POW! Your World Just Changed

Here’s an intriguing quote:

“We're entering an age of acceleration. The models underlying society at every level, which are largely based on a linear model of change, are going to have to be redefined. Because of the explosive power of exponential growth, the 21st century will be equivalent to 20,000 years of progress at today's rate of progress; organizations have to be able to redefine themselves at a faster and faster pace.”
- Ray Kurzweil, Author of The Age of Spiritual Machines

So, this really smart guy says that the “explosive power of exponential growth” is happening right now. What do you think? Is that true? Is that what it feels like where you work or live? Is the rate of change “explosive?”

There has been some argument on this. Is the rate of change actually accelerating, or has it always been like this?

There are two fields of thought. Either it’s like compounded interest. Or, it’s like the sudden jumping of an electron from one orbit to the next.

In the compounded interest theory, the changes feed on themselves. The interest we gain today is folded back into the principle and more interest is gained on that. I’m sure at some time in your life you were on one side or the other of compounded interest, whether you were falling behind on a credit card, or watching your savings account grow. The power of compounded interest is awesome.

But the exponential growth that Ray Kurzweil is referring to in the quote above seems to be something else indeed. He uses the words “explosive” and “exponential.” While a savings account or a credit debt might feel like it is growing exponentially, it’s not really the kind of “POW!” that Kurzweil is talking about. He’s talking about a sudden impact, like the meteor that hit the earth and wiped out the dinosaurs.

So, I’d like to spend a little time today talking about this POW! effect. I’d like to explore that idea and see if it’s really true. Is our world really taking the kind of exponential leaps that are described above? Today we’re going to talk about:

An example of the POW! effect.
The scientific background of POW!
The lessons of POW!

What POW! Feels Like

In the 1990’s a friend of mine, Bill, owned an appliance store selling everything from stereos to refrigerators. He had inherited the business from his father and his grandfather.

One day around 1995 Bill was on vacation visiting his cousin in California. While there, they went into a Costco warehouse store. Bill was going down the aisle looking at televisions when he spied a model that he had just started carrying in his own store. Bill stared at the Television for quite a long time. Actually, he stared at the price for a long time. The television in the Costco store was selling for less than Bill had purchased his stock from a wholesaler.

For Bill, the pace of change was not exponential. It was more like a thunderclap. POW! When we talk about the accelerated pace of change, it’s best to not just think about all of the tiny changes that are happening incrementally around us, but also those sudden culture shifts that happen in an instant, as it did to Bill.

You might be thinking to yourself, “OK, that example is so 20th Century!” Fair enough. Let me give you an example out of today’s headlines.

I work for John Deere [HUGE disclaimer here. Whatever I say on these pages does NOT represent Deere & Company or any of their companies, employees or customers. I’m simply writing as a private citizen.] Today I open up CNN.com and I’m reading about the world trade talks being held in Hong Kong. There’s an article about India's Trade Minister Kamal Nath. In the middle of the article Nath makes this comment that, to me, is stunning.

"They (the U.S. and the EU) have to awaken to the transition that they are no longer farmers to the world," Nath says. "They're not competitive. You can't try being artificially competitive and thrust your subsidies down our throats."

For me, this is a POW! moment. Now, I know that the CEO of Deere has a plan. He’s been marching the company down the path of sustainable growth for a long time. But this is the most I’ve understood the clear and compelling case for change. POW! My world just changed. My mental map has shifted forever.

A Scientific Explanation of POW!

The type of POW! experiences described above are being played out every day. Andy Grove, former CEO at Intel was a scientist before he was a CEO, so he tends to take a scientific approach to how he runs a company. Mr. Grove in his book Only the Paranoid Survive, described what he calls a “Strategic Inflection Point”.

Said Mr. Grove, “…let me just say that a strategic inflection point is a time in the life of a business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end.

“Strategic inflection points can be caused by technological change but they are more than technological change. They can be caused by competitors but they are more than just competition. They are full-scale changes in the way business is conducted, so that simply adopting new technology or fighting the competition as you used to may be insufficient. They build up force so insidiously that you may have a hard time even putting a finger on what has changed, yet you know that something has. Let's not mince words: A strategic inflection point can be deadly when unattended to. Companies that begin a decline as a result of its changes rarely recover their previous greatness.”

Remember that Andy Grove was a scientist before he was a CEO. He brings his understanding of physics to the business world.

Let’s talk about how this works. Phyllis Kirk in The Magic of Quantum describes what she calls the Kirk Model of Chaos. There’s a picture of this below. There is an animated version here.



Let me describe this in my own words. A system is basically at stasis until it is acted upon by an outside force. For those of us in the corporate world, we recognize that we are always being acted upon by an outside force. Markets change, customers change, employees change and the very nature of our business changes.

These outside forces deposit energy into our system. The system has to do something with that energy, and so it begins a process of agitation (or as Ilya Prigogine calls, it, perturbation). Eventually, the amount of energy input exceeds the system’s ability to deal with it and it reaches this explosion point, or point of bifurcation. At this point, the system will do one of two things – it will either be destroyed, or it will evolve to a higher level.

Now here’s the interesting part. The factor that decides if you die or evolve, whether you get to reinvent your company or you file for Chapter 11 is whether you are a closed system or an open system. Closed systems die. Open systems live to see another day, only in a more advanced state.

And, here’s one more point I find very interesting. Ms. Kirk, recognizing the dramatic impact of this final point calls it “the explosion point.” In other words, POW!

The Gift of POW!

So, that’s it? We don’t have a choice? What if I don’t want to go through POW!? Well, get over it. Change is coming. As I said in the last blog posting, don’t fight the river.

Companies who themselves cannot guarantee their own survival cannot assure you of lifetime employment. And the job you have today will dramatically change in unpredictable ways, so all you can do is prepare yourself for it. Change is coming whether we are ready or not.

In the next blog we’re going to look at some of the forces that are causing this type of sudden and explosive change, this POW! More importantly, we’ll explore what we can do about it as individuals.