NotGettingIT.com

Posted by Peter Cochrane on January 2, 2002

British Telecom Engineering Journal, (Vol 3 Part 1, pp88), January-March 2002 
Peter Cochrane

Apart from the occasional ice age or natural disaster such as a hurricane, earthquake or tidal wave, our species has enjoyed a reasonably stable and linear existence. We have evolved appropriately to appreciate three spatial and one time dimension, with a sense of past, present and future. By and large most of us think in such terms and do not step into a world that exhibits ten or more dimensions, and yet all of our modern business and commerce problems tend to be multi-dimensional, and therefore well beyond our ability to grasp as a whole. The reality is that everything in nature is multi-dimensional, non-linear and chaotic. From the clustering of the constellations in the night sky to lightening storms and the evolution of life itself, all are governed by chaotic mechanisms. Strangely for any life to be successful it has to live on the edge of death, for you and I, our hearts are always close to fibrillation, and if they are not, then they wouldn't work. At a more prosaic level we see people in our families being born, getting married and dieing in clusters, we see our domestic appliances failing at the same time and we see car accidents clustered in twos and threes. Perhaps more evidently the occurrence of chaos is really visible on road networks. It isn't by accident that you can stand and wait for a taxi, or a bus for 20 minutes and not see one, and then five or six come at once. It is not by accident that on freeways the traffic naturally bunches and comes in clusters. It turns out to be a fundamental result of a chaotic system that sees intelligent entities making independent decisions based on the actions of others.

How come chaos is generally unrecognised, and has not been noticeable, reported or deemed significant to date? Well it is all down to the speed and perception! 100 years ago the chaos of the world passed us by, our frame of life was short compared to occurrence of chaotic events. Today however, speed of communication and physical travel are making our life time perceptibly much shorter, and therefore chaotic events are becoming very noticeable. The recent dot.com crash is a good example of a situation that has occurred many times before, the most recent being the industrial revolution. In the year 1900 there were over 1,000 manufactures of automobiles in the United States, by 1930 there were four. If we consider the industrial revolution to have spanned a 100 year time period, thousands and thousands of companies were created, the vast majority died and only a very, very few survived. Well, in the dot.com world that is exactly what happened in less than ten years. How come? Technology is now moving at such a pace that it is overtaking the human ability to adopt and adapt to the changes that it creates.

In a linear world we have always looked at a vast field of variables or influencing factures in a situation, picked out the three or four key (or biggest) items, usually the most visible, and we have analysed and assessed the situation. We have then made a decision on that basis which has often resulted in a single number answer, or a single yes/no decision. Incredibly, and in the past, that simple minded linear approach has served us well and resulted in most of our key advances and achievements. But, that kind of approach, that kind of logic, can now lead to massive failures! We are talking butterfly wings causing a hurricane. In a predominantly non-linear and chaotic world a small perturbation can cause a massive change. This is now a world where some insignificant parameter or factor that we choose to overlook is actually very significant and can have dire consequences.

If we take the dot.com bust for a moment as a most recent occurrence and analyse the real cause of the collapse, we can list a very limited set of axioms and conditions:

  1. Human greed had a large part to play
  2. The lemming effect where one success heralded another - apparently
  3. A blind belief that old market and business principles could at last be abandoned and profit really did not matter

But not many people would cite the lack of bandwidth in the networks feeding our homes and business, or the lack of management ability to adapt to IT and away from paper as also being a route course. And no one would probably select governments as having any responsibility, but their action in driving up the price of 3G mobile network licences to an absurd level actually precipitated a huge crash of the telecommunications industry across Europe and the rest of the world. It is now evident that you cannot remove over $200M from the European telecom industry and not cause significant damage. This really was a case of people looking at a limited number of parameters, making an assessment on that basis and deciding to do something that was fundamentally stupid.

Let us just examine for a moment how things break. If I were to offer you a formula F1 racing car to transport you from your home to your place of work everyday, or alternatively a Mercedes, which would you choose? I doubt you would choose the racing car, for it is difficult to start, it is very unreliable but incredibly fast - in fact it is an incredibly efficient machine. The Mercedes on the other hand, will start everyday for years and require little or no attention and it will get you to work reliably, but it is an incredibly inefficient machine. So we have to take care when we make our choices, if things are very efficient they tend to be inherently brittle, if things are more inefficient they tend to be more reliable. A case in point would be the hospital bed manager who spends every day trying to optimise the occupancy of hospital beds across the UK and in many other countries. Taken in isolation they do a good job, they fill those beds and the occupancy is close to 99%, but unfortunately for the surgeon, doctor or the specialist, they suddenly find that their patents are spread across four floors and not in a single ward, in fact the chaos of optimising the beds means that vast amounts of money are wasted and inconvenience becomes intolerable. How does such a situation arise? Simply because people have a myopic view of a situation, they zero in and optimise a small component of a much bigger machine.

In this 21st century we have to be far more holistic, far more educated, far more understanding and aware that the systems that we are building, the lives that we are creating are no longer simple, linear and functionally simple, they are highly non-linear and naturally chaotic, and we can cause huge amounts of damage by over simplification. It is not by accident that the last year has seen some of the biggest, best and most successful companies on the planet, nose dive and become total disasters. From the chairman to the non executive directors and the management of the company, we have people taking a simple linear view, who have acted like lemmings and followed the market. They have not analysed, have not thought through, and have just pressed the button, they bet, gambled the farm, and lost.

It has always seemed curious to me that the military play all day and occasionally have a real war whereas industry is at war everyday and never stops to play. The reality is, we do not have the mathematical or analytic tools that allow us to model accurately a non-linear world that is moving so fast that our computers are now doubling in power in less than 12 months. The only option we have as a species is to create models that we can play with (literally) to test our actions before we carry them out for real. Unfortunately industry and government are failing to recognise this and as a result we can look forward to ever more disasters on an increasingly large scale. Mother nature has no conscience, she is not kind, and she is not benevolent, she just seeks the minimum energy path - she will find a way, but it is generally brutal and to the point.

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