madoff]], or [[Archegos]].
+Most likely, ''nor will you''. Your organisation will instead be ''fearful'' of human magic. Will see in it the seeds of [[Enron]], or [[Financial disasters roll of honour|Kerviel]], or [[Madoff]], or [[Archegos]].
-But these disasters came about notwithstanding the modernist method. They are products of it. These people found and exploited zero-day flaws in the modernist system, ''which is [[air crash versus financial crash|what we should expect resourceful, dishonest people to do]]''.
+But these disasters came about notwithstanding the modernist method. They are products of it. These people found and exploited zero-day flaws in the modernist system, ''which is [[Air crashes v financial crashes|what we should expect resourceful, dishonest people to do]]''.
-But a fully taxonomised system, that runs entirely in algorithm, however smart, derived from the scar tissue of the past, is ''literally blind'' to zero-day flaws. Unless mediated by people thinking and viewing the world unconventionally, it will repeatedly fail. And this has been the [[financial disasters roll of honour|tale of the financial markets]] since Hammurabi published his code.
+But a fully [[Risk taxonomy|taxonomised]] system, that runs entirely in [[algorithm]], however smart, derived from the [[Policy|scar tissue]] of the past, is ''literally blind'' to [[Zero-day vulnerability|zero-day vulnerabilities]]. Unless mediated by people thinking and viewing the world unconventionally, it will repeatedly fail. And this has been the [[financial disasters roll of honour|tale of the financial markets]] since Hammurabi published his code.
-The age of the machines — our complacent faith in them — has made the situation worse. Machines will conspire to ignore “human magic”, when offered, which says “this is not right”. That magic was woven by [[Bethany MacLean]]. [[Michael Burry]]. [[Harry Markopolos]]. [[WireCard|Dan McCrum]]. The formalist system systematically ignored them, fired them, tried to put them in prison .
+The age of the machines — our complacent faith in them — has made the situation worse. Machines will conspire to ignore “human magic”, when offered, which says “this is not right”. That magic was woven by [[Enron Corporation|Bethany MacLean]]. [[Collateralised debt obligation|Michael Burry]]. [[Harry Markopolos]]. [[Wirecard|Dan McCrum]]. The formalist system systematically ignored them, fired them, tried to put them in prison.
- difference between excellent banks and hopeless ones: the transparent ''informal'' networks by which a good institution mysteriously ''avoids'' landmines, pitfalls and ambushes, while a poor one walks into every one.
+The difference between excellent banks and hopeless ones: the transparent ''informal'' networks by which a good institution mysteriously ''avoids'' landmines, pitfalls and ambushes, while a poor one walks into every one.
 Sundar Pichai can’t code that. The same human expertise the banks need to hold their creaking systems together, to work around their bureaucratic absurdities and still sniff out new business opportunities and take a pragmatic and prudent view of the risk — this is not a bug in the system, but a feature.