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The Final Word - Octomer 2004

By Michael Vincent

26 December, 2006

During the last week Caroline Brasnett, Education Director of RMIA and I have participated in and contributed to a master class in risk management conducted by the CARM Institute and the Sorbonne.  The theme of the workshop was to examine the tools of risk and how they can be applied practically and conceptually.

 

Three concepts were explored over the time, they were, 1. risk finance, 2. reputation risk and 3. cindynics.  Caroline and I both thought the last concept was worthy of sharing.  

 

Cindynics is a word adapted from the Greek word for danger, Kindunos, it is a relatively new scientific field and is directed towards the study of danger and seeks to explain why events happen and what reactions can be expected within a given series of parameters.  It is not a widespread field of study but a few committed individuals are struggling to apply the principles for the benefit of the field of risk management.

 

On first examination, cindynics is over complex and seeks to explain by process common sense events,  I am yet not fully convinced of the validity of the science but am interested enough to have a good look and see if it can be of use in the risk managers tool box.

 

A cindynics framework has eight basic components consisting of a series of principles that seek to explain complexity; a series of principles that explain rational behaviour in complex systems and a working knowledge of the spatial environment within a temporal framework.  This is important because a logical conclusion can be drawn from a reading of the principles that relates directly towards an application in the area of business continuity management.

 

In order to explain complexity, cindynics lists eight principles that allow an understanding and an application of complexity in the social and political environment of today.  These principles are:-

 

1. Networking - is the work of the members of the network producing models.2. Modelling - is centred on the interaction between the members of the network.3. Understandability of complexity - is possible, if we describe a complex system as a set if intangible networks.4. Irreversibility - a time wise irreversibility is a character of the evolution of the network.5. Recursivity - networking is a self production of the network. Action producing itself.6. Self representation - networking produces a self representation of the network.7. Memory and computation by symbols - networking is using symbols for memory and calculation8. Communication - in a network, members of the network communicate only by models.

 

The above principles seek to define rationality and behaviour in complex systems.  Some of the words used above will appear strange at first as they are a literal translation from the French explanation of cindynics.  A closer reading of the principles, exchanging network for society or situation and model for outcomes or behaviour leads to a deeper understanding of the context.

 

Cindynics continues to evolve to meet the needs of its practitioners, as risk managers we cannot afford to ignore of miss potential tools that may be of use.  The science of danger is well grounded in continental Europe but at first glance is not an Anglos philosophy; accordingly it deserves greater attention to see its applicability in the management of complexity into the future.

 

Networking within inter-tangled societies or structures is the task if the risk manager, cindynics has developed five axioms to explain rationality within complexity, these are:-

 

1. Community - an individual is not well placed to manage the complexity, he or she must be part of a community or collective in order to gain an appreciation of the whole network.2. Relations - modelling within community allows for understanding between the members of the network3. Self - the actions of the individuals will built and cement the network.4. Use of symbolisation - communities use symbols to communicate with each other and to exclude the non members of society. This holds good for professions and communities.5. Complexity itself - can be described as a series of interacting networks at different stages of development and symbolisation.

 

Lastly cindynics has developed seven concepts that seek to explain danger and societies reaction to events, these are:-

 

1 Relativity - risk cannot be quantified absolutely, it can only be estimated based on the knowledge and expertise of the parties involved.

2 Convention - measurement is based on the knowledge of the participants in the event.

3 Goals dependency - understanding the outcomes leads to a sense of direction

4 Ambiguity - the interaction of knowledge and measurement to gain expected outcomes.

5 Ambiguity reduction - post occurrence examination and reporting

6 Crisis - is the destruction of networks. Crisis management is the construction of networks substituted for the destroyed networks.

7 Conflict - the need to reduce or increase the level of behaviour based on risk appetite.

 

You have now been introduced to the concept of cindynics please take time to look at the concept and think if it has a use in your toolbox of expertise that is needed to manage risk in the complexity environment of today.

 

About the Authors

Director

Australasian Risk Management Unit

Faculty of Business and Economics

Monash University