The world of today is more connected and interdependent than ever. What happens in one corner of the globe is known the very next moment in most other parts of the globe within seconds. This is possible thanks to social media and the internet.
However this super connected world also has led to some unintended consequences. Now, a stock crash in some particular market will be known immediately to other markets around the world, thus potentially leading to panic.
Also, diseases like Ebola, which used to be contained and local to some locations, can now spread with alarming speed around the world because global travel is very convenient and fast.
As demonstrated by complex system studies, some policies have had repercussions which were totally unintended. For example, the requirement to spend 50% of the corn grown in the US to produce 10% of gasoline has had repercussions in many corners of the world by driving up food prices. This has led to events such as the Arab spring.
It could be worth exploring localized solutions to how societies can adapt to reduce some of the high risks brought about by the globally connected world of today.
“Do things ever go wrong?” This seems like a silly question. Of course they do. But, often, one does not take this into consideration when making decisions.
One has to realize that the human mind has several drawbacks and one does not really know a lot. Our brains have not yet evolved to completely overcome our primitive impulses and ancestral monkey-like behavior and thinking. There are things that are:
- unknown. These are “known unknowns”.
- “unknown unknowns”. These are things that take us completely by surprise
When thinking of how something will pan out, along with any potential positive outcome one needs to consider the risks and all that could go wrong. Murphy’s law states:
“Anything that can go wrong will go wrong.”
– Murphy’s law
With this in mind, one needs to minimize the exposure to negative effects. This principle can apply to many things in our daily lives.
For example, in finance, carrying debt is sure to cause problems in the future. So, it may be a good idea not to carry any debt. In software engineering, having poorly designed and unclean code in a project causes major problems down the road to whoever ends up maintaining the project. So, it may be a good idea to follow clean code principles and have clean design from the outset.
Similarly, there are many other areas of life, like family, career, etc where the principle of reducing exposure to negative effects can be applied.
Often, using common sense can be a great way to go about assessing risk when dealing with any situation.
For example, companies individuals carrying debt necessarily carry risk, which they may be conscious of or which may lie in their subconscious and prevent them from having a good night’s sleep.
Similarly, when building anything, engineers have to keep assessing risks using some metric or heuristic, which may be picked up from experience or training.
When dealing with risk, it may often be a better proposal, from a long term perspective, to avoid risk than to try to manage it.
For example, it is often better from a financial planning standpoint to avoid debt, which adds risk, than to have debt and try to leverage it and make a spread.
The same avoidance of risk applies in many other fields:
- software where it is advisable to avoid bad design and bad coding to avoid technical debt which adds future risk.
- aircraft design which has, over the years, learned from it’s past failures to become very safe by avoiding risky design and procedures
There are countless other examples where this principle applies.