"We always did that", a healthy
habit?
The
butterfly effect is a concept of chaos theory. The idea is that given initial
conditions of a particular chaotic dynamic system that is sensitive to the
initial conditions, any small discrepancy between two situations with a small
variation in the initial data leads to a situation where both systems evolve in
certain aspects of form completely different. Any very small and imperceptible
event in one part of a system can cause a great change or a magnified effect elsewhere.
The
video shows how an oversight leads to disaster when three trucks loaded with
sugar cane fall into the river. In the balance of loads, a few grams could be
balanced with the combined actions of the river and the wind, but when this
does not happen and the imbalance gradually grows, the end is inevitable. The
three trucks fall into the river and the theory of chaos is fulfilled.
In
every space where people live or are permanently present, adverse, destructive
events can always occur, which may be natural or induced by carelessness or bad
intention. These events include earthquakes, fires, riots, explosions, and even
totally human actions such as kidnappings, irruption of terrorists or demented
shooting and killing (common in the United States). In order to face these
situations, it is understood that there are security plans and protocols,
responsible for the execution of these plans, equipment, continuous training,
awareness talks, and much more.
In
financial theory, it is known that greater risk of an investment in financial
assets (bonds, stocks and others) must be accepted. There is a limit situation:
absence of risk but low profitability when buying Treasury bonds; In this case
you should only wait a while to gain access.
In real
life, there is no such favorable neutral point, the only way to avoid risk
simply is to avoid all action. Nothing is done, there is no risk, and where is
the business, the company? In the case of trucks, they are not moved from one
bank to another but there is no income. To win you have to accept the risk.
This does not mean that it can ignore the risk, neglect safety measures, give
extreme importance to the practice of "we have always done so", the
same as did the trusted operators of the barge or truck that moved the trucks.
A
routine activity for a risky process is cost-effective because activities that
require time and money are avoided, which increase costs. Thus, no security
measures are employed, no training is provided to those responsible, no
equipment is spent on safety and emergencies, no talks are given to staff,
there are no alternative plans or plans B because they make them demand time.
Less cost, greater profitability; But when an adverse event can occur, that
profitability disappears. The profitability of a routine action is lower than
is assumed when the risk activity is assumed and the risk is incorporated into
the profitability calculation.
Utility
is "normal" when acting under the principle "we have always done
so"), when there is non-concern about risk. When you accept it, you have:
Expected Utility = Normal
Utility * Probability 1 + Losses * Probability 2
Some
numbers: Normal utility = 100, probability 1 = 99%, probability 2 = 1-99% = 1%;
Loss = 5,000
Then,
expected profit = 100 * 99% + (-5,000 ** 1%) = 49. The profit without assuming
the risk is 100, now it's only 40. It
seems silly to win less, but winning 49 is much better than losing 5000.
The
utility is smaller but it controls or reduces the possibility of occurrence of
the disaster, which is very expensive. The loss of three trucks by
carelessness, by doing "always things like before", is not any fun
situation.
In your organization, do you do what is necessary not to "lose
all three trucks"?
Related
Video