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Accelerating Performance by Sharon Toye, Colin Price

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CHAPTER 14Ripple Intelligence Join the Dots

Chaos theory tells us that the flapping of a butterfly’s wings in Tokyo can lead to a tornado in Kansas. Or that roads with cars moving at 35 mph or less can suddenly form massive traffic jams when someone merely taps his brakes and the effects cascade to other drivers. Drivers get to the end of the congestion, look around for an accident or some other cause and find nothing—because the cause was almost nothing. They drive off, confused.

The sort of system thinking that stems from chaos theory has shown up in some limited uses in the world of business, such as in manufacturing polymers and detecting leaks in coal mines, but the analysis in the executive suite still mostly compartmentalizes causes and effects rather than understanding their complex interactions in large systems. Our competitor did X, so we will do Y. A foreign government did Z, so let’s think about the implications for our business in that country. The fact is that X, Y, and Z all interact, along with A, B, C, and potentially a host of other variables. Once we do Y, competitors, customers, suppliers, and so forth will all react. That foreign government’s action will affect all the actors in that country, not just us, and will ripple through the region and perhaps the world. That ripple will intersect with the ripples caused by the actions that our competitors took and by our response, by our customers’ reactions, by our competitors’ reactions to those reactions, and ...

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