A year or so ago, I wrote about how fast change is occurring and how we needed to adapt faster. At that time the pandemic, unemployment, economic growth, and unequal worldwide wealth were among the key issues. Fast-forward and change is still happening faster than we seem to be able to adapt. However, the issues are also changing. Today, inflation, the war in Ukraine, crime, trust, and mental health seem to have taken over our focus.
In any discussion about change, it’s imperative that we look at the process of managing change as well as the specific issues being affected by it. In particular, we need to consider parameters, institutions, and processes.
When it comes to disruptive change, we must remember that parameters change. For example, inflation (which was a key economic factor, but has been relatively dormant) has suddenly become relevant again. The concern is that we may view inflation as too much of a crisis rather than a parameter to be considered. For example, decades ago, I supervised a company in Mexico that collected payments every day because inflation could eat up their profits.
A critical issue in managing change is the increased impact of social, economic, and political volatility in our institutions. In particular, the social aspects, which are frequently disruptive and somewhat new, have been underestimated. These include the pandemic, partisan politics, increased income inequality, and crime. Commodities like lumber and wheat, which traditionally trade in narrow ranges, are doubling and halving in a few months. Disruptions like supply chain, labor shortages, chips, and baby formula are happening regularly. In addition, these disruptions can take months rather than weeks to resolve.
The pandemic and economic recovery have produced imbalances in processes that analysts have failed to consider adequately in AI and other tools. Timing and reacting to special events have been a major missing element, especially where supply chains have long lead times. In addition, the problems are not recognized early in the process and the extent of fixes is underestimated. We also misjudge the interaction among factors. For example, rates and shipping times are not balanced in considering ocean shipping issues. We also underestimate the impact of virtual monopolies in industries like baby formula and computer chips. Thus, minor disruptions can cause major crises.
AI and other tools also assume you have proper information and can develop accurate analysis. The biggest problem is bias, which is frequently unknown or unintentional. I am reading about Apple after Steve Jobs and finding that the analysis, expertise. and skills are very impressive. However, their efforts are guided by many strategies, expectations, and even, “What would Steve do?” As a result, the analytical decisions can be compromised.
Focusing on the processes and solutions relating to change can improve our responses:
- Parameters need to be managed to improve decisions.
- Understanding the risk, the rewards, and the importance of interconnected issues can improve outcomes.
- Don’t allow fear, uncertainty, or tradition to lower your potential and prevent you from trying something new.
This goes for both analytical and social issues. The realities and changes in parameters like populations, the economy, political environment, and social values should all be reviewed and considered regularly. The most important thing to keep in mind is that many variables are changing faster and more often than ever before. So, not only do you need to understand parameters, you need to keep up with the latest ones!
The bottom line is that change requires management and not just reaction. We can’t predict the future, but we can prepare for the unknown. Because how things change is just as important as what things change. When you have a better understanding of the “how,” you will be better equipped to respond to the “what.”
Related: Cultivate Success with Positivity