Simplifying Complexity A puzzle, a problem, and a mess
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May 27, 2024 Gerald Ashley, Co-founder of St Mawgan & Co, discusses the difference between risk and uncertainty, categorizing issues as puzzles, problems, or messes. He explores the challenges of managing risks in decision-making, the complexities of uncertainty in financial markets, and the importance of acknowledging uncertainties and gathering diverse information for effective navigation.
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Managing vs. Measuring Risk
- Seek diverse information sources to understand the future, accepting its inherent unpredictability.
- Focus on managing risk by anticipating change, rather than just measuring past data.
Messes, Problems, and Puzzles
- Issues can be classified as messes, problems, or puzzles, each requiring a different approach.
- Messes lack clear definitions, problems have defined questions but no definitive answers, and puzzles have solutions.
Japan's WWII Miscalculation
- Japan's WWII strategy against the US was flawed due to overconfidence and unrealistic policy.
- Clear, attainable policy is crucial, especially in complex situations like warfare or business.