In a complex world, how can rethinking everything bring you clarity?

In a more volatile and interconnected environment, growth entails rethinking fundamental questions and learning from diverse disciplines.

In brief

  • In a few short years, the business environment has become more complex; changes are coming faster, they are more interconnected and concurrent. 
  • Many established best practices will no longer work in a world of increasing complexity.
  • To thrive in this environment, leaders will rethink — questioning assumptions, practices and incentives at both the organizational and the individual level.

It’s been more than a quarter century since Clayton Christensen published The Innovator’s Dilemma. This groundbreaking book laid out the key behavioral trap of the information technology era: in a world of disruptive innovation, the very behaviors that drove success in the past would doom companies to fail in the future — such as focusing on needs of (existing) customers or making investment decisions in disruptive technologies based on their near-term contribution to quarterly earnings.

By now, the lessons of disruptive innovation are well known and internalized by companies. Across sectors, firms are actively working to deploy breakthrough technologies and explore new business models.

But even as companies have embraced disruptive innovation, the business climate has become more complex. Since about 2020, we have entered a new paradigm, characterized by changes that are more forceful, appear more quickly, trigger more interconnected and widespread impacts, and often strike all at once.

Business leaders are aware of the new environment and grappling with it. Even as early as 2021, an EY survey of global board directors1 showed 87% of respondents agreed that “market disruptions have become increasingly frequent,” and 83% agreed that “market disruptions have become increasingly impactful”. Meanwhile, only about half (52%) of respondents felt their company is effective at “understanding how different risks are interconnected”.

Are there new behavioral traps — new innovator’s dilemmas — created by this more complex environment? What existing best practices will no longer work, and what new behaviors are needed to thrive? How should companies rethink their assumptions, practices, strategies and incentives? What new best practices can we glean from disciplines such as behavioral science, complexity science, chaos theory and network theory?

Over the course of several months, we will explore these issues in our “Rethink Agenda” through a series of articles on five core challenges that require rethinking by companies across sectors: intelligence, transformation and leadership, business models, experience, and trust and risk.

Spinning chain swing ride at Puyallup Fair, Puyallup, Washington, United States

Chapter 1

A new paradigm

Faster tech adoption, interconnected risks and rising complexity are here to stay.

While disruptive forces and complex business environments have been with us for decades, things have become more heated since about 2020. This is being fueled by three drivers:


1. Faster tech adoption


Twitter (now known as X) took two years to reach the million-user mark, while Facebook took ten months and Instagram 2.5 months. ChatGPT reached the same milestone in five days. The blistering pace continued after its launch, as subsequent large language model (LLM) releases developed new capabilities at an astonishing pace, even by the standards of tech.


These product launches build upon a larger acceleration of technology adoption kicked off by the pandemic, which hastened the adoption of virtual work, distance learning and telehealth. Futurists’ long-term predictions about the future of work were sped up by years. More recently, the arrival of generative AI (GenAI) has sped up forecasts of the achievability of artificial general intelligence, or AGI.


But GenAI isn’t just about the increasing speed of tech disruption; it is also about increasing scale. It has the potential to unleash far-reaching impacts across economies and societies, well beyond changes driven by social media or the web. If the personal computer was the foundational technology that birthed the last industrial revolution, AI is the foundational technology that will power the next. For companies, it promises to drive efficiencies and growth opportunities, by facilitating new capabilities, disrupting business models and reshaping sectors. For societies, it could provide new solutions to pressing challenges, from climate change to the education gap.

2. Growing and increasingly interconnected risks


Extreme weather events, the COVID-19 pandemic and the war in Ukraine were early instances of risks, long considered unlikely, which are now expected to occur with greater frequency. The reason such risks — not just pandemics and wars, but also sovereign debt crises, social unrest, infrastructure loss, and strains on resources such as food, water and energy — are becoming more likely with time is the consequence of universal biases, as documented by behavioral scientists.


For instance, the tendency to excessively discount the impact of future events (known as “hyperbolic time discounting”) has led us to put off corrective action for decades on trends such as climate change, economic inequality and antibiotic resistance. This cumulative neglect makes it more likely with each passing year that these growing trends could set off extreme weather events, social unrest or a bacterial pandemic.


And, in today’s interconnected world, these crises are also increasingly correlated, meaning that when one hits, it can set off many others — as happened with scores of downstream impacts during both the COVID-19 pandemic and the war in Ukraine.


3. Rising complexity


Most of us sense, whether empirically or intuitively, that the world is becoming more complex, and that this has been happening for a while. For instance, as supply chains went global and ultra-lean over several decades, they became incredibly complex — creating vulnerabilities that the COVID-19 pandemic laid bare. In response, many companies have diversified their supply chains to make them more resilient. This has involved replacing reliance on one country (China, for example) with operations across several countries — which is making supply chains even more complex.


Geopolitical shifts are contributing to complexity of the global system. The world order has shifted toward multipolarity, in which a greater number of powerful actors are shaping an increasingly complex global system. Multipolarity will continue to create challenges in global policy coordination, elevating the uncertainty and severity of any new crises that may emerge.


Climate change is increasing the complexity of the planetary climate system. We have already crossed six of nine sustainable planetary boundaries. This is creating multiple feedback loops (e.g., as the ice caps melt, they release trapped methane and replace bright sea ice with dark sea water — further accelerating global warming) which could tip over into rapid, irreversible change. Many of these effects are unprecedented in the history of human civilization, making them novel challenges for climate models — and even rendering some models obsolete.


The complexity of different systems is increasing not just because of trends within each system, but also because of the connections across systems. Extreme weather, for instance, doesn’t just make the climate system more complex — it also makes supply chains more complex. From the 2021 “deep freeze” in Texas that disrupted refining and petrochemical supply chains, to floods in China that unsettled supply chains across scores of industries, companies are increasingly needing to factor in such contingencies in their supply chain planning. 


These trends are driving a series of disruptive events — what some have dubbed the “polycrisis” or “permacrisis.” The COVID-19 pandemic spurred the most sudden mass job loss and shortest-lived recession in history. Big tech stocks have been on a roller coaster in recent years, soaring during the pandemic, before becoming the hardest hit sector 2022 — and then ricocheting again to new highs in 2023 on the back of GenAI. Extreme weather is driving a new phenomenon of “weather whiplash,” as opposite weather extremes — such as floods in the middle of a drought — strike the same locations simultaneously or in quick succession, in places such as Australia, the Horn of Africa, and Zhengzhou, China.


To illustrate how the combination of multiple trends is driving complexity and risk, we constructed four indices to measure climate disruption, geopolitical uncertainty, economic uncertainty, and technological disruption. While these are not intended to be comprehensive metrics or precise predictors, they demonstrate how a steady rise in multiple trends over the past decade is challenging organizations to operate in an increasingly complex and disruptive environment. 


Over the past decade, organizations have operated in an increasingly complex, volatile, and disruptive environment. This rise is driven by multiple factors:

Boy leaning on a window sill looking through a train window

Chapter 2

The rethink agenda

A more complex and volatile future requires a new way of thinking.

A more complex and volatile environment requires leaders to rethink core assumptions about the world, as well as key aspects of their strategy and operations.

Rethinking includes learning from diverse disciplines. The field of complexity science, for instance, suggests that organizations thrive in complex environments by encouraging diversity and disagreement, and by organizing around networks rather than hierarchies. However, another discipline, behavioral science, finds that cognitive biases at the individual level — and organizational behaviors at the enterprise level — can inhibit the implementation of these practices.

“The human need for belonging and agreement can lead teams to seek alignment by closing down diverse opinions and perspectives,” says Jennifer Garvey Berger, co-founder and CEO of Cultivating Leadership. “Meanwhile, our desire to control things often creates simplistic and hierarchical control mechanisms within organizations. Such mind traps hamper companies from thriving in a complex world.”

Rethinking involves questioning and reshaping legacy behaviors in organizations, from risk management frameworks that approach risk in a linear way, to incentive systems that reward certainty.

“The process of rethinking is not about iterating to the ‘right’ answer — it is about iterating to better and better questions.” says Beau Lotto, Neuroscientist and Founder and CEO of Lab of Misfits. “But companies don’t typically create cultures that reward questions; they reward answers and competition. They don’t reward doubt; they reward certainty. This is particularly relevant for leaders because it is especially difficult for leaders to admit doubt. Yet you never evolve from knowing; you only ever evolve from not knowing.”

These examples illustrate a larger truth. While many of today’s best practices were developed for a world of disruptive innovation, they may not be right-sized for the more complex and volatile future we have started to enter. Identifying which organizational behaviors need to be rethought — and how they need to be rethought — requires approaching the question in a deliberate, structured and comprehensive way.

To facilitate the process, we are launching the Rethink Agenda. We will kick off the conversation in San Francisco at Innovation Realized 2024, our annual peer-to-peer immersive event designed to catalyze boundary-breaking collaborations between C-suite executives. Beyond the event, we will explore five perspectives of the Rethink Agenda that will increasingly be on companies’ radars:

Rethink intelligence

Artificial intelligence is poised to enter the realm of human thinking and creativity like no technology before it. Many think AGI — once the realm of science fiction — may soon be within reach. Meanwhile, brain-computer interfaces promise seamless connections between our carbon- and silicon-based brains. The rise of quantum computing could transform AI in significant ways.

But if technology will think for us, it will also think different. This will reshape intelligence in fundamental ways — with significant implications for any company with knowledge workers. Other workplace trends — such as increased cognitive diversity that includes neurodiverse individuals and artists — will also impact the future of intelligence. Workers will need new skills and capabilities.

Rethink experience

Companies are increasingly recognizing the transformative capacity of experiences. In a world where emerging technologies provide ever more channels to connect with customers, and where the attention and trust of consumers is an increasingly elusive commodity, creating delightful, empathetic experiences can boost brands and build customer loyalty.

Consumer-facing firms will thrive by understanding the key pillars of powerful user experiences that unlock value for brands and build enduring relationships with customers. Breakthrough technologies — GenAI, spatial computing, the brain-computer interface — will enable new hyper-personalized experiences combining physical and digital. Consumers will play a key role in co-creating the experiences of the future.

Rethink business models

Business model disruption is nothing new. It’s been with us for decades, driving companies to increasingly focus on adopting new technologies and expanding their business models. But the last few years have also been full of surprises, from GenAI’s astonishing ability to take on creative work — something most expected AI to struggle with — to the scores of unexpected knock-on impacts of the COVID-19 pandemic and the war in Ukraine.

Everyone is expecting disruption, but the disruption we are expecting may not be the disruption we get.

Emerging technologies — not just GenAI, but also Web3, quantum computing and human-machine interfaces — will impact value propositions of incumbent companies across sectors, in often unexpected ways. So will other disruptive forces, from generational shifts to changing consumer expectations. This environment demands new approaches to business model innovation. For instance, companies will rethink their scanning function to better identify new disruptors in a faster-paced, more complex world.

Rethink enterprise transformation

Leaders have traditionally been able to set and execute a five-year strategy, confident it would still be relevant by the time it was implemented.

This is no longer the case. Today, the increasing pace of disruption means market conditions can rapidly and unexpectedly shift, diminishing the potential value of a strategy before it’s even been implemented. External disruptions such as geopolitical events are not only accelerating the need for organizations to transform, but increasingly threatening the success of transformations already in-flight — almost half (48%) of transformations in the past five years have been impacted by a significant external disruption.

Unlocking value and driving growth in this volatile environment requires shifting from a fixed strategy to a more flexible “strategic direction.” It also requires rethinking transformation itself, to make it more adaptive to changing market conditions and shifts in market direction.

Rethink trust and risk

The trust and risk landscape has shifted dramatically in recent years. Trust has been steadily eroding across a broad swath of countries, sectors and stakeholders. Meanwhile, an environment of greater volatility and interconnectedness has made the risk landscape significantly more challenging.

Consider how GenAI is creating unprecedented risks — hidden inaccuracies and hallucinations, deeply convincing deep fakes and misinformation, legal exposure to intellectual capital infringement, and a new level of sophistication in cyber-attacks. This, in turn, increases the imperative to boost trust in the ways in which AI is used and the fidelity of its outputs, which will be critical for sustained widespread adoption.

Other trends — from shifting workplace expectations to economic inequality and demographic shifts — will also heighten trust challenges. Multiple trends, from climate change to geopolitical turbulence, will make the risk landscape more taxing.

To thrive in this climate, companies will need to identify the new trust challenges over the horizon. They will rethink risk management approaches for a time in which risks are increasingly interconnected. Breakthrough technologies could provide part of the answer — from the use of Web3 tools for authentication, to GenAI co-pilots that provide employees with a digital risk manager by their side.


For decades, disruptive innovation drove companies to rethink fundamental questions. Who are our competitors? What is our value proposition? What business are we even in?

Today’s complex environment will surface new questions. How will AI and brain-computer interfaces reshape intelligence — and impact Talent and Marketing? How will GenAI challenge our assumptions — and our business model? In an increasingly volatile and interconnected world, how should we rethink risk? 

Rethinking these questions requires a deliberate and collaborative approach. Learn from other disciplines. Partner to expand possibilities. Rethink your assumptions to reinvent your business and reframe your future.

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