Some basic references for a talk that I delivered to the Aon Benfield conference “Risk Re-imagined” (Gold Coast, Australia, September 18-20 (2017))
IRGC Concept Note “Preparing for Future Catastrophes”
https://www.stat.berkeley.edu/~aldous/157/Papers/Prep.-for-Future-Catastrophes_final_11March13.pdf
Global Challenges Foundation
Early Warning Signs for Critical Transitions
Marten Scheffer et al Nature 461 (2009) 53 – 59.
Exogenous and endogenous events
Didier Sornette “Endogenous vs Endogenous Origins of Crises” (arXiv:physics/0412026v1 [physics.soc-ph] 4 Dec 2004)
Decision making and planning under low levels of predictability
Spyros Makridakis & Nassim Taleb International Journal of Forecasting 25 (2009) 716–733.
Modularising the banking system
Andrew G. Haldane & Robert M. May “Systemic risk in banking ecosystems” Nature 469 (2011) 351- 355.
Ecology for bankers
Robert M. May, Simon A. Levin & George Sugihara Nature 451 (2008) 893-895
Bob May and the stability of complex networks
May, R. M. Will a large complex system be stable? Nature 238 (1972) 413–414. See also the latest on this:
http://www.imsc.res.in/~sitabhra/research/ecology/foodwebs.htm
http://www.nature.com/articles/ncomms12457
Strategies for change
Test your models – for instance, by using adversarial examples (inputs to machine learning models that an attacker has intentionally designed to cause the model to make a mistake).
Use diverse teams (especially, teams where the individual members understand and can take over each other’s roles).
Learn from past experience, and build that memory into management and decision structures.
Along with the above, avoid “single action” bias – the comfortable feeling that, once you have tackled and solved a problem, the problem will not recur.
Adopt new and more appropriate management structures. “Participatory adaptive management”, for example, has been shown to be effective in making quick decisions in complex social-ecological environments.
Think carefully about whether management, like investment, needs to be “passive” or “active”.
Share information.
Find ways to beat information concealment and information bottlenecks, perhaps by providing multiple (redundant) pathways for the transmission of information, or by filtering out the less important information.
Recognize that decisions often need to be quick, and that the most effective heuristic is often to take account only of a few major bits of information.