I would usually start an article with some form of the following opening, “The rapid development of globalised economies and technological advancements has created a complex risk environment for businesses around the world to navigate carefully on their way to achieving set out objectives.”
The statement above is, in my mind borderline cliche and boilerplate, as in the year 2020 this has been known for quite some time. I am sure we are all quite aware that technology has made our world smaller and more transparent, leading to new and emerging risks which come with such new business and social environments.
We are more interconnected than ever in all aspects of our lives. An amazingly easy example of this to digest is the smartphone in your pocket. Leave this shiny device behind in a restaurant, Uber, or airplane and you feel like you have lost a part of your soul. The compass to your life is now wandering the world alone and scared, waiting for a reunion which may never come.
Currently, sitting on my lounge I can pay my bills, buy some stocks, turn off the lights, and play some great tunes – all on one device. This interconnectedness and the risks this device presents to disturbing our lives is ever present in life today.
These web of connections for businesses, communities, and individual lives is often referred to as “coupling”. This term can be loosely defined as the behaviors of independent systems interacting with other systems creating feedback loops whose effects are hard to trace.
The book Resilience: Why Things Bounce Back written by Andrew Zolli and Anne Marie Healey does one of the best jobs I have read on describing coupling and its impact on our ability to recover from adverse impacts, or going along with the theme of the book, being resilient.
The book highlights globalisation as one of the best examples of coupling, accelerating the loss of ‘adaptive capacity’ through the creation of a vast web of interconnected systems providing significant benefits – but in parallel with significant risks. Basically the larger the web, the more fragile the overall system. If one part fails it can cause disastrous ripples across the rest of the inter-connected systems.
These systems can remove resiliency, where if one part fails there is no buffer between systems where risk mitigation or adaption techniques can jump in to correct errors or issues before they turn into a significant problem.
In a way, coupling can resemble chaos theory’s most popular concept, “the butterfly effect”. A butterfly flapping its wings in the Amazon can cause a hurricane on the coast of the United States or a typhoon in Thailand.
The premise being small deviations in initial conditions can cause severe deviations in the future. Vastly interconnected systems possess the fragility and lack of resilience to fall prey to such adverse effects.
The current COVID-19 pandemic is a real-time example of coupling in action. The virus and the uncertainty surrounding the virus has caused massive impacts to the global economy, showing how one event can have dangerous ripple effects on a systemic level.
From real estate to transportation, no industry has been spared from the COVID-19 financial drain. It is all leading back to the capitalistic machine which keeps our nation running. It will be interesting to see studies completed in a few years on the overall global GDP impact from this terrible virus.
However, we as humans are resilient creatures and are actually quite good at surviving and learning from catastrophes. This allows us to become better prepared in the future, to sharpen our communal survival skills, if you will.
I for one believe COVID-19 will help businesses, communities, and individuals to re-evaluate current activity systems to observe how tightly coupled our ecosystems truly are. This will help us to identify resilience tactics to either mitigate or adapt to risks which can disrupt the interconnected web which makes our worlds spin.
The old ‘house of cards’ adage fits quite well in this conversation. In tightly coupled systems, if one card is removed the whole house can fall, leaving a disastrous scene we all hope to avoid. Being cognisant of areas of our lives or businesses which are highly leveraged on other systems/processes is a great way to mitigate and plan accordingly for the day further “COVID or COVID-like” events occur.
Stay vigilant out there and search within your own fragile webs for items or events that may be a disaster in disguise.