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Countering the Threat from Terrorism

March 14, 2018

In this blog, and in the one following, Tony Diggle looks at two recent publications relating to the work of the Millennium Project, a voluntary think tank of futurists, scholars, scientists, business planners and policymakers worldwide. 

This first blog looks at the proceedings of an Advanced Research Workshop on the “Identification of Potential Terrorists and Adversary Planning” held in Washington DC.

In July, 2016, under the auspices of the NATO Science for Peace and Security Programme, an Advanced Research Workshop on “Identification of Potential Terrorists and Adversary Planning – Emerging Technologies and New Counter-Terror Strategies” was held in Washington DC. It was organised by the Millennium Project USA and the FIRST2T group, Israel, and the updated proceedings were published last year. They make sombre reading.

Introducing the volume, Jamie Shea, a NATO Deputy Assistant Secretary General, pointed out that twenty years ago terrorism was problem for a limited number of countries and followed a predictable pattern. Nationalist groups such as the IRA had well-known political agendas. Now terrorism had become a universal challenge, with many more groups, increasingly networked, and some of which like ISIS had acquired a global outreach and appeal. Whereas the old terrorists focussed on state institutions or representatives, the new brand was more focussed on the liberal way of life and all its manifestations, in other words the ordinary man in the street – everywhere.

In a presentation from the two organising groups on potential counter-measures made by Ted Gordon and others, attention was drawn to a worrying vulnerability: the proposed approaches for monitoring, detection, trend analysis and archival resourcing currently under consideration by the counter-terrorism community all depended on the continuous availability of electricity. This made them vulnerable in toto to hostile cyber attacks. Gary Kessler reminded the workshop that shortly before it was held, NATO had officially recognised cyberspace as an operational domain, adding this dimension of warfare to air, sea and land.

Paul Werbos, former Program Director, National Science Foundation, USA, underscored this further in addressing the consequences of “cyberblitzkrieg” on electricity and other critical infrastructure. Recent releases of information widely reported in the media had revealed among other things detailed information about how the Stuxnet type of cyberattack could be used to destroy large electric power generators. The potential damage of such an attack on a number of big generators in the U.S. simultaneously could be comparable to that of a major Electromagnetic Pulse Event (EMP). Mr Werbos quoted Trent Franks, a Congressman with access to classified information, as saying in discussing EMP:

“Your folks are only worried because you do not have all the facts. If you had all the facts, you would be terrified out of your minds.”

Fortunately technological solutions were available, but required tougher compliance and regulation to be implemented.

In short, technology by itself might cause as many problems as it solved when it came to trying to prevent terrorism in the future. A wider sweep at the problem was required.

But what was the problem? Philippe Destatte, Foresight Associate Professor at Paris-Diderot University, pointed out that terror was inherent to violence and war. In Julius Caesar’s “Commentaries on the Gallic Wars”, he told of how his brilliant and brutal attacks both retained his friends in their loyalty, and by fear, obliged the wavering to accept offers of peace. Although terrorism might seem an immoral form of war, the profound collapse that the moral code of behaviour underwent in almost all wars on the part of all parties in the 20th century, including the targeting of civilians, showed that the difference between terrorism and other forms of war was one of interpretation. Professor Destatte referred to Guy Standing, a professor at the University of London, who had described a large part of the adult population (at least a quarter) as alienated, anomic, anxious and prone to anger, in political disengagement: the precariat. Professor Standing had written:

“A group that sees no future of security or identity will feel fear and frustration that could lead to its lashing out at identifiable or imagined causes of its lots.”1

The context was explored further by Adrian Pop, Director of the Centre for Regional and Global Studies, Bucharest, Romania in a presentation focussing on the security challenges on the south-eastern flank of the Euro-Atlantic border. In a period of economic recession and high unemployment, increasing numbers of European citizens were disillusioned by what they viewed as mainstream government’s inability to protect them from foreigners who threatened their values and undermined their economic development (irrespective of whether there was any justification for such a position). Yet in 2014, the countries with some of the highest levels of internally displaced peoples had the highest numbers of deaths from terrorism: Iraq, Pakistan, Afghanistan and Syria. These four countries were all accessible to Europe by land via its south Eastern flank, and this had become a transit corridor for millions of refugees. More than anecdotal evidence suggested that refugee camps could serve as breeding grounds for terrorism.

Recommendations made by the report to deal with the threat included engaging sources of potential terrorism in the political process and inter-religious dialogue. Countering social media terrorist propaganda remained of key importance, and the efforts of a UN Working Group focussed on this area needed to be developed further. Initiatives aimed at educating people (including people with a “Western” mindset) to “see the world as others see it” needed to be increased not scaled back as was too often the case. An “all-of-society” approach was needed, and the need to develop a system of values such as individual liberty, equality, social coherence and solidarity crucial for the future development of counter-terrorist measures.

All this is complex, and far easier said than done. In this brief review, I have only been able to scratch the surface of an extremely dense and probing publication that contained fifteen papers in all. The report underlined the seriousness of the problem. The proceedings are available in hard copy and in electronic format. Full bibliographic details are given below.

“Identification of Potential Terrorists and Adversary Planning – Emerging Technologies and New Counter-Terror Strategies” ed. by Theodore J GORDON and others. Proceedings of the NATO Advanced Research Workshop, Washington DC, 24th-27th July, 2016. IOS Press, Amsterdam, 2017. ISBN 978-1-61499-747-4 (print), 978-1-61499-748-1 (online).

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  1. STANDING, Guy, “The Precariat: The New Dangerous Class”, Bloomsbury Academic, London, 2011, pp. 24-25.

Written by Tony Diggle, SAMI Associate and member of the UK Node of the Millennium Project. He writes in a personal capacity.

The views expressed are those of the author and not necessarily of SAMI Consulting.

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Why boards fail to address risk

March 7, 2018


Does your board spend as long debating risk as it does strategy? Both are estimates of opportunity and threat in an unknown future environment. Both require sound judgement and a keen appreciation of where the organisation is headed, yet there is ample evidence that many boards see risk only through the lens of business continuity, control rather than uncertainty. Those who do appreciate the concept of uncertainty, often regrettably seek certainty in the wrong places. Misplaced certainty and ignorance of risk have been evident in three recent high profile cases of poor decision making by boards. I shall look at Carillion, Oxfam and KFC.

Carillion collapsed spectacularly because the board failed to fully understand the financial predicament it was in. Finance heads and external auditors claimed the business was technically solvent, when in reality it wasn’t. Institutional investors and hedge funds knew there were problems long before the collapse on 15 January 2018 yet none of the board directors queried this. The board collectively trusted assurances that the business was fine right up to the sudden profit warning of July 2017, at which point the CEO was fired, and the ship began sinking fast. Groupthink was a factor, as was confirmation bias and over-optimism, all of which academics knew 40 years ago can cause systematic bias leading to errors of judgement.

Oxfam has suffered significantly through revelations of unethical behaviour among its field agents over seven years ago in a disaster relief operation. An internal enquiry decided against transparency in order to protect the reputation of the charity, yet this decision, now revealed, has had the opposite effect with an immediate impact on donor trust. The board should have known that secrecy would be a reputational time bomb. Was this down to cognitive dissonance, they just didn’t appreciate the severity? Or was it down to anchoring and adjustment based on familiarity with resolution of previous staff misdemeanours? Was it perhaps an escalation of commitment and a determination to justify a course of action because too much time had passed?

KFC has lost a lot of customers and been forced to close branches due to food shortages. This followed a switch in chicken distributor, a cost saving in logistical overheads. Unfortunately the new distributor (DHL) could not replicate the branch supply schedule of the previous distributor (Bidvest) and hence stores ran out of stock and had to close. Did the board of KFC question the rationale of changing distributor or did the head of logistics reassure them of the upside cost saving rather than the downside supply risk? It turns out that Burger King had previously switched to DHL but quickly reverted to Bidvest when they saw that it wasn’t working. Did the KFC board use this information or were they hypnotised by obedience to authority or attitude polarisation?

What should boards do to make better decisions and protect value? It would be nice to think that codes of governance emphasised the need to guard against cognitive bias, especially as the dangers have been known for over 40 years. A recent report by the Leadership Foundation for Higher Education found that governing bodies of universities do not take sufficient notice of heuristics and biases. This is true in the corporate world where ‘groupthink and polarisation run counter to the predictions of rational choice decision making’. Boards need to appreciate the stewardship risk of misplaced certainty: to consider the personalities and agendas that collide in collective consensus.

Written by Garry Honey, founder of Better Boards, CEO, Chiron Reputation Risk and SAMI Associate. The views expressed are those of the author and not necessarily of SAMI Consulting.

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How can the government address social care funding?

February 28, 2018

A new year and another social care green paper consultation.

Everyone agrees something needs to be done but no-one can agree what it is – we have been here so many times before.

We can go back to the Royal Commission in 1997; to the Wanless Report for the Kings Fund; to the Labour ‘death tax’; to the Dilnot Report and the care cost cap and to the last Conservative manifesto and the ‘dementia tax’.

In a sense, despite how peculiar and perverse our system of funding social care is, nothing has happened that has impacted on the public consciousness to the extent that a government has actually been forced to make significant changes to the system.

Maybe the current NHS crisis, caused in part by bed-blocking and elderly patients stuck in wards, is the tipping point, or maybe once we move out of “winter pressures” it will all settle down again.

Tipping point

Let us suspend disbelief and assume that we really do have a tipping point. How is the government addressing it beyond perverse tinkering with funding mechanisms?

Allowing local authorities (LAs) to increase council tax to add a little bit towards social care funding is a good case in point.

The areas with the lowest numbers of privately funded care home places are the same as the areas with populations which receive the biggest council tax rebates.

LA-funded places are cross-subsidised by private payers, and the council tax increases are a drop in the ocean compared to the post austerity cuts that have been imposed on LAs.

Department of health

The prime minister has recently reacted by addressing the chronic under-naming of Jeremy Hunt (thanks to NHS Network News for this satire) by making him secretary of state for health and social care.

But in fact the department of health (DH) has always been responsible for social care policy.

The problem is that the new Health in Construction Leadership Group (HCLG) (CLG also suffered from under-naming) holds LA budgets and, overall, HMT controls the money – it was HMT who effectively vetoed the care cost cap.

Expert panel

To make things even more complicated it was the cabinet office along with DH that announced the commitment to a green paper being published this summer.

Mid-November they announced members of a new expert panel to support its deliberations.

As you would expect Sir Andrew Dilnot is to be on the panel as are the insurance industry.

Nothing wrong with that, though I do wonder how they haven’t lost the will to live given the number of times they have been asked to do the same thing.

Social tax

Meanwhile in policy wonk world we have suggestions for a hypothecated social (and possibly NHS) tax.

HMT always resist these for two reasons: first they like to have the freedom to decide how to allocate the nation’s resources and second because ring-fenced budgets have little incentive for efficiency savings as their income is guaranteed.

The other suggestion doing the rounds is for pensioners to pay NI contributions.

Apart from the fact that NI starts at a much lower base than income tax (which would bring many more lower income pensioners into the tax bracket), can anyone really see a Conservative government alienating its core vote in this way?

If the ‘dementia tax’ was a step too far, this policy is in another league altogether.

Questions and answers

If we have reached a tipping point, is there an answer? These are the key questions…

How do we get more money into social care?

How do we deal with the perennial problem of NHS and social care silos shifting budget costs to each other?

And how can at least some of the perversities of the current system be resolved?

I would bring in the care cost cap because it would encourage the development of long-term care insurance bought by the working population which would eventually lead to more self-funding entrants to care homes which would give more money to cross-subsidise LA-funded entrants.

I would merge LA and NHS responsibilities for health and social care.

This is already happening in Greater Manchester.

The result has been that delayed discharges from hospital have been almost halved; care workers are being paid more (avoiding recruitment problems) and all of this has saved money overall.

And I would give DH the money from HCLG – not just rename it.

Written by Richard Walsh, SAMI Fellow and first published in Cover magazine, January 2018.

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ESPAS Conference 2017

February 21, 2018

I spent an interesting two days in Brussels at the ESPAS annual conference ‘Global Trends to 2030: The Making of a New Geopolitical Order?’ on 22-23 November 2017. ESPAS is inter-institutional collaboration between the European Commission, the European Parliament, the Council of the EU and the European External Action Service, which aims to monitor global trends and offer strategic foresight to the EU’s decision-makers.

The focus this year was on Europe’s role in a new world order, and the conference’s accompanying publication: Shaping the Future of Geopolitics contains a rich collection of over 30 original, forward-looking, anticipatory essays from the speakers. These were from European institutions and also from external perspectives – Russia, Middle East, China, Brazil, USA, Australia, and representing Africa. As last year a star contributor was Aaron Maniam from Singapore. One session was titled “What if winter were coming? Is Europe prepared for the security challenges to come? Which the panellists all answered with “no”.

The second day explored soft and hard power in this context, through the lenses of international regulation, of an economically interdependent world, and the future of warfare..

Cat Tully of SOIF organised an interesting breakfast meeting to discuss the successes and challenges of applying foresight in organisations – I will circulate the results later – and she also chaired a spoof “ESPAS 2035” interview with the Secretary General of the new European Congress formed after BREXIN in 2029.

Additionally, Angela Wilkinson had been commissioned to write a ‘Strategic Foresight Primer’, an easy-to-use guide on strategic foresight, which was given to all delegates.

Videos and photos of the event are available on the ESPAS website and, if you are on twitter or medium, you can read more about the conference at #ESPAS17 and

Written by Gill Ringland, SAMI Fellow Emeritus.

The views expressed are those of the author and not necessarily of SAMI Consulting.

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Five key lessons for boards from the Carillion collapse

February 14, 2018


The sudden collapse of a business like Carillion has raised questions about financial reporting controls, auditor vigilance and exactly who should have acted sooner. The government is embarrassed by exposure to public infrastructure projects across several departments, while many smaller sub contractors will never be paid for work they’ve done. The board of Carillion must bear much of the blame so what could they have done to avert this crisis?

  1. Accept collective responsibility – Boards are made up a experienced directors selected on merit to deliver commercial success in the form of profit and shareholder dividend. The executive members operate the business on a day-to-day basis, while the non-executive members offer balance and wider perspective tasked with holding the executive to account on behalf of the shareholders. Together both groups collectively share responsibility for the business model, its strategy and risks. it is not acceptable to blame the Finance Director or auditors alone, the board is a culpable entity.
  2. Separate governance from management – Distinction is often hazy but it is worth quoting from the British Standard for Effective Governance of Organizations (BS 13500): ‘Management is about getting work done, whereas governance is about ensuring that the right purpose is pursued in the right way and that the organisation continuously develops overall.’ A board should know if suppliers are being paid late or that bill payments are being made with credit: a cash-flow problem demands attention, not as an emollient to shareholders, but to address inherent structural problems.
  3. Respond to warning signs – Some are obvious but not all: a rapid turnover of chair or FD is pretty obvious and demands question, but so too does hedge fund activity in shorting your share price. If professional investors are betting on your share price collapsing in the future what information do they have that you don’t? Boards can suffer from optimism bias and ‘groupthink’ and justify ‘inside knowledge’ for why they know better, but these viewpoints can prove to be delusional. Responsible directors ask probing questions even at the risk of making others around the table uncomfortable.
  4. Challenge experts – Just because the Head of Risk says that risk is being managed it doesn’t mean he’s right. Risk is not a concept that all directors understand equally and that is a good thing. Perspective is a valuable tool in risk appreciation, especially as once recognised controls for handling it can be pretty straightforward. The same goes for assertions from the FD, Head of Internal Audit or indeed Head of Sales. Future business is never certain until the cash is in the bank. This is something Enron learnt to its cost. Even Tesco now understands that external auditors can be wrong also.
  5. Prevent the death spiral – This can be quite fast and consists of five stages: it starts with shares being sold in volume forcing the price down and reducing market capitalisation. Lenders get nervous and refuse further loans so the cost of borrowing increases. Ratings agencies downgrade your stock and cash flow stalls, this is the liquidity crisis often known as the Wall. Death can be averted through cash injections but white knights are scarce, the fifth and final stage is administration. Boards need to prevent this death spiral through listening to investors not just their own executive team.

There is an ominous sixth lesson for boards as well: avoid performing so poorly as to attract the attention of a Commons select committee. MPs will ask probing questions you should have had the temerity to ask, a press and wider public will be amazed at your lack of scrutiny. In order to take ‘robust decisions in uncertain times’ collective leadership must be competent and capable.

Written by Garry Honey, founder of Better Boards, CEO, Chiron Reputation Risk and SAMI Associate. The views expressed are those of the author and not necessarily of SAMI Consulting.

If you enjoyed this blog from SAMI Consulting, the home of scenario planning, please sign up for our monthly newsletter at and/or browse our website at

The Future of Work in Cities

February 7, 2018

On a rather blustery and damp day at the end of January, a large group of people gathered at City Hall for the Centre for Cities launch of the 11th edition of Cities Outlook, their annual analysis of economic data for the UK’s 63 largest towns and cities.

IMG_0560© Cathy Dunn

This year’s standing room only event – not sure whether it was it the lunch provided, the view or the topic which encouraged its popularity – took as its focus The Future of Work in Cities and the impact increasing automation may have.

The session was opened by Chief Executive, Andrew Carter, who gave a short summary of the key points in the report, which is a comprehensive overview of UK cities and one of the first to look at them from an intra-national perspective.

With regard to the rise of automation, it is clear that northern cities will be more affected with 1 in 4 jobs likely to be lost rather than the 1 in 7 loss projected in the south. And even between cities across the UK there is a marked variation, this is something that we as a country need to act on now rather than waiting.

Gemma Tetlow, FT Economic Correspondent, looked at the data from a national perspective, saying that overall 60% of the UK population are positive about automation but are, nonetheless, worried that robots will destroy jobs in the coming years. She voiced concerns about whether polices and funding are really available to support the changing environment and also the impact that the Brexit effect has on the ability of organisations to commit to any one particular strategy.

We then heard from Marvin Rees, Mayor of Bristol, who sees cities having an increasingly important role in opening up of resources with place leadership at a local level growing. He sees the ability to harness the collective possibilities of a national and international network of cities as growing in importance in the coming years and indicated that he felt the cost of getting this wrong might turn out to be higher than we may expect.

And finally, Naomi Climer, President of the IET, discussed how the potential for inequality is clearly there but we should remain optimistic overall as the possibility of creating meaningful work does exist. Investment in technology also needs investment in skills and there are good examples of organisations doing just this and enhancing the skills of their workforce. This led on the topic of education and how best to teach schoolchildren about automation, programming and coding and whether it is possible to have a root and branch overall review of the educational curriculum rather than constant (and largely ineffective) tweaks.

We then followed up with a lively question and answer session covering a range of topics from Universal Basic Income to the environmental impact of technology. There was, though, considerable focus on education and training and the need for access to lifelong learning along with the previously mentioned curriculum overhaul. In this year of engineering we should indeed spend time and effort on the requirements for STEM skills and encourage their take up at primary school in order to build a skilled and effective population in years to come.

Written by Cathy Dunn, SAMI Principal.

The views expressed are those of the author and not necessarily of SAMI Consulting.

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Reporting risk

January 31, 2018

In this blog, Garry Honey, SAMI Associate and CEO of Chiron Risk, looks at how risk is reported and examines some alternative ways of mapping risk.

Disclosure of risk has always been a challenge for listed companies, this was recognised by the FRC when it introduced ‘materiality’ and ‘proportionality’ in previous iterations of the corporate code. The financial crash of 2008 prompted the code to improve risk reporting so the past 10 years have seen more emphasis on this. A new FRC publication on Risk & Viability reporting, from the Financial Reporting Lab, acknowledges the way risk reporting has evolved of late. Apart from the ‘inherent tension’ between revealing useful information to investors and highlighting weakness for competitors to exploit, is the underlying question of confidence and competence.

In disclosing risk, investors expect to see a strategy in place to handle it together with a management team capable of delivering it. Risk is finally being rehabilitated alongside strategy, something the Strategic Report was designed to encourage. Risk had initially been treated as a compliance or control function, a topic with potential to unsettle investors rather than inspire them. In talking to investors the Financial Reporting Lab has finally confirmed what has been known in the City for years: namely that investors expect companies to take risk so they look for a mature conversation about risks consciously undertaken in order to deliver an attractive return on investment. Risk is an inherent part of the investment conversation; combined with strategy it forms the vision of a profitable future for the company.

The Risk & Viability report, based on consultation with investors, sets out areas in which risk reporting can still improve. The main one is the challenge to convince investors that the management team know their own limitations, being realistic about what can and cannot be achieved. There are only four strategies for tackling risk (avoid, manage, mitigate and transfer) but how many risk reports actually match each principal risk to an appropriate handling strategy? Admittedly much risk reporting in the UK also has to take account of jurisdictions where reporting rules are different, but this comes back to the purpose of risk reporting rather than liability in foreign courts. It should not be left to a regulator to specify the types of risk to be disclosed, a company should decide what disclosures would be beneficial to investors and other key stakeholders.

Communicating risk that is both useful to investors and compliant with regulators should not be impossible. Unfortunately much risk reporting still relies on the Heat map or risk matrix (see fig 1). This categorises risk according to probability and severity which satisfies insurers and CFOs as it relies on financial cost or loss as the key spatial determinant. Presenting top 10 principal risks on a heat map focuses attention on the urgent and important risks, and as such is a valuable tool in board meetings to determine priority tasks. Investors, however, expect more than this as it only gives a snapshot in time: it doesn’t take account of the dynamics of risk and certainly doesn’t indicate what management are going to do to combat it. This model is rather outdated and there is a better model which gives investors a more reassuring picture of response to risk.

GH Blog 30 Jan Fig 1fig 1

This advanced model has found favour among a number of corporations keen to show investors that there is some strategic thinking about risk. In short it moves the conversation away from just identifying risks as a passive statement towards an approach known as active risk management. This is shown in fig 2 which employs two different axes: ease of control and ease of prediction. In this way risks can be shown in a way that makes the response strategy self-evident: mitigate, measure, monitor and manage. The latter category naturally covers risks that are easier to control or predict. The significant difference is between the hard to control but easy to predict and their opposites the hard to predict but easy to control. This distinction helps differentiate between financial and strategic risks, some of which are shown as examples in fig 3.

GB blog 30 Jan Fig 2fig 2                        GH blog 30 Jan Fig 3fig 3

The conversation about risk which follows the mapping thus focuses on increasing control of those risks identified as financial, and increasing prediction among those identified as strategic. In this way more of the risks in the yellow boxes are migrated to the green box as they ultimately become operational and by implication manage-able. This approach allows a company to show that effective risk management is not only about increasing control but also increasing predictive skills through consideration of alterative futures via foresight. Risk as future uncertainty deserves this approach and investors welcome it.

The Risk & Viability report from the FRC also found that investors want to know how companies are preparing to address some of the generic business risks such as Brexit impact. It will not be enough to show that the risk has been identified or that contingency has been made for a Hard Brexit or ‘No deal’ exit from the EU in 10 months time. Investors want to see not only that alternative outcomes have been envisaged but that each alternative scenario is described within the context of a compensatory risk appetite adjusted to the marketplace. The dynamics of risk as a future outcome require new reporting that is not afraid of discussing alternatives. We live in uncertain times.

Written by Garry Honey, CEO, Chiron Reputation Risk and SAMI Associate. The views expressed are those of the author and not necessarily of SAMI Consulting.

If you enjoyed this blog from SAMI Consulting, the home of scenario planning, please sign up for our monthly newsletter at and/or browse our website at

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