I’m honored to have been asked to join the faculty of The Finance Lab, an innovative collaborative action-oriented thinking project dedicated to envisioning redesign principles through which the world financial system can become a force for sustainable human civilization. The Finance Lab is a joint venture of the Institute of Chartered Accountants in England and Wales, The World Wildlife Fund, and REOS, an international consulting firm. It convenes a diverse team of individuals and institutions from business and finance, government and civil society to initiate and incubate several experiments and prototypes that will practically demonstrate aspects of a financial system that truly serves business, society and the planet.
The first phase of The Finance Lab was held in July 2009 and brought over 200 people together to explore possible future scenarios for finance. These workshops were held in conjunction with the Scenario Planning and Futures Research Group, part of the Institute for Science, Innovation and Society (InSIS) at the University of Oxford’s Said Business School.
The second phase of the Finance Lab is the Open Innovation Lab process, which uses Otto Scharmer’s U process in a series of facilitated workshops, stakeholder engagements and design sessions. It culminates in an event where the Lab’s work will be shared with a wider audience.
I’m heartened and inspired by The Finance Lab, and especially by the Open Innovation Lab process. One of the most important tasks we can accomplish now, in a time of relative calm, is to think deeply, radically, and collectively – in detail – about sustainable redesign of policies, systems and institutions. I hope the Finance Lab can identify healthy redesign principles in sufficient detail so that they can perform a much-needed sapient advisory function when the world’s public and private financial policy makers next face a crisis moment like September-October 2008. Further crises are highly likely; they are not only potentially disruptive, they are also windows of opportunity for meaningful and even fundamental redesign of systems and institutions.
I hope I can help The Finance Lab to consider two further steps. Their first steps seem entirely sound, and I hope that they can result in a deep radical rethinking of the structural design principles of many institutional and policy elements that underlie the world monetary and financial systems.
When this is complete, it seems to me that it will be important to consider scenarios – the most probable likely coming points of stress and crisis that will create openings, windows of opportunity for meaningful changes to institutions, policies and systems. Then there needs to be a careful and detailed consideration of the healthy incremental changes that are likely to be politically and practically possible under the conditions of the most likely scenarios.
In the US crisis of 2008, Henry Paulson, Ben Bernanke, and a few others had to work feverishly, against a figurative “ticking time bomb.” Certain (undesirable) temporary fixes would only delay the day of reckoning, potentially increasing the violence of the next crisis. Other (desirable) fixes would help the financial system transition towards a sustainable redesign. The critically important matter of differentiating these fixes needs to be thought through carefully in advance. I hope The Finance Lab can contribute this kind of proactive sapient evolutionary thinking. It’s a great honor to be a part of the faculty for this worthy project. Here’s the prospectus.
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