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Change 101 - do we even want it? (80)

In the mind of an engineer

In the technology world that I live and breathe there is the strong belief that an optimal solution will always be chosen if it is possible. In most problems there is some sort of trade-off that has to be done. But if through analysis it is concluded that one of the solutions is actually better in all respects, then it follows to reason that this should be followed.

My argument to you is that this is not the case. Optimal solutions are not always preferred.

The illusion of meritocracy

But wait a second - doesn't basic economic theory tells us that decisions are made in terms of risk vs reward? In other words, prudent people always compare expected profits versus expected risks and if the outcome is positive, they go ahead.

Well, first of all, people are not (always) prudent.

But second of all, this model also assumes people make decisions independent of each other. Actual reality is much messier. Tradition affects our judgement and hierarchy warps our world. More importantly, our governance systems do not distribute power equally.

Roughly speaking, all sorts of human organizations have three distinct layers of power:

  • The bottom (In society this is the poor and in a company this is the workers)
  • The middle (In society this is the middle class and in a company this is management)
  • The top (In society this is the rich and in a company this is the C-Suite/Shareholders)

The problem is that decision power usually resides in the top with some breadcrumbs to the middle. But the top inherently like the status quo, because it respects the current balance. This shapes their incentives: a change that seems clearly better for all, might risk upsetting things. Why take risks when you are already satisfied and can continue growing?

Enter the atomic model

If then the risk vs reward model is imperfect, what do we replace it with? Well, here is an example from the high school physics - the atom.

In the "planetary" model, introduced by Niels Bohr, an atom is comprised of a positive charged core and several layers of negative electrons orbiting the core. When an atom absorbs or releases energy, electrons can change layers or even leave the atom completely. The trick is a certain threshold has to be overcome for any move to happen - just "some" energy is not enough.

Perhaps this planetary model is a good substitute to understand how change manifests in human groups. For change to actually happen, the effect has to be too good. Just like an atom, complex societies change state only when the stakes are high.

Quantum leaps are also possible

Accepting the atom model however, implies that our systems are too conservative. In that case, we would see too little innovation - countries wouldn't develop and old companies would never innovate.

And while those statements are true to an extent, our model leaves a (small) hole - quantum leaps. Every now and then, earth-shattering events happen that somehow force change: the iphone, the printing press, Google search ... All massive changes that similar to Pandora's box, once opened the world is never the same. The trick then is to either be the innovative one to lead the change (hard) or be the clever one and correctly ride the wave when it's there (less hard). As the saying goes, "never waste a good crisis".

Furthermore, after some generations, incompetence and arrogance creeps in. Existing groups are bound to make big mistakes. This allows challengers to arise or even the occasional bottom-up movement taking power. Probably important things to keep in mind in the era of intense geopolitics, climate change and AI. Maybe it needs to get worse before it gets better - but it does needs clear sight and bravery to spot the gap and seize the initiative.


 

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