The real sign that this wasn’t just any old “polycrisis” but a transformational inflection point in the “humanity” maturity curve was the recent news that investments in solar power are now more than that made in fossil fuels. This is a tipping point, hard to see in the midst of so much turbulence. The acceleration of the delta of changes occuring in society, technology, and the economy has created an immense volatility of conditions, where heuristics long established for sales and revenue margins and pricing are themselves in flux, creating what is becoming known as the cost of living crisis.
The world is beginning to pay the premium for the damages caused to the planet’s systems – a very complex socio-ecological-technological system. It is foolish to have put technology in the driver’s seat, it is not fundamentally responsible for life support in the manner that the ecological system is for all life on this planet and their wellbeing. Taken from the link above, this screen cap is from a dialogue that took place in December 2006. The three spheres are business, technology, and society (people) and they are only in tangential touch but enough to affect the stable equilibrium of others.
Gramsci called this a time of monsters. And so I have come to believe so.
Here are some of them. Others are less visible – the intangible socio-political forces that flow through any human communication and information system, for example. The WEF’s Global Risks assessment for 2023 places risks related to the climate crisis and environmental sustainability at the very top of risks with severe effects if not mitigated in the 10 year horizon from now. Drought is far more prevalent across the highly industrialized and technology dependent OECD countries but is less visible than the one that raged for years across the Horn of Africa. Countries like Finland have added emissions restrictions and policies on circularity of systems design with respect to resources and raw materials (inputs) which bring another highly complex layer of uncertainty as even the weather is becoming more unpredictable with more high risk events occurring with varying degrees of impact, frequency, and duration.
- Renewable energy for static and motive power
- Risk of severe impacts seen on the 10 year horizon dominated by Environmental ones
- Both the natural and the built environment are becoming more unpredictable
- Variables are Time (frequency, periodicity, duration) and Money (Cash; other things)
Until transformation completes across more than 50% of the system these volatile conditions of uncertainty, complexity, and unpredictability will most likely remain the norm. However, this being seen as a crisis rather than the natural operating conditions adds unnecessary stresses and strains to the system as tweaks are done to continue making it work. It is a waste of resources. We can learn from the enterprises and entrepreneurs in economic informality.
Within the economic system prevalent across the Horn of Africa and most of the continent’s markets entrepreneurship in economic informality is the norm and not the marginal. This is also a function of mindset and worldview, something I’ve been analysing from the buyer behaviour and purchasing patterns point of view since 2008, and is best reflected in the dominance of the prepaid business model of mobile service providers. People prefer to control the variables of Time and Money in their payment patterns because with informal economic behaviour as the dominant one for both rural and urban majorities, every syncs with everyone else with regard to expectations, assumptions, and thus the platform for trade and commerce negotiations.
Here, volatility of conditions and thus heuristic metrics for managing investments in inventory, spare parts, services, and sundry other business related costs such as electricity, phone, cleaning, and rental of premises are always in flux and a degree of uncertainty is certain and thus informs the design of people’s business and revenue models. Even during the three waves of the Covid-19 pandemic that washed incomes off the table in Kenya – incomes were slashed between 60% to 90% in Nairobi’s informal settlements in the very first wave itself and the true strength and resilience of the informal perishable fresh produce sector – one of the most high risk value chains since cold chains are not the norm, yet – became visible. Stretched tight, the informal urban food system coped with the loss of the restaurant and cafeteria trade and supplies of fresh vegetables continued to flow into slums and fancy neighbourhoods, alike. The last mile of this regional network of trust and referrals are women who sell a handful of tomatoes in the hot sun at their regular spots across Nairobi’s informal settlements, the foundation of the informal economy.
As the “polycrisis” conditions create uncertainty and unpredictability of operations, they will only become more volatile as the entire human-made system undergoes a massive transformation towards a smaller footprint on the planet and less belching of smoke. Industrialization was great but now we must become more responsible. Why is aiming for steady state growth so boring? A mature species does not act irresponsibly about its habitat, shelter, and food supply.
From the commercial point of view, everything from management information systems (MIS) to energy consumption both during the manufacture as well as during lifetime of use are factors that must change to future-proof organizations and institutions in a robust and resilient manner. I have been looking at frameworks for diagnosis that can hold up in volatile operating conditions, that is they are not dependent on factors that are undergirded by assumptions of stability and low cost disruptions. Predictability is a weakness in metrics and heuristics and the informal tomato wholesalers – a high risk perishable product with immense waste potential and loss of revenues, another example is eggs – were able to rapidly respond to changes in purchasing patterns through adjustment of orders made at the farmgate. Their decision making capacity can be improved through introduction of well-designed information management tools; these need not be complicated or require any technological artefact more than a pencil and a piece of paper.
- Heuristics are disrupted and volatile conditions prevent standing orders
- Systems designed in stable conditions are under immense strain
- Outcomes are still volatile.
- New risk mitigation procedures must be developed.
- Supply and demand ecosystem comprising suppliers, customers, and service providers is also in flux
- Regulatory pressures require investments across the entire path-to-market product development life cycle. For example, ESG, circularity, and emissions
Future-proofing diagnostics when metrics and customary indicators are uncertain and unpredictable
I will continue this analysis elsewhere and link back here.
