Radical change is difficult to manage

Progressive change remains the preferred option. Large systems are complex and involve relationships between people and unites of people (organizations) with intertwined interests, affecting a change is usually something that needs to be done progressively to limit the side effects of that change. In addition, most of the time, social, political and economic environments are stable. If you pick a random point in time there is rarely a need for big changes or for radical decision making. Despite this apparent stability, there are situations where major events creep out of the woodwork and shatter the monotony of our daily lives. When these events do happen, how do we know that an organization or nation should attempt to affect radical change rather than progressive improvements?

The core challenge is that there is no way to accurately predict uprisings, revolutions, market changes or economic downturns. There are at least three principal reasons why a sudden change in a stable system is so unpredictable.

The first reason is the well documented phenomenon commonly known as the “Black Swan” effect. This “Black Swan” is so named because Europeans thought all Swans were white until they discovered Black Swans in Australia. The surprise of finding a Black Swan was utterly unpredictable based on all prior European knowledge of Swans being white. We can boil down this type or issue to a set of false assumptions or a simple ignorance of the possible varieties available. As Donald Rumsfeld said, it is the “unknown unknowns” or things we do not know we do not know that can really surprise us.

The second type of surprise are “known unknowns”. For example, we know there is a certain level of discontent in all societies and a certain number of unhappy citizens, but we do not know when they will mobilize for change. Another example is our knowledge of the degradation of the natural environment due to global warming and other effects, but we do not know when a massive storm will appear of when the arctic permafrost will melt, releasing tremendous amounts of greenhouse gases that could change the ocean currents, leading to massive weather changes and likely economic collapse. Referred to as a Tipping point, some stable systems quickly flip into another state and it is tremendously hard to know where that point lies. If we had the ability to accurately predict big changes, we would simply avoid them. If a dictator can determine that a revolution or uprising is coming, he would act and the uprising would never occur. If the USSR had known the system was crashing in the late 80s, they may have done more to try to prevent it. Instead, leaders are nearly always caught flat footed when big changes arrive. The unpredictability of change makes leadership that much more important – it is easy to govern in times of stability, it is much, much harder to govern in times of change.

The third is the simple challenge or inertia in the face of a clear change. This is most common in the business world where new technologies regularly upset industries. It was pretty clear that internet penetration and bandwidth were constantly increasing since the 1990s. It was also clear that Blockbuster revenues and profits were progressively decreasing during that period. Despite this clear and present danger, Blockbuster made little to no effort to adapt their business model and emulate companies like Netflix (or buy them). Part of it was the inertia of a large organization and part of it was their business model which was based on retail outlines, physical assets and late fees. There are very few companies that successfully navigate a change in business models.

In stable environments, systems are usually robust and mechanic enough to survive idiotic leadership. Rome’s imperial machine trudged along through the reigns of buffoons such as Nero and Caligula (who named a hose Senator), but later struggled when real change reared its head. The real change that brought down the empire was likely a combination of religion, discontent in Northern Europe, falling production the mines in Spain, a lack of new territories to rape and pillage and a crumbling of social cohesion. External radical change is very, very hard to manage and this is especially true if it is multi-pronged and not from a single source (i.e. a clear enemy).

When we are forced to embrace radical change to survive, leadership is typically the determining factor in a successful outcome. Whether your own organization is undergoing radical change or whether it is an external change (i.e. change in technology or the market), the most critical thing is for the leadership to be strong, wise and be able to act quickly. The wrong decisions can have dire consequences, but no decision is usually even worse. Three historical examples of poorly managed radical change include the Spanish invasion of the Americas, the closing of China and the French Revolution.

When Cortès disembarked in Central America, the native Aztecs were dominant in the region. Cortès and his few dozen Spaniards were able to mobilize smaller rival clans and take advantage of the Aztecs lack of knowledge of Spaniards to topple a regime that had been in power for centuries. Had the Aztec leaders overcome their own history with rival clans and found compromise with them or had the Aztecs taken the time to gather intelligence on Cortès (even post landing) they likely could have stopped him or at least significantly delayed the devastation of the Americas by the European invaders. Instead, they went head on against Cortès based on their past experience with other tribes and the Aztecs were utterly destroyed.

For most of human history, China was the most powerful and wealthiest nation in the world. Yet, after their leadership decided to close the country in the early 15th century the country progressively became poor and backwards. The once mighty country became so weak that small Europeans armies were able to force China to give up parts of its territory and allow the import Opium so that Europeans could make a handsome profit at the cost of millions of drugged Chinese. This trend of submission continued until the Chinese revolutions in the early 20th century. A fifty year period of turmoil and challenge followed and only ended with death of Mao. While the communist regime provided some benefits in the form of longer lifespan, dignity for peasant workers and freedom from servitude. Despite the progress China was headed in a very bad direction when Mao died in 1976. At the time, there was a significant and complex power struggle that could have gone a different way. Instead of the election of Deng Xiaoping as leader, the communist party could have chosen a safer bet in the form of a Mao stooge who would have prolonged or worsened the situation. The Chinese miracle rests largely on the outstanding leadership of Deng, without him it is hard to imagine China as it is today. Deng ably navigated the factions within the communist party and throughout China, opening up the country and starting an economic miracle no one could have predicted.

For most of European history, France was the wealthiest and most powerful nation in Europe. It had a larger territory and a stronger government than most rival powers. Despite its apparent advantage, when uprisings began in the late 18th century, the French king failed to compromise or react in a semi intelligent way. His failure to take a quick decision for either a constitutional monarchy (like the English) or a violent crackdown against the Republicans probably led to his beheading and the decades of violence of the French Revolution and the Napoleonic wars. Had the king taken a more moderate tone it seems likely that the aristocracy would have survived like the other European aristocracies that still exist today. A failure to lead in times of radical change led to the loss of many heads.

In a more modern and less violent context, this failure to enact radical change is visible in the corporate world. The number of large, dominant companies who fail to act is astounding. Despite their McKinsey consultants and their Harvard MBAs, company after company fail to change in the face of clear and present danger. The list is long and is not limited to the commonly known cases of failure – Nokia, BlockBuster, Kodak, Sears and more. As Amazon leader Jeff Bezzos said, even “Amazon will eventually go bankrupt”. Like it or not, our external environment will change and we must adapt or die. How can know when to make radical changes to a stable organization that is facing a changing environment?

The need to made radical change lies not only with the dominant powers, but also with the opposition that is trying to change things. The Arab uprisings of 2010-2015 held tremendous promise, but ultimately mostly failed to affect progress. Libya is in a full out civil war, Bashar Al-Assad seems poised to remain in power, the Egyptian military is stronger than ever and Yemen is blood stained battlefield. Only Tunisia seems to have improved its situation. Was this outcome a failure of leadership? I do not know enough about these complex situations to comment, but it seems that to unseat a strongman government, there must be a high level of cohesiveness in the opposition forces. If there is not a high level of cohesion or a controlling faction in the uprisings, the division of the opposition ultimately leads to its downfall. The Bolsheviks took control of the Russian revolution in 1917 and the Jacobins did a similar move during the French Revolution – ensuring the revolution happened. The failure of a strong willed party to take control in the Arab Uprisings and remove the pillars of support from the old regimes may may have led to their failure.

But the question remains, when do you know that radical change is needed? Even if we know radical change is needed, how do we mobilize the forces and undercut the current structure. The most well-known how-to manual for starting a revolution is the recently deceased Gene Sharp’s “From Dictatorship to Democracy”, also a documentary. But, the book does not clearly identify how to know when to start such a revolution – only how to conduct one.

Of course the flip side to all of this is to ask when radical change is not needed and should be stopped before it creates more problems than it solves. In Canada, there was attempted revolutions (or at least uprisings) in 1837 as well as Québec independence efforts in 1980 and 1995, all of which failed. Would Québec or Canada be better had they succeeded? We do not know, but stopping those radical changes certainly came down to questions of leadership at the time.

I do not have any sort of conclusion or specific proposal on the necessity of radical change. The topic is too vast and complex to offer any simple analysis. But, despite it complexity, I believe that in the next twenty years we will be confronted with a number of questions that may require radical change in our society. The list is long, but my top ten external events that will require us to choose between radical change or dire consequences are:

1. The rise of China,
2. Resistance to antibiotics,
3. Collapse of US power,
4. Collapse of the US dollar as our reserve currently,
5. Disintegration of the European Union,
6. Uprising in Saudi Arabia,
7. Impacts of global warming and pollution,
8. Ecological system collapse and impacts on our food supply,
9. Housing market crash in China and elsewhere, and
10. Cybersecurity issues.

All of the above issues are highly unpredictable in terms of when or where they may happen or what the consequences might be. The assassination of the Archduke of the Austro-Hungarian empire led to the slaughter of millions of people and the restructuring of the entire world. It was a match that set a tinderbox alight. No one knows what big event may alter our realities and is therefore critical that our leaders and systems be designed to avoid catastrophic failures such as Blockbuster, the Aztec empire or the French revolution. We must prepare ourselves for the eventuality of large changes by increasing the robustness, flexibility and adaptability of our countries and organizations.