Blog by Dr. Arndt Pechstein

  • Dr. Arndt Pechstein

10x your Crisis Response & Adapt to Disruption Faster

What we can Learn from the Plague, from Nature and from Exponential & Systems Thinking

At times, the world with its global challenges seems intimidating. It sometimes makes us feel hopeless or reactive at best. Climate change has been on our radar for a long time. Yet, it hasn’t been very effective in changing our behavior. The latest COVID-19 crisis is maybe the most radical but also most eye-opening example revealing how vulnerable our organizations and society as a whole are. A major shift in mindset and systems setup is required to future-proof humanity. COVID-19 is certainly a threat. But it is also one of the largest opportunities we had to rethink the status quo. And we are not as alone and helpless as we may think. Never before have we had so many opportunities, so powerful technologies. Never before have we known so much. Never in the entire history of humankind have we been more connected. And never have we had so powerful tools that allow us to prepare for crisis and the unexpected. This article will give insights in what we can learn from previous crises, how we can leverage COVID-19 as an opportunity and it will introduce proven approaches to help organizations to foresee, manage and build for disruption, establish resilience to withstand crises and learn from and adapt to inevitable changes. 


The status quo: A quietening realization

The current Corona crisis is a tragedy. It came unexpected to many and the dimensions and speed by which it perpetuates are equally shocking and paralyzing. Within a few weeks, it turned into a global deadly threat and caused an economic halt in most sectors and regions. Drastic measures have been taken to dampen a phenomenon of exponential scale. As disastrous as the current pandemic is, it is actually not so surprising in two ways: First, it is nothing but a symptom of a system where competition and endless growth are values and individualism and egoism triumph.


Second, COVID-19 is by no means the only disruption that is happening, only one that immediately and directly threatens our very own existence. Unforeseeable exponential disruptions in economy, society and environment (so called black swans) are a new reality only a few of us are prepared for. Most of the businesses and corporations we see today will not exist in the same way just a few years down the road. Nation states and the fundamentals of democracy will be reinvented in the years to come. According to Darwin’s evolution theory “it is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.


The COVID-19 pandemic offers a huge potential for global adaptation and system reboot. The coronavirus epidemic will lead to a global recession of unprecedented magnitude but it will also allow humanity to reset its values. It is not only a quarantine from the virus but equally a quarantine of consumption, transport and travel. This will have a profound societal, economic and ecological impact. And it will show us how we run our organizations in a different, a more resilient way.


Exponential vs. Linear Thinking: Your past is neither your reference nor your future

Why did the Corona crisis overwhelm people, organizations and the medical system? The mechanics of Sars-CoV-2 follow an exponential timeline. Just as emerging technologies do with their doubling price/performance curves outpacing even Moore’s law. However, our brains are not hardwired to think in exponentials. We can only think and anticipate the future based on linear changes and extrapolations. Our evolutionary bias toward the known and our skill to project past experiences to predict the future make us blind to exponential changes and black swans that are an increasing reality in the 21st century.

Times have changed dramatically. Change is the new normal. We constantly have to learn, experiment and leave our comfort zones. We have to deal with unpredictability and disruption in a VUCA (volatile, uncertain, complex, ambiguous) world. And we have to constantly question and disrupt ourselves before we become disrupted from the outside. This requires shifts in mindset and toolset as we are neither built nor set up for change. Both evolutionarily as human species but also in our organizations we have an inbuilt bias towards the known and conservation of the present state. Entrained and linear thinking, perpetuated by outdated education systems and linear, standardized processes limit innovation and human development. What we need is a connected mind. Thinking and acting in systems and complexities. Because the world will never be predictable and linear again. For that we need both emerging technologies AND human capabilities.


Learning from the past: How the Plague ignited progress

Before we dive into the approaches to manage and design the future, let us look at what we can learn from the past. Doing so will allow us to comprehend the Corona crisis as an opportunity for economic progress and organizational innovation. COVID-19 is not the first pandemic humanity has experienced, nor will it be the worst. The Black Death in 1347-1350 was one of three major plague pandemics in history that devastated the populations of Europe and Asia. Just as Corona today, it was an unprecedented human tragedy. The patterns, however, we have seen from three plague pandemics in history (A.D. 541, 1347, and 1855) and the current SARS-CoV-2 spread are striking. First, there were essentially three causes that paved the way to spread the disease: increased international trade and economic expansion (add holiday travel today), a rising urban population (add an increasing number of social contacts today), and the lack of medical knowledge (add medical system capacity today).


Second, just as today, people and entire countries were overwhelmed and caught off-guard. The disruption didn’t meet a prepared crisis management but rather a chaotic and delayed response. Finally, another pattern that is yet to be unfolded, regards the aftereffects, which may hold hope for us. The Black Death pandemic not only shook Italy back then, but transformed it. The impact of the crisis was profound and resulted in wide-ranging social, economic, cultural and religious changes. It changed the social order and the continent forever. After a period of recovery, much of Italy became very wealthy as a more sophisticated economy emerged.


The crisis also diminished the influence of the Catholic Church, the culture became more secular. The mental models of people changed dramatically. The Black Death overturned old certainties. No longer were people as willing to accept the status quo reinforced merely by tradition. The plague and its devastation undermined old beliefs. The new spirit of inquiry helped to ignite the Renaissance, one of the greatest epochs in human history as well as the emergence of the Humanist movement, which valued reason and critical thinking and was the foundation for the Enlightenment and industrial revolution centuries later.


Crisis as opportunity: Ambitious, agile and aggressive

In the same way the Plague fostered progress in the past, the Corona crisis holds the power to sustainably change our present and future. For years we have known that in order to survive as a species and to keep the planet alive we need to make massive changes to the way we live, travel, consume and entertain. Now, such change has been enforced on us. And it is possible. This is not a financial crisis but a disruption crisis. People stop moving around, stop going out, stop spending, stop going on holiday, stop going to cultural events, even to church. All sectors are shaken, especially airlines, hospitality, electronics, service industry and imported foods. This disruption imposed by the virus bears an enormous potential to catalyze an alternative and profoundly different world.

We should be very grateful for the virus because it might be the reason we survive as a species […] In the end, we will be forced to do what we should have done already in the first place.” Li Edelkoort (trend forecaster)

Two main drivers for a positive disruption can be observed:


  1. A slowed economy is a lower-carbon economy

Reducing economic activity and industrial output is a means to enable global ecosystems to regenerate. The virus reveals how slowing and shutting down can produce a better environment visible on a large scale. Industrial production has slowed, longer holidays and remote work has been enforced and travel restrictions have been introduced, all of which result in lower CO2 emissions. China’s emissions alone are down by a quarter. Better air likely might have been saving more people’s lives there than coronavirus was killing. Similarly, less NO2 has been recorded over Europe by the ESA.


It seems that the coronavirus is driving the sort of reduction in air travel and cruise ships that lawmakers and the industry itself have thus far failed to enforce. This poses a disruptive need to various industries to reinvent their business models (see below how to). The decrease in output and the slowdown of supply chains mean less material being shipped across the world, and less disposable products ending up in landfills. This converges with the rise of a sharing economy, the growing awareness amongst younger generations that ownership and the hoarding of clothes and cars is no longer even attractive.

New data from the Copernicus Sentinel-5P satellite reveal the decline of air pollution, specifically nitrogen dioxide emissions, over Italy and other parts of Europe. Images from European Space Agency (ESA)

2.     Minds may open for structural change towards more resilient organizations and local economies

The outbreak has forced us to slow or shut down aspects that were unimaginable before: religious events, the world’s biggest sports competitions and fairs, even a 30-day lockdown of North Korean’s military. This may allow citizens to imagine, and policy-makers to foresee, how it is possible to live differently in light of the ecological emergency. Currently, the focus is on health and supply chains. But the process of challenging assumptions and fundamentally altering behavior — just like after the plague — can be seized on once the Corona peak has been passed. If we are wise, we will start up again with new rules and regulations and build a new economy with other values and ways of handling production, transport, distribution and retail.


A future sustainable society would mean most of us working and commuting less, being more involved in our local communities and growing food near to where we live, with more time with our friends and families—all things found to increase human live quality and happiness. Local industries and activities would gain momentum, new technologies will flourish and initiatives based on exponential and complexity thinking will take over leading to higher resilience and enhanced adaptation capabilities. 


Leading Innovation and Transformation: Disruption by Design or Disaster?

So how do we seize this opportunity? How do we kick-start the Renaissance 2.0? How do we prevent falling back into old patterns that we let us fail again? We need to embrace a new mindset, new approaches and open up to new organizational paradigms. In order to protect themselves from future shocks, organizations need to become more resilient. Various approaches are available already to date to future-proof your organization and our societies at large:


Biomimicry

Biomimicry is innovation inspired by nature. Learning from systems that have been built in complex environments to cope with disruption and change. Interestingly, concepts that are boosted in their urgency now during the corona crisis entered the era of business only in the past few years: concepts like resilience, crisis management, decentralization, self-organization, network approaches, adaptability, evolutionary testing and ecosystems all have their basis in natural systems. Being able to understand, analyze and abstract biology in order to drive business innovation is key for survival in the 21st century. Applying life’s principles and patterns from biology can teach us how to build for resilience and crisis recovery by including diversity and redundancy, how to shorten delays and catastrophic failures through tight feedback loops and how to survive disruption through decentralization and modularization. It also helps us to drive a more sustainable economy by understanding the dynamics and interdependencies of complex adaptive systems.


Systems Thinking and Complexity Theory

The world’s human and natural systems are non-linear. They are characterized by complex interrelationships and a high dynamic. As a result, the challenges we face, including technological disruptions or the coronavirus, are borderless, integrated and interconnected, often in unseen ways. The spread of the coronavirus represents a perfect example of what happens when we think linearly and fail to prepare for and address our challenges as parts of one complex system. This is not the first time the failure to apply interdisciplinary measures based on a systemic understanding has aggravated a situation. The global failure to respond to climate change and the decline of established companies in light of disruptive business innovations are others. Today’s biggest problems defy simple, short-sighted solutions. If we want to transform an organization we have to think in systems. We need an understanding of exponential growth and phase changes (first gradually, then suddenly). We need to comprehend interdependencies, feedback loops (to avoid delays and failure) and leverage points to intervene in a system. And we need to understand the nature of black swan events, events that are unpredictable and unexpected and have potentially severe and disruptive consequences.


Exponential Organizations

Understanding such dynamics is extremely important for any organization to survive and thrive in the 21st century. Traditional organizations are not equipped to navigate through disruption and exponential changes. Their corporate immune system and legacy constraints will prevent them from adaptation to an economy that changes from scarcity to abundance in the light of information-enabled emerging and exponential technologies. We will see many established organizations fall in the years to come as a result of this unpreparedness. In the past 15-20 years we have witnessed the rise of a new breed of organizations – that Salim Ismail termed Exponential Organizations (ExOs). Their impact is disproportionately large, at least 10 times larger, compared to their peers because of new organizational techniques that leverage exponential technologies. Rather than increasing human workforce or physical assets, these companies leverage the abundance that information and technology offer to achieve rapid pursuit of a "Massive Transformative Purpose" (MTP). In doing so, they are able to scale their business strategies, culture, organizational frameworks and purpose at the same rate as the technology, i.e. one that follows an exponential curve. I am NOT arguing here that we need more Facebooks or Ubers. But we need to learn from and adapt the mechanics of these organizations and transfer them to big-scale positive change. By leveraging emerging technologies around a massive transformative purpose (MTP) aspirational goals focused on creating a different future become possible. Tesla with its mission to ‘accelerate the world’s transition to renewable energy’ is a wonderful example of the exponential technology vision around an MTP. This way, organizations become purpose-driven and profitable and create value for society and planet.


Interestingly, these ExOs are much less disrupted by the COVID-19 crisis. Remote work and leveraging assets that are not owned, allows them to maintain there operations almost undisturbed. In contrast, most of our traditional clients face severe challenges at the moment. Except for those that we have already equipped with a fair competence in agile workflows and virtual teams, our clients and many other organizations that approach us at the moment experience a drastic throwback in productivity and business operations. Our services supporting organizations through online formats to jump-start their remote work capabilities and thus ensuring uptime for customers and operations, has sky-rocketed. Our own experience with our decentralized network as well as our track record of company transitions through a hybrid approach proves to be of immense value in times of disruption.


Hybrid Thinking: A change framework for the age of abundance

Hybrid Thinking is an innovation and transformation approach connecting the dots between the approaches above. It connects humans, technology and purpose-driven innovation with business agility and organizational effectiveness. Hybrid Thinking combines cutting-edge approaches with a sound scientific basis to drive behavioral and organizational change. It starts with a transformative purpose, empowers people to unfold their full potential, builds effective and high-performant teams, and establishes organizations that are innovative, adaptive and create value and true impact. Hybrid Thinking combines and leverages the tools and frameworks of Biomimicry, Design Thinking, Agile and Exponential Organizations and connects them with the foundations and dynamics of Neuroscience, Systems Thinking and Complex Adaptive Systems. It aims at building a circular economy that is profitable, just and value-creating. 


Connecting minds, creating the future Humanity is linked through a network of minds that span time and space. From our early ancestors to us, all around the globe, we carry a wisdom and power that has the potential to transcend humanity on planet Earth. Coronavirus and the ecological crisis are linked symptoms of an unjust and unsustainable global system. Steps we can take to prevent another virus spreading are the same steps required to tackle the ecological emergency. The best ways to prevent viral pandemics are not self-isolation, handwashing or facemasks, but changing our flawed economic, food and transport systems and replacing them with structures that put humanity and planet first. Changing our mindset is the single most effective mechanism to future-proof humanity and accelerate its shift into a desired future. So first and foremost, the revolution that is needed is a revolution in consciousness. It is the rise of an era that makes an outdated system obsolete. An era that blurs boundaries and connects what belongs together. A hybrid era which requires Hybrid Thinking.


*** About the author: Dr. Arndt Pechstein is a neuroscientist, agile & ExO coach, and management consultant. He is an energetic blend of a scientist, serial entrepreneur, and business coach. He holds a PhD in neuroscience, a diploma in biochemistry & biotechnology, and has specialist backgrounds in Agile & Design Thinking, Exponential Organizations, Circular Economy, and Biomimicry. As founder and managing partner of the boutique consultancy phi360, Initiator of the Hybrid Thinking approach and chairman of the Biomimicry Academy, he advises companies and organizations on crisis management, agile transition, organizational development, and bio-inspired & disruptive innovation. He has been running virtual trainings, keynotes and consultancy long before Corona was in the news. Arndt’s mission is shaping a just, sustainable, and desirable future.