Bank Shot

Not solely, Tom Friedman wrote in last Sunday’s New York Times. But by triggering food shortages and spikes in food prices throughout the Arab world, climate change may well have had a hand in the civil unrest gripping the region­.

“The interplay between climate change, food prices (particularly wheat) and politics is a hidden stressor that helped to fuel the revolutions and will continue to make consolidating them into stable democracies much more difficult,” Friedman asserted, drawing on the research of Princeton scholar Anne-Marie Slaughter and others

Peter Drucker didn’t use the term “hidden stressor,” but he was quite aware of the way that seemingly unrelated events could affect one another in an increasingly interconnected world.

In some cases, Drucker suggested, it’s possible to get a handle on these conditions. “Turbulence, by definition, is irregular, nonlinear, erratic,” Drucker wrote. “But its underlying causes can be analyzed, predicted, managed.”

Other times, Drucker indicated, there’s little chance to predict or manage such situations. “The fastest growing field of modern mathematics is the theory of complexity,” Drucker wrote in The New Realities. “It shows, with rigorous, mathematical proof, that complex systems do not allow prediction.” Drucker pointed, for instance, to the “butterfly effect”—the famous phenomenon showing that “a butterfly flapping its wings in the Amazon rain forest can and does control the weather in Chicago a few weeks or months later.”

Modern economies, Drucker believed, function in much the same way.  “In any system as complex as the economy of a developed country, the statistically insignificant events, the events at the margin, are likely to be the decisive events, over the short range at least,” Drucker explained. “By definition they can be neither anticipated nor prevented.”

What does your organization do to try to monitor and manage events that may seem far afield but could, in fact, wind up impacting the heart of your operation?