The butterfly effect

Technology, globalization and social progress have helped establishe dynamic and interconnected relationships. Some think we live in a Matrix. Others define our world as a complex system that is developing and spreading at high speed.
Why am I saying this? Because as we live, work and operate in this global system — whether we realize it or not — world events might impact our businesses, communities and livelihoods.
Naturally, we pay attention to the big events: conflicts, changes in political administrations, big business news and the lives of famous people. How much attention do we pay to smaller events or activities that may have a delayed effect in our daily lives?
Unexpected consequences
Wikipedia defines the butterfly effect as “the concept that small causes can have large effects. Initially, it was used with weather prediction but later the term became a metaphor used in and out of science.”
It means that corruption scandals in São Paulo, Brazil, could influence our lives in Pittsburgh. A potential mining labor strike in a foreign land could send commodity prices skyrocketing overnight. New ethnic instability in a small African country could lead to dramatic changes in global power dynamics.
These are just examples. But in the end, changes at the micro level might have far-reaching consequences at the macro level. This is part of living in a complex system where predictable and unpredictable events can precipitate, slowdown or multiply effects.
Pay attention
As business professionals, you need to anticipate and prepare your business and teams for these events. You have to have the mindfulness, open-mindedness and curiosity to listen to what is happening and make sense of it.
Previously, as a professor of global business, I would recommend five things to my business students:

1. Read, listen and watch to stay up to speed on what is relevant to your world. Spend time on Twitter and follow relevant professional organizations. Spend one to two hours a week reading general news and events.

2. Establish strong connections in and out of your personal and professional communities. Venture out of your bubble.

3. Attend local events of international associations, such as the World Affairs Council of Pittsburgh, GlobalPittsburgh and the Pittsburgh Regional Alliance.

4. Identify the proper signals. The key is to quickly process through the noise and fake news, to identify what truly matters.

5. Make fast decisions to avoid threats, anticipate delayed collateral damage and leverage potential opportunities before others.

Edward Lorenz, the father of chaos theory and the butterfly effect, explained this clearly: “When a butterfly flutters its wings in one part of the world, it can eventually cause a hurricane in another.”

The world is changing. It is changing fast, everywhere, at the same time. So, as business leaders, we have to pay attention. Or, in the words of Andy Grove, “Only the paranoid survive.”

Stephan Liozu, Ph.D. is the Chief Value Officer of Thales Group and an Adjunct professor at Case Western Reserve University, in Cleveland. Stephan specializes in disruptive approaches in innovation, pricing and value management.