How the future works

The more established that a social system becomes – whether it is an organization, an industry, or an economy – so the more resilient it is.  But also the harder it finds that it is to react and adapt.

The truth is that most of the future is woven out of deeply-established strands from the past.  In any social system, legacies of various previous actions get built on, reinforced, and over time became increasingly hard to change.  That is true in families; it is true in global populations.

Global warming is an extreme example – many of the problems future generations will face in fifty years’ time and beyond were already largely locked on course by the actions of the generations of fifty years ago and earlier.  The system dynamics of long-established organizations are often surprisingly similar to mini-versions of global warming.

But relatively new social systems are not like that.  In reality, any organization or industry or economy when it first starts out is very fluid, very flexible, with very few Rules to constrain it.

Imagine the future of a start-up in Silicon Valley a couple of years after its founders get together.  If the market goes in a new direction, this organization can turn on a dime.

But as our start-up grows, its leaders have to write an employee manual, draw up an organization chart, agree processes across different offices, standardize their computer network.  And gradually there are more and more formal and informal Rules.  Maybe an external regulator gets involved.  And they then have to fit in with EU laws.  In addition, many employees have now been with this company most of their working lives.  Things start to become a lot more sluggish.

Fifty years later, this same organization can only change relatively slowly.  In some ways that is good news – it makes what is now a large corporation much more resilient.  But it also makes it far harder for it to react and adapt.  If the world changes too fast, our once-dynamic start-up could go the way of the dinosaurs.

If this same organization survives another 1500 years – like the Vatican – you can imagine just how tough it will then be to steer in a new direction.  But also how resilient it will be to any crises.

And a final point: A CEO simply “lighting a fire” under an organization in order to encourage change is not necessarily going to work – however genuine and urgent the emergency.  Within an established organization, such an approach may just cause hot-spots.  Within a highly-volatile organization, everything may just blow up in everyone’s faces.