Can you survive the 5 tectonic shifts to the business landscape?

In his book "The Upside of Down," Thomas Homer-Dixon presents a theory of the crisis and renewal of societies.

The Canadian author and complexity expert of the Balsillie School of International Affairs describes how five tectonic shifts could lead to synchronous failure in our systems. Without knowing how or when breakdown may occur, cities and companies need to mitigate risks, foster resilience and seize opportunities.

In this Q&A, Homer-Dixon gives us his take on the upside of down.

Anna Clark: In your book, you lay out five "tectonic" stresses that are accumulating underneath the surface of our societies: population, energy, environmental, climate and economic stresses. You also point out how the rising speed of global connectivity and the escalating power of small groups to destroy things and people can multiply the effects. How can your concept of resilience help us prepare for changes that are unpredictable, yet inevitable?

Thomas Homer-Dixon: There are two prevailing notions of resilience. I call the first "engineering resilience," which defines resilience in terms of bouncing back to the status quo. A community, for example, is hit by a natural disaster or some other shock and if it's resilient, it bounces back to its prior state. I use "ecological resilience" to refer to a system's capacity to adapt to a rapidly changing environment. Ecological resilience involves deep change and continuous innovation through creative destruction. Both types of resilience are useful.

AC: You're here giving a keynote for The Dallas Institute of Humanities and Culture's conference, "What Makes a Resilient City?" I'm curious to know how you would extrapolate your concept of resilience from cities to companies?

THD: It is really important not to put all of one's eggs in one basket. Our world can change dramatically in a short period of time. Most adaptive systems have built-in diversity so that if one strategy doesn't work they can shift. In business, you may be lucky if you make single bets on one area, but diversity of investments and products is critically important for resilience. In terms of innovation and internal operations, we're learning that relatively flat hierarchies are more adaptive and provide greater creative output. Take a look at how 3M has institutionalized creativity. Companies need to institutionalize failure in order to give their people freedom to innovate in the face of change.

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