Listening this morning to a discussion about the value of a review of the GST sharing regime currently in place, a small part of the GST regime, I was reminded of the  geometric nature of the complications that arise from complexity of a system.

The greater the amount of data, the greater the opportunity for analysis, apparently. However, the greater the amount of data, it usually follows that the level of complexity also increases, and as complexity increases so does the number of interactions, and cause and effect relationships that need to be anticipated and interpreted.

Unanticipated relationships that have an impact on the performance of the system, but have not been “risk-assessed” can create a  huge risk to systems, simply because they are not in the rule-book. The system is supposed to be “fail-safe” so the response to an unanticipated situation is not enabled. Remember Lehmann Brothers, a massive institution that on paper was AAA, but in reality was so complex that risk was not easily assessable except with hindsight.

Finding the needle gets harder as the pile of hay gets higher, and the complexity of hay-stack increases.

How complex is your business model?