Hindsight is Foresight Foregone

It’s not that we can’t see the future; it’s that we don’t bother.

Granted, none of us can predict it, nor do I presume that some magic algorithm applied to some special pile of Big Data can ease the Fog of the Future.

In part, it’s laziness. Here in the USA, we’re predisposed to the here and now and me, and the rest will sort itself out.  As indeed it does.  But often not as we hoped.

In part it is because we know from abundant experience that too many pious prognostications by proselytizers of progress have turned to sink-holes of time, effort and money.  So why bother.

In management we have evolved the discipline of ‘risk management’ which is part institutionalized experience and part pseudo-science.  ‘Risk management’ is somewhat of an oxymoron like ‘military justice’, ‘artificial intelligence’ and ‘virtual reality’. It trades on a figment of truth to create the illusion that it is more than it is.

Risk management has some level of foundation in its effort to deal systemically with known and knowable risks, but today’s world is increasingly subject to unknowable risks for which there is no statistical basis of quantification of either loss, cost of prevention or remediation.   But that’s not the real problem.

Many in my profession of accounting and auditing gravitate to the  ‘risk management’ mantra, and strive to incorporate it into their mission statement. After all, if you can’t be a ‘risk taker’, being a ‘risk manager’ or a ‘risk something’ is the next best thing. It’s sexier than mere accounting and auditing.  And besides, there’s plenty of precedent for the need for ‘risk management’ given the losses that businesses have incurred for themselves, and more frequently for others in their carefully contrived relationships.

But, truth be told, even the growing cadre of risk management acolytes have trouble peddling their wares to the C suite where hype and hope too often trump (no pun intended) reality and even the crudest calculations of probability.

Let’s take a few examples out for a test drive:

•  Does anyone see any problem with Jeff Bezos and Elon Musk and Larry Paige and the other space cadets filling the skyways and byways with their latest magical brain-farts without benefit of adequate regulation and incubation for proof of concept within laboratory controlled settings, much less in the free-fire environment of that freaky place we call the ‘real world’?
• Is the latest episode of the Theranos melodrama really a surprise?  Or was it the highly probable outcome of a flaky premise sold to incredibly greedy people willing to believe and suspend critical judgment?
• And let’s not beat unduly on Theranos. It’s just one of a number of Unicorns in the magical kingdom of Silicon Valley and other tech redoubts where people with more money than brains can throw it at the wall, hope that something sticks in the lottery of high-tech chance,  and praise themselves that their failures are really essential tuition and down-payment for future greatness.  In their magical kingdom, failure is virtue.  In the real-world, failure gets you fired.
• Where is China going, and where is it taking us?  The West lost that gambit four decades ago with an essential, but ill-conceived opening of relations.  The drive of corporate greed for access to a billion consumers overtook any attempt of western governments to modulate the normalization in a manner that would minimize the foreseeable disruptions we have experienced economically and strategically.  Accordingly, China has grown into an unruly adolescent (in modern world terms, its considerable historical lineage notwithstanding).  Given its desperate economic and environmental constraints, and it’s likely belief that its salvation is in expansion, military conflict with its neighbors and the West seems inevitable in the near to intermediate term.  Trump and China should easily understand each other: a coercive bully that believes he\it has a right to dominance on its terms without obligations to others. I suspect that this is in part an act China has found it can get away with because, unlike with Trump, no one has yet drawn a firm line in the land, the water or the air that they are prepared to defend (although we are beginning to with questionable allied support). Corporate executives are now marveling at how they could possibly have lost their technological edge (which they often willingly gave away in many cases for access to that one-billion consumer market)  and now are losing the market itself in a tightly controlled totalitarian environment where the ‘rule of law’ is more a farce than even a mere political fig leaf of cover.  Who’d a thunk?
• Was the Shell Oil retreat from the Arctic really a surprise,  or merely unfettered stupidity colliding with reality?  When we have so much evidence of failure to properly engineer and install  and monitor and regulate and mitigate such ventures in much less hostile and much more stable environments, what would make any prudent executive or government think that Arctic exploitation would be just another hole in the ground?  Did BP’s experience give anyone in Shell’s HQ pause for concern?
• How about them GMOs?  Scientists are complaining that the average clod on the streets is unjustifiably suspicious of the risks of GMOs.  But when we look at the recent history of our ‘conventional’ food supplies, the engineering of obesity, the evisceration of regulatory oversight and quality control, is there not reasonable cause for concern by the public of what will next be foisted upon them in the guise of progress at their ultimate risk and cost?  This is actually a case of the person on the street exercising ‘risk management’ in the suspicion that those in the Corporate suite will not. At least, not in the consumer’s behalf.
• And then there’s fracking; a mindless grab for resources beyond any exercise of prudence, with costs to society measured only in financial terms to date, with studied ignorance of the collateral environmental, social and economic costs beyond the measure of defaulted securities.

There are a number of simple questions that executive management could ask itself and save a lot of grief when contemplating a new venture or circumstance, or coping with an existing or intractable situation  (like Palestine):

• Has the situation ever happened before, and what can we learn from it.
• Are there any parallels, if not direct precedents, to this situation that can give us a clue of dynamics and outcomes?
• Do we understand the context (historical and present circumstances) of our intended act, and do our assumptions take that context into account?
• Have we tested our assumptions about what should happen if we take this action?
• Have we defined performance standards for our expectations that will give us quick feedback if we’re going off the rails of our expectations.
• Have we asked ourselves how the opposition/competition/stakeholders/regulators are likely to respond, and have we taken appropriate steps to address reasonable concerns.
• What could possibly go wrong, and what’s the worst that could happen….?
• ….and if it does, what are we prepared to do about it?

These are so simple, they don’t even deserve to be sexified as ‘risk management’.  They’re basic management, or even common sense.  Yet the frequency with which they are ignored and often even disdained by the supposedly educated meritocracy has numbed us of any sense of amazement.  Rather, it has implanted a cynicism and contempt and suspicion of all forms of authority: legal, moral, scientific, political, religious, social that accounts more for the rise of Trump, Sanders and Br-Exit than any conventional political explanation.

We could go on, but I’ll trust the point is made, if not accepted.  In the corporate, government and personal world, risk-taking trumps risk management more often than not, and often with predictable consequence.

It’s not that our capacity for foresight is so bad.  It’s that we don’t bother to seek answers we know we’re probably not going to like. And when they’re thrust upon us, we often find ingenious ways to ignore them rather than to deal with them.

So, to say that hindsight is 20/20 because we have the benefit of knowledge that is not previously available is at best half the truth.  As often as not, we just don’t give a damn.

*  *   *

Word of the day:  de-escalate.

Onward

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The Drones Are Coming! The Drones Are Coming!

I’m not one to under-estimate Jeff Bezos. He’s made a career of one-upping the doubters.  But I have to wonder about his latest offering to the world: 30 minute delivery by drone.

I saw the short clip illustrating the proposed service.  Cute little vehicle.  I can just see a thousand of them filling the sky like a swarm of yellow-jackets with their cute little parcel boxes filled with goodies that we just must have within 30 minutes. Of course, that would probably be very helpful if your laptop just died and you needed backup.  And I assume that there will be bigger models of the delivery platform to handle refrigerators and ranges and dishwashers to your front stoop. I hope they will have perfected sensors to assure that the landing zone is clear. And who’s going to get that thing through the front door and installed? But I’m getting ahead of myself, and possibly ahead of Jeff.  He’s a level-headed guy, and by all accounts, I’m sure he’ll move judiciously.  I assume his liability underwriters will also share a few thoughts at the appropriate time.

One thing did surprise me in the video. The yellow parcel box was filled by a human. I know this is the early stage of the Great Idea, but still, wouldn’t it be so much easier to automate the warehouse, which is a relatively secure and structured environment more readily adaptable to massive automation, than to automate delivery in the free-fire zone of the greater world? Besides, automating the warehouse would get rid of all those pesky, whiny folks who complain about being treated like robots, and subject to uncompensated time for security checks because they can’t be trusted. Of course, if you cut out the warehouse jobs, there’ll be fewer people with the means to buy on Amazon, along with the legions of fast food and big box employees who are cutting back on necessities in their involuntary contribution to support their shareholders. (I won’t mention names.)

And about those yellow parcel boxes. Do they get retrieved by a drone next day based on some established protocol? Or do they get picked up by what’s left of the US Postal Service because retrieval is not time-sensitive? Or do they become like water bottles, with a recycle charge that places cost and burden on the consumer to recycle into the waste stream?

And what about air traffic control up to the 500 foot level?  Jeff’s drones aren’t going to have a monopoly for long. There’s FedEx, and UPS, and Ebay, and…well, we all know that the USPS won’t get in the game because it won’t have the capital. Part of the congressionally administered death by a thousand paper-cuts and budgetary asphyxiation.

I assume that all of these smart little cyber-creatures are talking to the Great Controller in the Cloud through WiMax or some such, guided by GPS and constantly informed of the presence of other drones through their own little social network, which I imagine Facebook is working on because, who knows, Drones might like to shop on Amazon for spare parts and accessories to soup up their rig during their time off.  They do get time off, I hope. We all need down-time! After all, corporations are people too, my friend. And drones work for corporations, which means they too are people, my friend.  And if they’re people, they should have the right to vote, just like other people.

Still, I’m worried. Remember that Stuxnet thing that was supposed to bring down Iran’s nuclear weapons program, and only that program, because that’s how it was programmed, until it got out of the barn, without permission?  What if one of these things goes rogue?  Are we going to need no-fly zones near the Pentagon, the Capitol, the Whitehouse, nuclear installations (remember, a tree branch is rumored to have brought down the grid in the Northeast ten years ago)? But wait! There’s a security robot for that! Just slap radar and a laser on it, plant it on the roof, and poof! Shoot that sucker down! Yeeeeha!  (I hope its image  recognition software doesn’t mistake an Amazon drone for a Dreamliner! You know, a Dreamliner at 30,000 feet might not look too different. It’s that spatial thing.)

You might say that this is an example of ‘creative destruction’ with multiple meanings.

But, all seriousness aside, here’s the real problem.  MetroNorth just had a seven car derailment with four deaths, eleven serious injuries and sixty injuries in total.  Possible operator error? Too early to tell.  Infrastructure failure? Highly possible, given that MetroNorth hasn’t had a great batting average lately, and the nation is in an infrastructure investment hole of $3 to$4 trillion. Yes, my friend, that’s trillion with a ‘T’. Our network of weather satellites is in need of refurbishing, but our foresight in this area is only slightly better than our planning to replace the space shuttle in order to sustain our investment in the International Space Station without having to rely exclusively on our best friend, Russia. Meanwhile, The Virgin is still working on sending the One Pct into space for jollies, green-washing his enterprise by investing in biofuels for the jet fleet for the rest of us. (What is the environmental break-even point here?)

So my main point, by way of snarky meandering, is that we’ve got much bigger problems as a society than adventures in technology such as Jeff’s are presuming to solve. For example, it might be beneficial if private enterprise and the USPS got together to figure out how to better pivot the USPS infrastructure to better use for the benefit of all. We don’t really need the newest tablet, or another jet-ski, but we could really use a better and more reliable communications infrastructure and clean water.  The fact that private enterprise has the freedom and apparent resources to go off on these flights of fancy does not mean that we, the citizens of this great society (also known as consumers, taxpayers, employees, stockholders), are best served by this allocation of resources.

There has been growing speculation that the tech wizards are increasingly detaching from reality. They are coming to believe that they are the be-all and end-all of modern existence, in which context Jeff’s proposal is totally rational. But they are in competition for The Goldy Award of enlightenment with the energy industry and the financial industry, both of which are similarly imbued with a sense, no, a Certainty, that They are our salvation.

Still, I sense even the techies have some subliminal reservations about their capacity to save the world. Reports tell us that some of the utopians among them are planning for floating cities that will maintain a high-tech paradise on the high seas beyond the reach of governmental authority. As for pirates, who needs the US Navy? Just a few good robots and video-gamers!

Of course who am I to speak? Who ever thought we would need an Amazon fifteen years ago? Could we live without it today?

Bring on the Drones!

Onward

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