Feeling Paralyzed By Unpredictable Change? What You Can Learn From Ebola About Innovation30 May, 2018 / Articles
As new fears about Ebola start to emerge in Congo today, we recall the Ebola outbreak of 2014: one of the deadliest epidemics to ever hit the human race, with a case fatality rate of up to 90%, which claimed more than 11,000 lives. This was not the first Ebola outbreak; there had been three dozen occurrences before 2014, which were quickly contained. The worst previous outbreak affected fewer than 450 people. What made the Ebola outbreak of 2014 spin so out of control, and what can we as leaders learn from that process?
New variables were introduced to the equation—i.e., new roads and political instability. The epicenter of the disease was the village of Guéckédou, Guinea, bordering Sierra Leone and Liberia at the intersection of the three countries. Up to this point, all previous outbreaks occurred in remote villages, not at a population hub. Additionally, all three countries had recently emerged from prolonged periods of conflict and political instability, which pushed the limits of the health-care system that was already treating many injured patients.
The level of interdependence among the variables was higher than in previous cases. This interdependence among the related variables—i.e., political instability and weakened hospitals, labs, and health-care personnel—was much more pronounced than before, because the outbreak happened in a more developed, central location with a lot more moving parts, each playing specialized roles and more deeply interconnected with other parts than in remote villages. The increased interdependence among all these variables contributed to the failure of the entire health-care system when the inflow of patients exceeded the health-care system’s ability to contain it.
The speed of interaction among the variables was faster than in previous cases. The prefecture of Guéckédou had newly installed roads all around it. The accelerated transportation at the junction of three countries enabled the disease to travel much faster than in previous outbreaks.
The density of interaction among the variables was higher. The population density of all three countries, and throughout Western Africa, has been increasing dramatically since the mid-1990s and early 2000s, ranging from 35% to 80%.
As a result of the 2014 Ebola outbreak, the World Bank estimated that somewhere between $2.2 billion and $7.4 billion in GDP was lost in 2014, and another $25.2 billion in 2015 in Guinea, Liberia, and Sierra Leone. If you are a leader of an organization in that region, the ripple effect of something you cannot control over can be devastating. It requires a totally new framework to manage this level of unpredictable complexity.
The same phenomenon of complexity prevails in our businesses, but our tools and skills have not kept pace. Effective leadership must change with the times to reflect the changes happening in the environment. The Industrial Revolution catapulted the world from feudal society to the twentieth century. Now we are in the midst of (some even say post) another megatrend of the same magnitude that is reshaping the world: the Digital Revolution. Effective leadership must be redefined to reflect this reality.
The same four factors have dramatically increased the level of complexity in our current business environment.
The increased number of new variables introduced. The number of interdependent variables and the resulting permutations of outcomes a leader must consider to make good decisions are exploding.
The increased speed of interaction among those variables. It took 99 years for the telephone, invented in 1876, to reach 90% of US households, but only twenty years for the cell phone, first sold in 1984, to achieve the same 90% penetration level. The internet spread even faster.
The increased density of population and resulting higher density of interactions. As economic standards rose and lengthened life expectancy, world population increased exponentially. The resulting density creates more frequent interactions among the members of and entities in economies, which increases the level of complexity.
The increased degree of interdependence among all variables involved. As the number, speed, and density of variables multiply, the degree of interdependence among variables does too, producing a butterfly effect. Because of the sensitive dependence on initial conditions, when variables are interdependent, a minor change in one state causes large effects at a later stage. The increasing level of interdependence and the resulting unpredictability in the world today makes doing business very challenging for leaders.
A combination of these four mutually reinforcing conditions can quickly push a phenomenon over the tipping point from predictable to uncontrollable. Radical innovation demands new approaches and reactions from current market leaders—or face the consequences. A Silicon Valley startup from a garage can render an existing player’s business model irrelevant overnight.
As a leader facing a more complex environment, what must you do? You need to harness those four factors, which can cause destructive wildfires of disease or astounding business success. Stay tuned for Part II: how to harness complexity.