2020, the year of the global pandemic, was in many ways an urgent wake-up call for humanity – demonstrating perhaps more clearly than ever that our conventional models of reality are deeply out of sync with the real world. The confused and incoherent responses to COVID-19 highlight the inadequacy of our collective sense-making and governance systems. But the pandemic might be just the catalyst for a profoundly disruptive and unstable decade. Driven, on one hand, by a convergence of complex global crises, from climate change to economic instability, from food scarcity to mental health as our current world order begins to fall apart; and on the other, by the cascading impacts of disruption to every sector of the economy as a new order emerges. Never has the need to understand the underlying processes of change that drive these extraordinary occurrences been more acute and consequential.
This speaks to a much deeper problem than recognised by conventional analysts – that our underlying models of thought and reality are increasingly out of touch with the interconnected complexity of global systems. If we are to successfully navigate the coming decades of crisis and disruption, then, we require not merely technocratic external solutions applied as a kind of ‘band aid’ to these mounting challenges, but rather a fundamental reset of how we think and see these challenges in the first place.
The metaheuristic of reductionism
At the core of the problem is a reductionist model of the world that has outlived its usefulness. Although reductionism as reflected across society has indeed enabled huge progress such as enabling incredible medical advances, the model is not adequate to the current crises, and now has become our biggest impediment.
Our perceptions of reality have evolved dramatically over time from the earliest days of human civilization. Our mental models and ways of understanding the world represent in some ways a metaheuristic – a way of simplifying an incredibly complex system. Even today, with the extraordinary scientific breakthroughs we have made in understanding our world, our chronic inability to keep up with the pace of events, crises and disruptions shows that these models are far from perfect.
This is because our mental models represent the result of evolutionary processes that act on competing societies. Those best suited to a particular geographical and historical context outcompete others and spread. The Neolithic revolution ushered in a new age where individual and tribal survival alone was not enough. In a system of production based on the extraction and exploitation of scarce resources, tied to specific geographies, with a surplus of food and time enabling innovation and learning, societies found themselves locked into zero-sum competition. They needed to grow or be out-grown, exploit or be exploited, dominate or be dominated.
The Age of Extraction
This ‘growth imperative’ provided the evolutionary driver against which our models of thought and perception and indeed, civilizations, developed. New ways of thinking that better explained the world, and better enabled this dynamic, helped drive the technological progress permitting different societies to compete and expand. But technological progress alone was not enough. Societies that ‘won’ also needed the organizational capabilities and constructs to create the conditions and incentives that maximized growth. Belief systems that also emerged from these new ways of thinking helped provide the counter-balance of stability required; a balance between the yin of stability and the yang of growth.
But of course, this was never a balanced equilibrium – the challenge was to maximise growth whilst creating a ‘minimum viable stability’ for societies. The winning combinations were largely an arbitrary feature of how these social configurations were best adapted to a particular time and place, rather than comprising best explanations of how the world and reality actually functions.
As a result, today’s prevailing models of thought co-evolved with the technologies of the emerging industrial age, through the Scientific Revolution and the belief systems of the Enlightenment. This reductionism was suited to an era of machines and has been extraordinarily successful in breaking down the incredible complexity of the world into manageable parts. This, in turn, advanced our understanding of our physical environment at micro-scales, driving incredible breakthroughs gifting us detailed understandings of the pieces of the puzzle, all the way down to a sub-atomic scale.
This paradigm enabled the growth and progress we have experienced over the past 200 years. It has also permeated across the very sinews of our societies, institutions and value-systems in numerous ways. We see this across all areas of our current organizing system, for instance, in governments which organize around separate activities in disjointed departments; in academia where the study of the world is broken down into separate subjects; and in medicine, where doctors specialize in individual parts of the body, treating symptoms – and symptoms of symptoms – rather than optimizing the whole.
It is evident in our belief in individual rights which we see reflected in representative democracy – the right of an individual to vote; in the economic system, where it is assumed that individuals acting in their own self-interest and pursuing private ownership of property will approximate the optimal outcome for all; and in an implicit social contract, which operates under the dictum of ‘each man for himself’.
There can be no doubt that this ‘modern’ industrial way of understanding the world has outperformed all others over the past two centuries. But it is only just that: a geographically and historically specific way of thinking and seeing, whose holes and blind spots are becoming increasingly costly, acute and catastrophic. The converging escalation of our global ecological, health, energy and economic challenges is direct empirical proof that it offers a representation of reality that is far from perfect.
We ignore the connections and interactions between the parts. We overlook complexity. We look through a narrow lens at parts of the system and miss the whole. By applying the metaheuristic of a simple system, we are increasingly incapable of keeping track of the feedbacks and systems dynamics that drive non-linear change.
This leads to an implicit determinism to our outlook – the assumption that change to ‘this variable’ linearly causes change to ‘that variable’, while all else ‘remains equal’. This determinism underpins the ‘silo-ization’ of society – a narrow view of the individual parts of the system that blinds us to the cascading effects of change from one part of the system to another; in turn, leaving us unprepared for the second and third-order effects that represent ‘butterfly effect’ style consequences of our decision-making.
Unfortunately, our simple linear mindset appreciates only the narrow effects of change and extrapolates all else. Meaning we treat variables as constants. In short, we take for granted concepts like democracy, nation-states, the structure of our communities and our mental models, treating them as fundamental truths, the immovable foundation stones of our civilization. When of course they are simply variables, human constructs that have developed through an evolutionary process.
They are not constants – they are useful cognitive tools that have functioned very well up to a point. When the system is in a state of equilibrium – a state of stability – the built-in failure to anticipate and track cascading effects is not catastrophic. But when the operation of the system reaches its limits and is pushed out of equilibrium – precisely because its holes and blind-spots result in its brushing up against environmental, economic and social boundaries – then it becomes increasingly incapable of offering meaningful or viable solutions to its own rising instability.
The Phase Change
It is these forces that drive the pattern of change in society, at all levels, which represents a ‘punctuated equilibrium’; long periods of incremental change interspersed with rapid change. The periods of rapid change manifest as a phase change – a change in system state, where the old rules, drivers and relationships breakdown and a new system with new possibilities emerges. Think of the car replacing the horse in transportation, a change that took merely 20 years, and transformed not just the transport industry but the infrastructure, other industries like retail and agriculture, our towns and cities, geopolitics and ultimately our climate.
The failure to see the transformative nature of change tends to reinforce expectations that the current system can continue indefinitely. But this is merely a mirage that leaves us trying to patch up the old with red, green or blue band aids and to double down on what we perceive to have worked previously. All the while leaving us blind to emerging possibilities.
Rather like the conventional medical paradigm, our diagnostic approach may allow us to rapidly identify treatments for certain disease symptoms. But sometimes, an all too narrow focus on those symptoms may mean we miss the bigger causes of ill-health. The very narrow treatment of a symptom triggers other symptoms; further treatment of these triggers newer symptoms, and we become locked in a cycle of chasing symptoms rather than recognising the root cause of the suffering that can be addressed by optimising the whole mind-body system in context with its environment.
Our prevailing mental models become their own worst enemy. This problem is made worse by our in-built response to increasing instability and uncertainty – to reach desperately for the stability and certainty we associate with the old, familiar organising system. We see this in our approach to problems like climate change, inequality or the pandemic. Yet as we approach a phase change transformation, the old certainties die. Just when we need adaptiveness and openness to experimentation, the mental checks and balances we use to create stability in equilibrium end up tying our hands exactly when we need them free. The assets of the old Industrial order become our biggest liabilities.
Joining the dots
The challenge is to recognize ourselves as parts of a whole. This does not mean we can afford to ditch a deep, detailed understanding of the parts and pieces. Far from it – it implies that we supplement and integrate that understanding into a wider, deeper cognition of how all these parts operate as sub-systems interacting within the whole system.
And that is why, as we witness escalating crises that signal that our prevailing metaheuristic – our reductionist models of the world – are no longer fit for purpose, a fundamental shift in perception is the basic precondition for the continued survival of our societies.
Emerging signs of this shift are therefore already visible in the form of new understandings of the need for more holistic approaches. This is distinct from the fuzzy holism of less advanced civilizations, which we can certainly learn from. The shift in perception needs to incorporate a detailed understanding of the parts into an increasingly detailed vision of how the parts interact within the whole.
As the pandemic has taught us, even as individuals we are not islands. Nothing is truly separate. In medicine, we are learning that the body, gut, mind and environment are holistically intertwined.
In the climate system, we are learning that multiple ecosystems are inherently interconnected in such a way that they can engender complex amplifying feedbacks.
In technology, we are learning that major disruptions have cascading cross-sector effects which can end up transforming entire societal systems.
In economics, we are learning that the neo-classical view of supply-demand dynamics operating in suspended animation does not account for their embeddedness in the biophysical environment and energy system.
In this new era of rapid change, we need new mental models and cognitive tools that are better suited to reality. As the system departs from equilibrium, sticking to outmoded models of the world is tempting – they appear to offer the promise of stability and a return to the ‘good old days’: a desire the becomes stronger when uncertainty and instability rise.
But those days are never coming back. Societies and businesses that remain rooted in these old models are bound to fail and collapse as those models increasingly fail to offer meaningful solutions to escalating challenges. Yet those who speed ahead with the shift in perception, reconstructing their mental models, regenerating new cognitive tools that provide more powerful sense-making of interconnected complexity, will be able to thrive and lead.
To adapt in a rapidly changing complex world, we require a revitalized capability to envision the whole system as well as its parts, and how they intertwine in non-linear dynamics, rather than focusing on narrow, silo-ized perspectives of different parts. We also need to be alive to the second and third order impacts that cascade from these dynamics, and develop reasonably accurate but ever-evolving data and metrics to track change, progress, set-backs so that we can measure the real-world impacts of decision-making in real-time, iterate, and course correct as needed. We need to embrace the license to experiment and be wrong in an era of radical uncertainty, avoiding the hardwired temptation to cling to misleading mirage of safety associated with the old organizing system.
Among the insights that this shift in perception offers is a renewed capability to recognize how incumbent industries and production systems interwoven with the old reductionist paradigm – across the five foundational sectors of information, energy, transportation, food and materials – are bound for massive disruption. This disruption is being driven from within the dynamics of the existing system itself by economics. As new technologies improve rapidly in cost and capability they will disrupt the foundational sectors of our economy and open up the possibility for an entirely new paradigm.
In this paradigm, the new emerging production system will be distributed, people-centred and networked. No longer reliant on the extraction and exploitation of scarce resources and people and ever-increasing scale. Unlike the old growth-based model, it will upend the traditional top-down, centralized and hierarchical modes of control that were effective for centuries, but are now rapidly losing all efficacy. A radical new space to explore vibrant grassroots governance models, ways of making societal decisions on politically and economic issues, will open up.
But none of this will be possible without a shift in perception. Without that shift, we are blind to the true complex nature of today, and to the huge possibilities for systemic transformation in the near future. That’s why this shift could well be the biggest driver of disruption this century.
Reprinted from San Francisco Chronicle with permission
JAMES ARBIB is chairman of a UK-based family investment office with a diversified portfolio across all asset classes and a focus on the risks and opportunities of technology disruption. He is the founder of Tellus Mater, an independent philanthropic foundation dedicated to exploring the impacts of technology and its potential for solving some of the world’s most challenging problems. He is the co-founder of RethinkX and has given keynote speeches at dozens of events including for BlackRock, Goldman Sachs, governments and corporations. A graduate in history from Trinity College, Cambridge, he has a Masters in Sustainability Leadership, also from Cambridge. He is a qualified chartered accountant and worked as an investment analyst covering utilities.
TONY SEBA is a world renowned thought leader, author, speaker, educator, angel investor and Silicon Valley entrepreneur. He is the author of the #1 Amazon best-selling book “Clean Disruption of Energy and Transportation”, “Solar Trillions” and “Winners Take All”, and co-author of “Rethinking Transportation 2020-2030” and “Rethinking Food and Agriculture 2020-2030”.He has been featured in several movies and documentaries including Bloomberg’s Forward Thinking: A Sustainable World, 2040, and SunGanges. He is recipient of many awards including the Savvy Awards (2019), Solar Future Today’s Visionary Influencer Award (2018), and Clean Energy Action’s 2017 Sunshine Award. He is the creator of the Seba Technology Disruption Framework™. His work focuses on technology disruption, the convergence of technologies, business model innovation, and product innovation that is leading to the disruption of the world’s major industries. He has been a keynote speaker at hundreds of global events and organizations including Google, the European Commission, Davos, COP21, CLSA, J.P. Morgan, Nomura, National Governors Association, Conference on World Affairs, the Global Leaders Forum, Intersolar and China EV100. He has taught thousands of entrepreneurs and corporate leaders at Stanford Continuing Studies. He has a Stanford MBA and an MIT degree in Computer Science and Engineering.
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