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The “New Normal” Requires A Different Approach

Approaching non-linear threats in a linear manner does not work

By Sponsor: Strategic Treasurer | Updated on February 01, 2012

The New NormalThe financial crisis has created a general recognition that unpredictable threats can arise in unexpected combinations. This is the ‘new normal’. Commonly heard phrases include “no one could have predicted this…” and “it happened far faster than has been experienced before”. These threats arise in manners that can be called non-linear. Despite progress, treasury groups remain substantially unprepared.

Assumptions on PreparationAs we enter the fifth year of the financial crisis period it is surprising, at a strategic level, that nearly all treasury groups continue to adopt a linear approach to address non-linear threats. There is an assumption that it is impossible to be prepared for unpredictable events. Therefore, it is reasoned, we will continue to prepare our groups, data and systems in a linear fashion. This is not correct. However, to address this situation requires a different type of thinking and approach.

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