Internal Hackers

When you ask people to rate the impact on their organisation of an internal hacker, they often say medium to low and when asked about the probability, it is usually low. Yet all the evidence says that when an internal attack occurs the impact, because of the inside knowledge, is in fact high. In the case of Societe Generale where the hacking was internal the impact was very high, but not yet as high as Barings. No wonder organised crime aims to place its own on the inside of financial organisations.

Neanderthals didn't send Christmas cards

The way risk is managed is one measure of a society and its reach. Modern man,with more extended kinship links, had a greater network than the Neanderthals, whose artefacts’ origin indicate a much smaller territorial range. In the event of adverse conditions a strong and widespread network remains a valuable protection against downside risk and ,on the principle of “it’s not what you textmessage it’s who you textmessage” it can be argued that networks provide opportunities for advancement, which is all around managing upside risk.


The City of London is a very advanced and venerable network, arguably the best in the world. It owes some of its success and many of its failings to the old boy element, but some of the newcomers are impressed by the way the physical proximity allows for ideas to be brought to the attention of many key players quickly and for them to be honed through discussion with many different interested parties. Market research is one of the ways to manage upside risk, to reduce the uncertainties in a proposition and the London Market and the network it represents have an edge in this area.

The fact that newcomers are quickly involved into the London Market network strengthens it. It is not a closed shop, it does not try to exclude foreigners, quite the contrary they are key to its purpose. It suffers like any long established network from unnecessary activities and some downright dubious ones. It is protean through constant renewal, not only by accepting new people, but by offering opportunities for people to recycle themselves. Having lived in Japan for 18 years I can say that it can offer far better opportunities than any Japanese network that I know of. It provides individuals with upside risk opportunities to find employment, promote services, create new businesses, solve problems and to take risks.

Thinking legacies

Great teachers leave many legacies and I am sure that this is true of Peter Lipton who died when playing squash in November last year. He was the Head of the Department of History and Philosophy of Science at Cambridge and a famously exciting lecturer. The Guardian obituary reports that when asked on www.askphilosophers.org what the purpose of philosophy was he responded that "reading the philosophical questions on the site might make you more aware, thinking about them just might make you more intelligent."

I like the note of decent doubt which the "just" implies, signifying very low probability but nevertheless holding out rewards. Think about risk and who knows?

Best practice at Royal Marsden

Organisations that deal with other people's emergencies also have the skills to deal with their own. The Royal Marsden Hospital in London, one of the top cancer treatment facilities in the country, which suffered a serious fire on January 2nd demonstrated just the sort of crisis management that gives confidence to the general public.

Not only did they arrange for all patients affected to be cared from at the Brompton hospital nearby, they completed operations even as the fire was taking hold, no one was injured and they are already back in the business of seeing and treating patients.

Such a good result is not luck, but good planning, practice and resilient teamwork - a good example of how it should be done. What still remains is to determine how a fire was started - hospitals have a poor record of toaster fires, interestingly during the last fireman's strike toaster use was banned in most hospitals with positive results. But a toaster at the Royal Marsden, surely not .

Hot pants

Which is more use when you have an oil fire in your frying pan - a bowl of water or a large pair of ladies' underwear?

Last week in northern England , faced with a frying pan fire when cooking fried bread the owner's son ,18, threw water over the flames and made the fire a whole lot worse. His cousin then grabbed a pair of his aunt's knickers size 18-20 from a nearby washing pile and used them to successfully smother the flames.

Think risk, smarter decisions.

Work helps

The Financial Times reports today that in May 2007 the Department of Work and Pensions reported that 504,000 people below the age of 35 were signed on for incapacity benefits or severe disablement allowance. This compared with 443,000 under 35 who were claiming job seeker's allowance.

Additional comment points out that "in many cases it was worklessness, with its attendant financial problems and absence of purpose that made people depressed." It is depression,stress and anxiety which qualify people for incapacity benefits.

There are very definite mental health benefits from work. The importance of rehabilitation is widely accepted and AIRMIC has two free publications on its site www.airmic.com on the subject. However, given the size of the problem as reported by the FT, it is going to need a lot more than companies working at rehabilitation to get the numbers down.

The greatest risk manager of the ancient world?

Who was the greatest risk manager of the ancient world? Not easy to separate fact from fiction, but here is a possible nomination from Thucydides, the great ancient Greek historian who wrote that:



"Themistocles .. showed both the best grasp of an emergency situation at the shortest notice, and the most far-reaching appreciation of probable future developments,both for evil and for good."



Themistocles saw that Athens needed to develop as a maritime power, in order to expand as an empire, but also to protect itself against the superpower of the time, Persia. His strategy, realised eventually after 14 years , was to build a fleet of 200 galleys, train the Athenians to manoeuvre them effectively and to improve the harbous at Piraeus. In suggesting this course he was going against recent history for the Athenians had defeated the Persians on land at the battle of Marathon. Only by prolonged debate, culminating in a vote by the assembly of citizens which ostracized Aristides, his opponent who favoured developing the army, was he able to succeed.



In 480BC the Athenians with their allies destroyed the Persian fleet at Salamis and in doing so lifted the threat of Persian domination.



Themistocles was a master strategist in concept and implementation, who carried those who would man the galleys with his decision. It is extraordinary that such a fractious democracy could be persuaded to change from the military approach which had proved successful against the Persians.They were, after long debate, realistic enough to understand that infantry would not be sufficient to save them a second time because of the resources of the Persian Empire. Few victors prepare for the next war by such radical change. Beyond the genius of Themistocles it was a triumph for the messy business of democratic decisions.

Idiots and Risk

Rebecca West in her masterpiece "Grey Lamb and Black Falcon" observes that 'idiocy' is the female vice. She explains that the derivation of the word idiot comes from the Greek idiotes which means a private person and in her opinion women were more prone to just taking into account what immediately affects them and their families.



There are several newspapers, the Daily Mail for one, which focus their reporting not on the wider world and its issues but on those private stories which idiots, in the sense that Rebecca West meant, appreciate because they excite but do not threaten. This year the Maddy McKann disappearance has been just such a story and the current reappearance of Mr Darwin, presumed dead 5 years ago another one.



The Idiot's approach to risk tends to focus too much on the impact that risks could have and not enough on the probability that they will occur. Excessive concern over autism and the measles jab has meant the reduction of children being immunised and so the almost certain result of children dying of measles, a threat which had been almost wiped out, until the Idiot's focused on the personal rather than the bigger picture. In trying to protect their own children, parents have greatly increased the risk to all children, including theirs. My grandmother had exactly this view of risk. She was very proud of the fact that she had kept my father free of mumps as a child. When he contracted it from me he was aged 40 and as a consequence went deaf in one ear for the rest of his life.


United we stand, divided we fall when confronting the viral legions.

Fair shares

Bird flu represent a major risk for the world's population. It also is a big opportunity for the pharmaceutical company that develops a vaccine. The cost of such a vaccine is unlikely to be affordable by many affected countries, including Indonesia where most of the recent cases have occurred. Indonesia is not willing to share its samples with the World Health Organisation unless it gets vaccine plants in return.

The New Scientist in its editorial of 24.11.2007 on the subject suggests a way out of the stalemate

" The pandemics of TB and HIV may provide answers. Here public-private partnerships and other hybrid organisations are forming that are not driven by large profits. They are starting to organise R&D globally to develop drugs and vaccines cooperatively and to distribute them fairly.... everyone must start once again sharing viruses in test tubes before we are sharing them on the wind"

Sustainability

Sustainability is yet again the flavour of the month. A major broker was promoting its importance at a Conference in Sao Paolo two weeks back. 30 years ago my brother and I picked up a cheque for $10,000 in Houston for an essay on sustainability. We focused on what the UK should do with its North Sea Oil Resources and proposed a fund which would be used to develop sustainable alternatives when the oil runs out. Peter Walker, a key figure in the defeat of the miners' strike and a very successful entrepreneur/politician, told us that no government would take such a long term view.



In fact the UK did not blow the oil bonanza, it kept fuel taxes high, but it did not make the significant investments in alternative energy sources that we proposed. Now it needs to.



The prize that we won in 1977 was the George and Cynthia Mitchell Prize for Sustainable Development, sponsored by the Mitchell Energy and Development Corporation and supported by the University of Houston and the Club of Rome. It was awarded at a Conference in Houston on the subject of "Alternatives to Growth" at which Herman Kahn, Tip O'Neill and Jim Wright spoke. I remember that Jim Wright ,a Texan congressman who later succeeded Tip O'Neill as the Speaker of the House of Representatives, stated that there were "no alternatives to growth" - for some in Texas some things never change, but George and Cynthia Mitchell made an investment so that they could.