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Governance, Strategy, Technology, Book synthesis

22 November 2018

Book synthesis

How to stay on track

Here’s the paradox of progress: new
technologies enable ultra-sophisticated
systems with untold potential – that
are far more vulnerable to failure than
in the past. How, then, can we guard
against meltdowns in our increasingly
complex systems?

What do the following have in common: the disastrous attempt by Target – the US retail giant – to expand into Canada; Facebook’s failed initial public off ering; and the Three Mile Island nuclear disaster? They were all unpredictable “industrial accidents”, which are becoming increasingly frequent across all sectors. What else unites these three examples? Each was triggered by an accumulation of small errors: taken individually, these mistakes were of minor importance – but when they began to interact, they set a snowball in motion. With no check-back function in place, they ended in disaster. What lies behind these meltdowns are systems (technological, organizational, and project-based) that are ever more complex, operate on the tightest of deadlines, and leave little-to-no wiggle room for setting things straight when unforeseen mishaps come along. The age of exponential technological progress and uninterrupted acceleration is also the golden age of meltdowns. Are these failures inevitable? No – there are things you can do to limit their impact on your organization. The authors of Meltdown provide practical solutions to help you become more alert to the warning signs and, in response, transform the way you make decisions, manage your staff , and design your systems.

What’s pushed us into the danger zone

Why do small failures provoke such large-scale damage in today’s world? Present-day systems rely on complex technologies and processes made up of a multitude of interlocking components. These are difficult to model and, since they do not follow a linear progression, intervention becomes problematic. The systems also disconnect us from the reality on the ground: we count on remote indicators and sophisticated tools but don’t really control them. Until the 1990s, dam inspectors in California identified abnormal flows by sight. Nowadays, they base their decisions on data from remote sensors – decisions that can lead to genuine disasters if they malfunction. Knight Capital was threatened with bankruptcy in 2012 after an error in its ordering software cost the financial services firm $500 million in a few hours. This misfortune would have been impossible 30 years ago, when it was human traders (merely assisted by far more basic computer systems) who handled such transactions directly. A lack of wiggle room heightens the risk of a chain reaction

Excerpt from Business Digest N°291, November 2018

Tagged with: decision from data, meltdown, decision-making

Published by Caroline Schuurman