How Crises Model the Modern World

Crises are our new reality. “Black swans” are increasingly becoming the norm; our systems, environments, contexts are structurally prone to crises. Doing more of the same will not be the appropriate way to deal with modern crises: a paradigm shift is needed, based on a more accurate understanding of the dynamics of complex systems. This paper is an invitation to change the theoretical vision of crisis and crisis management, and the education and training of all actors involved.

Global Crises… is a paper that could, very easily, have ended up as an exercise in mental masturbation BUT it is so much more than that. Read it and you will learn!

In physics, the Lyapunov theorem on stability of systems states that “In the vicinity of its equilibrium points, the solutions of a non-linear system are similar to the ones of the equivalent linear system”. This means that as long as your system is near its equilibrium point, you can use the techniques usually used for linear systems to get answers on the behaviour of the non-linear system. It is a non trivial theorem that can explain why techniques in risk and crisis management could still be used quite effectively during the previous decade or so, even though complexity had already become increasingly apparent.

However, the need, in the current framework of crisis management, for adding more and more
parameters to describe the behaviour of the system should have been a clear indication that something had changed. One cannot hope to describe a nonlinear dynamic system with a patchwork of simple parameters.

A non-linear system implies, in most cases, unpredictable behaviour, such as the inversion of the Earth’s magnetic field in physics. We must now prepare for the unexpected, and not predict the predictable. We must be more creative, learn to be surprised, and to act rationally and creatively during the phase of ignorance, information surge and shock.

Good Decisions. Bad Outcomes

The article below is of particular interest to me and my colleagues at Ontonix because it reinforces the approach that we advocate and that is supported by our unique technology.

Business is no longer about linear relationships or processes with the post-industrial resilience suggested by terms like “supply chain”. As was highlighted in this recent blog (video) Eric Berlow: How complexity leads to simplicity, when dealing with the modern [non-linear] business, apparently, “good” decisions can often have the opposite of the desired effect without a holistic view of the system…more lessons from nature.

You may not, immediately, get the connection but this is a small extract from a report by US National Academies/National Research Council and the Federal Reserve Bank of New York collaborated on an initiative to “stimulate fresh thinking on systemic risk”.

Catastrophic changes in the overall state of a system can ultimately derive from how it is organized — from feedback mechanisms within it, and from linkages that are latent and often unrecognized.

…back to business Read more of this post