The Mythology of Risk

As part of my exploration of the “Myth of the Mind”, of the myths in history, of cultural and comparative mythology, and the exploration of the rich mythopoeian psychological stories hidden in the unconscious Self, I want to talk about the Mythology of Risk in business, in social situations, and money-making enterprises. Because in this tale lies the “lies” and illusions our brains create for ourselves…and the HUGE errors and mistakes we as Humans continually make based on false assumptions and misunderstanding of the constructs we create for ourselves in business and in life.

I’ve worked in technology for 15 years as a software engineer. So I’m not a dummy. But I’ve been perplexed and also fascinated how people with degrees, with years of valued experience, with deep knowledge and even vast intelligence can often fail. It is part of the exploration of the mythology of the mind that requires a “deeper” understanding, so that as we become writers and artists, we can tap into the often irrational truths and symbols leading to even greater truths about ourselves that arise purely from our imaginations and beyond the so-called rational and realistic world.

In working in technology I once worked for a knowledge-based analytical company that based its software on the analysis of collected data from a given industry, which was then used to arrive at predictive analysis that could be sold and used by others in that industry to save time and money in their private business venture shared by all players involved (sorry, I can’t reveal the nature of this industry).

The main part of the business was based on a “risk index”…a sort of non-arbitrary numerical value calculated from the sum of years of collected data from a number of vendors in the industry, which was then pushed through some arbitrary algorithm they had developed that in turn generated a known value. This value was then used to “predict” future “risk index” values and sold to these companies to help them “manage risk” in their fields of expertise. The numerical risk value was used to help those companies make decisions, financial or otherwise, on what they should do in business given specific events. The idea was the risk index would help shield them from something…something “bad” that would negatively impact their business. This “concept and supporting system” was then sold to corporations by the company I worked for and became the premise for many other types of similar benchmarking services.

In the years I worked there I was able to completely rewrite or “re-invent” the mathematical concepts behind similar data systems in the company by engaging a physics professional gaining knowledge of the core non-linear regression algorithms that were supposed to have stood behind the original equations. I was then able to reformulate and recreate NEW formulas and improved math that could be measured quantitatively, and shown to correlate known predictive dependent values with their independent variables from their data. Because their data was so corrupted and distorted over years and years, it took some time to analyse their data, look at outliers, and come up with a middle-range of solutions to extract out the richest datasets available to improve upon the results. Looking at measurable R-squared correlations, I was then mathematically and visually through graphs show the improved results, which they then took their customers for review.

Needless to say their customers were thrilled, as results now correlated correctly to their own positive results in terms of money spent, results produced, time savings accrued, and other correct benchmarking of said results with their competitors. The idea of an industry-wide “best practices” I feel was finally proven by my rewrite and full understanding of the mathematics involved, where before there appeared to be delusions and misunderstanding of the math by previous developers that had worked at the company.

But after the results, I returned to the primary “risk index” concept that the company had for years based its business on, this being a trademarked hallmark of the company itself. But when I went to apply my math and the data to their risk index values stored in the database, I suddenly noted a terrible problem. Their so-called Risk Index had almost NO CORRELATION with anything in the data. And so I presented this to the stakeholders of the company, asking them to now provide me with the basis for the meaning behind risk in this industry, so I could possibly find a measurable idea for risk, defining it or redefining it as I had their other predictive equations.

The result? They had no idea. What was the “risk” implied and measured in the Risk Index, I asked? But they simply could not define risk. They had always assumed the index they created fully defined it.

They then brought in the degreed physics professional who understood my original question, where as the business did not still perplexed that such a question should be asked of a “trusted and believed” accepted, industry-wide risk index value. After much debate they could not tell me even what they perceived risk could or should be beyond it being something “bad”. Even the PHD’ed mathematician could not help them or myself answer the question of WHAT was being measured here. I had to chuckle inside, as it presented a deeper problem in the company which no one was willing to now face or address. So I let it go….and we kept the risk index exactly as it was, the flawed value it was.

But this questioning of “risk” and what it measured got me questioning a bigger problem in business…….what do we truly know? What is it about our minds we obfuscate logic and knowledge for belief at times, even in highly technical industries and proven and validated studies, like Climate Change, for example. What is it about our brains that even intelligent people are so often ok denying truth?

Are we so fearful of losing money or our egos in business we are ethically ok selling lies rather than seeking truth? It appears to be the case in 2017 and it had me wondering where I stood in all this.

The question remained, what is risk? The people before me simply could not say, except that the Risk Index defined it. But if we reference truth like this – truth from perceived truth self-referentially – what basis does it now stand on but an untruth?

It turns out the company’s “Risk Index” was based on perceived, intuitive, industry wide beliefs with no basis for factual or mathematical truth or basis beyond experiential or “intuitive knowledge”.

But the math correlation proved their intuition wrong. The Risk Index simply had one of the poorest correlations to independent variables I had ever seen!

How many companies and businesses today still do this circus trick of selling snake oil to people? How many believe the myths of their own failed products so they can sell them more easily? Should we dare to ask or even answer that question?

That’s when I realized that a company I had worked for had cobbled together human-flawed, industry wide and accepted intuitive knowledge to define “risk” without taking the disciplined approach to define it based on Big Data, mathematical analysis, results-based studies, or scientific investigation. They in essence created their own mythology around risk and were ok living with that even if it “risked” their whole business reputation later knowing they were selling a lie.

When I then asked what is “Risk” to them and what comprised that risk, no one could answer it. It wasn’t even about money loss or anything measurable or quantitative. To the business people it was simply what they felt it should be…..some abstract value cobbled together from random variables in their data.  But instead of admitting their error their egos simply could not accept it. So they refused to admit the problem and stubbornly kept the Risk Index exactly as it was.

This then opened my eyes to the problem of Humanity…….that we are very much living by illusion, quite often, and comfortable with the illusions and myths our minds creative.

The Mythology of Risk is what truly mattered to them, just as we as children so much enjoy believing in trolls, Giants, and fairies. We want to believe in myths. Without them our brains would die….die from lack of meaning.
To challenge this Risk Index with the business owners had created an uncomfortable “cognitive dissonance” later. The owner especially seeing the truth….at least he seemed to face fully with maturity the problem, though he later denied it.

We see this dissonance more and more in business, in our faith, in our family beliefs, in beliefs about our futures and pasts, and who we truly are. This dissonance was the uncomfortable feeling that needed to be tamped down instead of the elevation of truth or accepting the real possiblity they might be wrong.

The fact that no one could show me a single data point to use or measure that risk……risk that could be quantified in say money spent on a project or some failed aspect of the business venture it measured, some measured rate or failure or common number of events or results being correlated…….All that showed me they had created what the mind of the Self creates all the time in our daily lives – the self-referential truth we all create in our brains to rationalize the meaning of our own existence. We all do this. I do it, too.

It is then I realized, such is the nature of knowledge and of truth itself, that epistolic views of knowledge and measurements will NEVER be found to correlate truth to anything 100% knowable and verifiable as long as we are human beings and have such flawed brains. 

Does this mean there is no truth, no knowledge? No. It simply means that truth itself has changing value, differing levels, and a subjective self-referential yet social value that lies way beyond the objective value.

“Knowledge of Risk”, if it had been measured in this industry, may have shocked the people employed around it, because risk could have turned out to be trivial risk or God forbid, non-risk (no basis for its measurement found and thus no business model. lol). Risk could even have hidden value or monetary gain later, a reversed value that’s counter-intuitive. Risk could in fact have been defined as not perceived logically but in fact correlated to completely unrelated fields parallel to the industry in question. Risk simply could have turned out to be a numerical value that WAS available to this company waiting to be correlated in some known database. But because of their inability to define it or be open to its new possibilities, they lost the opportunity to learn from its deeper implications.

All these are the flaws of very intelligent people, I’ve found, in technology and in engineering groups I have worked for over the years. Huge projects and goals often get defined by intuition that then drive massive lies politically or financially. We see this now in the Age of Trump. CEO’s  and experienced politicians and PHD’s are not free from its traps. Neither are mathematicians or software programmers. If the money is there the Mythology will continue to be fashioned around it until at some distant time the lies get exposed by creative, intelligent people seeing and seeking the truth with courage and conviction.

The politician or company may then comes tumbling down, as it should if it’s been built by lies for too many years. We are all flooded by illusions of life, of Nature itself, of the math itself, and the lies we tell ourselves and our kids everyday. The “winners” are those that both acknowledge their ignorance but are humble enough to listen and question themselves continually.

But I see now that the TRUE innovators and the people that redefine domains of knowledge won’t be the rich, the degreed, and the intelligent, but the creative and innovative loners and rebels that challenge it all, looking in objectively on the failed systems and the naive people that blindly run them who quite possibly may be too arrogant or authoritative or knowledgeable to adjust to the bigger more relevant truths that quite often evolve past them.

– The Author

 



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