Thursday, January 15, 2004

Initialization Pain

It is early in the front end where confusion reigns supreme. How familiar. I apologize in advance for the obscure language below - used as a short-hand expedient to get key issues out on the table

The purpose of staging the gatherings is to help systems freaks obtain services for business support - and nothing else. While it will be most enjoyable to be in the company of Ashby-speak peers, the objective is marketing intelligent systems services to business. Recent events triggered by the class of Enron, I believe, have provided a special one-time, perishable marketing opportunity.

The general audience message, delivered in professional inform/consent style, is that the business environment is step changing in material ways due to driving forces now outside of Establishment control. The usual hindsight damage response approach to this disturbance, in lieu of compliance, will challenge organizational survival. The purpose is to acquaint the audience with the authorless drama and advise of the value of anticipating the road ahead.

You can leapfrog the regulatory mess by getting your internal control act together (systems engineering wise)and eliminate compliance and tort risk. Preemption will pay for itself in a few months: regulator-driven hindsight response will ruin the corporation. As intelligence amplification (IA - Ashby) increases, tort liability increases and regulatory pressure will eventually increase. For the business management, a decision to follow the herd with BaU (business as usual) regarding internal control, now has material consequences. The SEC has lifted the business judgement rule for senior management.

Before, using the CEOracle as complexity converter was generally sustainable in commerce. Now that a regulator is demanding scrutable evidence in place of whim, the CEO is reduced to saying “Pay no attention to that man behind the curtain!” There will be no way to hide the corporate complexity or the baseless, arbitrary way rules of action for corpoman have been selected - from the stakeholders

Alien IA has already changed the standard of care benchmark enough, in tort, to precipitate regulatory changes that, in compliance, undermine the purpose of the traditional corporate hierarchy to send social power to the CEOracle. The collision is unprecedented and outcome uncertain, but IA will continue to advance for sure. If you preempt, you are advantaged to the max. If you don’t, you join the herd stampeding over the precipice.

The advantage gap for a systems approach has widened, not because systems engineering (BPR) can bring substantially more benefits than it could five years ago, but because the legal penalty for persisting with BaU, sans the business judgment rule, has escalated to bankruptcy.

Discredited professions will take a long time to regain public confidence in the watchdog role. Meanwhile the public is not going naked and vulnerable. The discredited professions will be permanently bypassed in the new regime. Civil court will reign supreme. Tort law with the SoC (standard of care) tracking the BAT (best available technology) is the only watchdog that keeps in step with the times.

At this time, measurements indicate strongly that nothing cultural in any of the player organizations has changed. Listed corporations are flogging their workers to, somehow, take responsibility for compliance. Auditors still look for loopholes. Little money is being spent for outside services. Unlike the Y2K matter, the date is approaching and nothing substantial is being done. There are far too many lawyers ready to cash in on non-compliance. The rate of CEO retirements has doubled.

Tort law is not going to change. The interpretation of the law is not going to replant the safe harbors for management by whim. The regulator is tasked by Congress to enforce a rule it would not comply with itself. The public interest will watchdog this. The regulators have as much trouble in benchmarking scrutable connectivity as the regulated do in compliance. Shannon’s 10th governs and is the only stop rule. IA is the only way to get scrutable connectivity to natural law and IA distorts the brain size cascade hierarchy. What a show!

A strategy of preemption over response, in this affair, has never had a higher payout. The consequences for hindsight responses have never been so severe. [USSG Boeing fiasco]. While the benefits of getting your act together on an objective basis are the same, the consequences of an exclusive policy of damage response have strongly escalated.

The workshops get into the complexities of implementation for anyone serious about taking action. The lecture is geared to entertain any and all. I recognize that a long time lag is necessary between the inform/consent show and a workshop decision. If the first show "sells," the next steps will adapt. God save the Queen!