Andrew Zolli

This summer, while America was suffering through a mega-drought that plunged half the country into a state of emergency, and India was experiencing the largest blackout in history, a group of Chinese scientists were undertaking a remarkable voyage. Aboard the world’s largest icebreaker, the Xue Long, (or ‘Snow Dragon’) they charted a course through what was once called the “Northeast Passage”, over Russia through the record-setting melting Arctic sea ice, finally docking in Reykjavik, Iceland.

China is obviously not an Arctic country, but that has not prevented it, like many other nations, from taking a keen interest in the region – scientifically, diplomatically, and commercially. In fact, the Chinese seem intent on playing a leadership role in this part of the world, particularly in Iceland, which has vast geothermal and hydroelectrical capacity (much of it currently used, controversially, to power aluminum smelters). In the capital of this small country of 320,000 people, the Chinese are constructing a truly massive embassy, with room for up to five hundred people. (The American embassy, presently the largest, holds about seventy.)

Why build something so big? Partly, to broadcast China’s presence, and partly to act as a basis of operations for the whole region, particularly those involving access to rich mineral and oil and gas resources of nearby Greenland. These may include up to 25% of the world’s reserves of rare earth metals, which are used to make magnets used in everything from cell phones to wind turbines to precision-guided munitions. (Much to the chagrin of folks at the Pentagon, China currently has about 95% of the world’s current supply.)

Indeed, plans are already being drawn up to open a huge iron ore mine in Greenland that could, overnight, swell the population of the country by 4% with Chinese workers – and that’s just from one project alone. This poses a challenge to the country’s 57,000 citizens – many of them indigenous Kalaallit – just as it does to their Icelandic neighbors (and Africans, and many others): how to admit the interests of the insatiable global extractive economy into their country in a controlled way, while trying to conserve one of the world’s pristine – and globally essential – ecosystems.

Amid these moves in a new ‘great game’ in Arctic energy, materials, and transport, something can easily be lost – the vastly greater global importance of the disappearing Arctic ice itself. The Chinese scientists aboard the Snow Dragon were there because, much like every nation – including the United States – China has to worry both about finding and extracting vast quantities of natural resources to power its growth, and about the consequences – in the form of melting ice, rising sea levels, and threats to its coastal cities – of those very extractive processes. (These threats don’t just include increasing risk from severe weather events, but also from things like the contamination of drinking water by rising seawater.)

The health of the planet’s ice is implicated in all of this, as Iceland’s President Olafur Grimsson shared with me a few days ago on a visit to Reykjavik. In our wide ranging conversation, he mentioned two things that deeply impressed me: first, that, in his international travels, nations as far away as Singapore and South Korea – realizing they have a stake in what he calls the ‘Global Arctic’ – continuously express interest in joining the Arctic Council, an intergovernmental body that addresses issues faced by regional Arctic governments and their indigenous people.

Second, President Grimsson also suggested a compelling agenda-item for Obama’s second term: convening an international Summit to directly address our shared, civilizational interest in the State of the Ice, and to generate what he called an “AHA” moment, which stands for the Arctic, Himalayas and the Antarctic – the three major ice centers on the planet. You can read about both of these and other compelling ideas in this transcript of a terrific speech he gave on the subject at the Arctic Imperative Summit, held earlier this year in Alaska.

It’s clear we need a moment of global focus and rule setting, or the new Wild West may be the Wild North.

Image credit: United Nations Photo

Later this week, I’ll be traveling to Jeddah, Saudi Arabia, for a very special event – the official launch of the i2 Institute, a new organization dedicated to building an ecosystem of entrepreneurship and social innovation for scientists, technologists and engineers in the Middle East and beyond.

I2 is the brainchild of my friend and colleague, the biotechnologist Hayat Sindi. Hayat is one of those people whose career path is as improbable as it is extraordinary.  She left her home country, went to the UK alone, got into Cambridge, then MIT and Harvard to do her post-doc work. There, in one of the preeminent chemistry labs in the US, run by George Whitesides, she helped launch a breakthrough medical diagnostics company called Diagnostics For All – which is developing ultra-low cost medical tests for critical health conditions.

Hayat’s fierce determination and abundant talent has been widely (and rightly) lauded in her home region and around the world – she was the only person to receive both a PopTech Social Innovation Fellowship and a Science Fellowship; she has since been named a National Geographic Emerging Explorer and was recently named a UNESCO World Ambassador for Science, among many other justly-deserved honorifics.

When Hayat met with Leetha Filderman and I in a Camden, Maine coffeehouse, after her first PopTech gathering in 2009, she laid out a big challenge, and an equally bold vision to address it. Her remarkable experience – not just pursuing scientific work at the highest level, but also working to see it translated from a research context into a company – is comparatively rare, at least by the standards of her home region. This isn’t for lack of talent – the Middle East is full of brilliant people. Instead, what is often lacking is an ecosystem – not just of money, but of mentors, colleagues, role models and institutions who could provide the services, encouragement, peer support, skills training and connectivity to help turn scientists’ and engineers’ research ideas into applied innovations that create wealth, employment, and prestige.

The consequences of the absence of this gap are significant. For example, according to NPR, the unemployment rate for college-educated men in Saudi Arabia is and eye-popping 44%. That number is an proxy for countless stories of people unable to realize their dreams and contribute to the richness of society and the world. And, as Hayat told us, it’s a story that is repeated, in different ways, across the region.

Hayat wanted to tackle this enormous challenge, and she had a clear vision of how to do so – to create a new kind of institution, starting in her home country, which could become the hub of a network of high-capacity innovators who could blaze a new path, and themselves become role models for the next generation.

So, over the next two years, with PopTech’s enthusiastic early support, she marshaled world-class resources (including the renowned strategic design firm Wolff Olins, and later McKinsey, as well as signing on MIT and Harvard). These would be essential to the task of scoping, communicating and delivering the elements of her vision.

After much work, next week, in Jeddah, Hayat’s vision will become reality: the Institute for Imagination and Ingenuity – i2 – will officially launch, opening the nomination process for its first round of Fellows.

I’m delighted to be speaking at the launch, joining innovation and design luminaries like Joi Ito of the MIT Media Lab, noted digital thinker and venture capitalist Esther Dyson, Robert Fabricant of Frog Design, and Greg Brandeau of Pixar and Next. We will be joined by HRH Prince Khalid Al-Faisal Al-Saud, as well as Mohamed Al-Mady, the Chief Executive Officer of SABIC, Abdul Aziz Al Khodary, deputy Governor  of Mekkah, and Arif Naqvi, the founder and Chief Executive Officer of Abraaj Capital, among others. I’ve also joined i2’s Board of Directors as a charter member.

It’s been an honor to play a small part in all of this, but it’s been ten times more inspiring to have watched Hayat undertake the never-easy, always-exhausting process of putting together a new organization from scratch. She is part of a global ‘reaspora’, which is the opposite of a diaspora: global elites, educated in the world’s best institutions, who could live and work anywhere in the world, but who choose to return to their home regions to labor on issues of critical social significance. That makes Hayat not only a social innovation hero, but also an embodiment of the very principles she seeks to inspire in others.

Image Credit: I2 Institute

An edited version of this essay appears today as an Op-Ed in the New York Times:

For decades, people who concern themselves with the world’s “wicked problems” — interconnected issues like environmental degradation, poverty, food security and climate change — have marched together under the banner of “sustainability”: the idea that with the right mix of incentives, technology substitutions and social change, humanity might finally achieve a lasting equilibrium with our planet, and with each other.

It’s an alluring and moral vision, and in a year that has brought us the single hottest month in recorded American history (July), a Midwestern drought that plunged more than half the country into a state of emergency, a heatwave across the eastern part of the country powerful enough to melt the tarmac below jetliners in Washington and, most recently, the ravages of Hurricane Sandy, it would seem a pressing one, too.

Yet today, precisely because the world is so increasingly out of balance, the sustainability regime is being quietly challenged, not from without, but from within. Among a growing number of scientists, social innovators, community leaders, NGOs, philanthropies, governments and corporations, a new, complementary dialogue is emerging around a new idea, resilience: how to help vulnerable people, organizations and systems persist, perhaps even thrive, amid unforeseeable disruptions. Where sustainability aims to put the world back into balance, resilience looks for ways to manage an imbalanced world.

It’s a broad-spectrum agenda, which, at one end, seeks to imbue our communities, institutions and infrastructure with greater flexibility, intelligence and responsiveness to extreme events, and at the other centers on bolstering people’s psychological and physiological capacity to deal with high-stress circumstances.

For example, “resilience thinking” is starting to shape how urban planners in big cities think about updating antiquated infrastructure, much of which is robust in the face of normal threats like equipment failures but — as was just demonstrated in the New York region — fragile in the face of unanticipated shocks like flooding, pandemics, terrorism or energy shortages.

Combatting those kinds of disruptions isn’t just about building higher walls — it’s about accommodating the waves. For extreme weather events, that means developing the kinds of infrastructure more commonly associated with the Army: temporary bridges that can be “inflated” or repositioned across rivers when tunnels flood, for example, or wireless “mesh” networks and electrical microgrids that can compensate for exploding transformers.

We’ll also need to use nature itself as a form of “soft” infrastructure. Along the Gulf Coast, civic leaders have begun to take seriously the restoration of the wetlands that serve as a vital buffer against hurricanes. A future New York may be ringed with them too, as it was centuries ago.

Hurricane Sandy hit New York hardest right where it was most recently redeveloped: Lower Manhattan, which should have been the least vulnerable part of the island. But it was rebuilt to be “sustainable,” not resilient, noted Jonathan Rose, an urban planner and developer.

“After 9/11, Lower Manhattan contained the largest collection of LEED-certified, green buildings in the world,” he said, referring to a common standards program for eco-friendly design. “But that was answering only part of problem. The buildings were designed to generate lower environmental impacts, but not to respond to the impacts of the environment” — for example, by having redundant power systems. In an age of volatility, the extremophilic trumps the ecoperfect.

The resilience frame speaks not just how buildings weather storms, but how people weather them, too. Here, psychologists, sociologists and neuroscientists are uncovering a wide array of factors that make you more or less resilient than the person next to you: the reach of your social networks, the quality of your close relationships, your access to resources, your genes and health, your beliefs and habits of mind.

Based on these insights, these researchers have developed training regimes, rooted in contemplative practice, that are already helping first responders, emergency-room physicians and soldiers better manage periods of extreme stress and diminish the rates and severity of post-traumatic stress that can follow. Researchers at Emory University have shown that similar practices can bolster the psychological and physiological resilience of children in foster care. These tools will have to find their way into wider circulation, as we better prepare populations for the mental, and not just physical dimensions of disruption.

There’s a third domain where resilience will be found, and that’s in big data and mobile services. Already, the United States Geological Survey is testing a system that ties its seismographs to Twitter; when the system detects an earthquake, it automatically begins scanning the social media service for posts from the affected area about fires and damages.

Similar systems have been used to scan blog postings and international news reports for the first signs of pandemics like SARS. And “hacktivists” are exploring ways to extend the power of the 311 system to help people not only better connect to government services, but to better self-organize in a crisis.

In a reversal of our stereotypes about the flow of innovation, many of the most important resilience tools will come to us from developing countries, which have long had to contend with large disruptions and limited budgets.

In Kenya, Kilimo Salama, a microinsurance program for argiculture, uses wireless weather sensors to help small farmers protect themselves financially against climate volatility. In India, Husk Power Systems converts agricultural waste into locally generated electricity for off-grid villages. And around the world, a service called Ushahidi empowers communities around the world to “crowdsource” information during a crisis using their mobile phones.

None of these is a permanent solution, and none roots out the underlying problems they address. But each helps a vulnerable community contend with the shocks that, especially at the margins of a society, can be devastating. In lieu of master plans, these approaches offer a diverse array of tools and platforms that enable greater self-reliance, cooperation and creativity before, during and after a crisis.

Yet as wise as this all may sound, a shift from sustainability to resilience leaves many old-school environmentalists and social activists feeling uneasy, as it smacks of adaptation, a word that is still taboo in many quarters. If we adapt to unwanted change, the reasoning goes, we give a pass to those responsible for putting us in this mess in the first place, and we lose the moral authority to pressure them to stop. Better, they argue, to mitigate the risk at the source.

In a perfect world, that’s surely true, just as it’s also true that the cheapest response to a catastrophe is to prevent it in the first place. But in this world, vulnerable people are already being affected by disruption. They need practical, if imperfect adaptations now, if they are ever to get the just and moral future they deserve tomorrow.

Unfortunately, the sustainability movement’s politics, not to mention it’s marketing, have led to a popular misunderstanding: that a perfect, stasis-under-glass equilibrium is achievable. But the world doesn’t work that way: it exists in a constant disequilibrium — trying, failing, adapting, learning and evolving in endless cycles. Indeed, it’s the failures, when properly understood, that create the context for learning and growth. That’s why some of the most resilient places are, paradoxically, also the places that regularly experience modest disruptions – they carry the shared memory that things can go wrong.

“Resilience” takes this as a given, and is commensurately humble. It doesn’t propose a single, fixed future. It assumes we don’t know exactly how things will unfold, that we’ll be surprised, that we’ll make mistakes along the way. It’s also open to learning from the extraordinary and widespread resilience of the natural world, including its human inhabitants, something that, counterintuitively, many proponents of sustainability have ignored.

That doesn’t mean there aren’t genuine bad guys and bad ideas at work, or that there aren’t things we should do to mitigate our risks. But we also have to acknowledge that holy war against boogeymen hasn’t worked, and isn’t likely to anytime soon. In its place, we need approaches that are both more pragmatic and more politically inclusive — rolling with the waves, instead of trying to stop the ocean.

This essay appears today on the website of the Harvard Business Review:

This July, aviation officials released their final report on one of the most puzzling and grim episodes in French aviation history: the 2009 crash of Air France Flight 447, en route from Rio de Janeiro to Paris. The plane had mysteriously plummeted from an altitude of thirty-five thousand feet for three and a half minutes, before colliding explosively with the vast, two-mile-deep waters of the south Atlantic. Two hundred and twenty eight people lost their lives; it took almost two years, and the help of robotic probes from the Woods Hole Oceanographic Institute to even find the wreckage. The sea had swallowed them whole.

What — or who — was to blame? French investigators identified many factors, but singled out one all-too-common culprit: human error. Their report found that the pilots, although well-trained, had fatally misdiagnosed the reasons that the plane had gone into a stall, and that their subsequent errors, based on this initial mistake, led directly to the catastrophe.

Yet it was complexity, as much as any factor, which doomed Flight 447. Prior the crash, the plane had flown through a series of storms, causing a buildup of ice that disabled several of its airspeed sensors — a moderate, but not catastrophic failure. As a safety precaution, the autopilot automatically disengaged, returning control to the human pilots, while flashing them a cryptic “invalid data” alert that revealed little about the underlying problem. Confronting this ambiguity, the pilots appear to have reverted to rote training procedures that likely made the situation worse: they banked into a climb designed to avoid further danger, which also slowed the plane’s airspeed and sent it into a stall.

Confusingly, at the height of the danger, a blaring alarm in the cockpit indicating the stall went silent — suggesting exactly the opposite of what was actually happening. The plane’s cockpit voice recorder captured the pilots’ last, bewildered exchange:

(Pilot 1) Damn it, we’re going to crash… This can’t be happening!
(Pilot 2) But what’s happening?

Less than two seconds later, they were dead.

Researchers find echoes of this story in other contexts all the time — circumstances where adding safety-enhancements to systems actually makes crisis situations more dangerous, not less so. The reasons are rooted partly in the pernicious nature of complexity, and partly in the way that human beings psychologically respond to risk.

We rightfully add safety systems to things like planes and oil rigs, and hedge the bets of major banks, in an effort to encourage them to run safely yet ever-more efficiently. Each of these safety features, however, also increases the complexity of the whole. Add enough of them, and soon these otherwise beneficial features become potential sources of risk themselves, as the number of possible interactions — both anticipated and unanticipated — between various components becomes incomprehensibly large.

This, in turn, amplifies uncertainty when things go wrong, making crises harder to correct: Is that flashing alert signaling a genuine emergency? Is it a false alarm? Or is it the result of some complex interaction nobody has ever seen before? Imagine facing a dozen such alerts simultaneously, and having to decide what’s true and false about all of them at the same time. Imagine further that, if you choose incorrectly, you will push the system into an unrecoverable catastrophe. Now, give yourself just a few seconds to make the right choice. How much should you be blamed if you make the wrong one?

CalTech system scientist John Doyle has coined a term for such systems: he calls them Robust-Yet-Fragile — and one of their hallmark features is that they are good at dealing with anticipated threats, but terrible at dealing with unanticipated ones. As the complexity of these systems grow, both the sources and severity of possible disruptions increases, even as the size required for potential ‘triggering events’ decreases — it can take only a tiny event, at the wrong place or at the wrong time, to spark a calamity.

Variations of such “complexity risk” contributed to JP Morgan’s recent multibillion-dollar hedging fiasco, as well as to the challenge of rebooting the US economy in the wake of the 2008 financial crisis. (Some of the derivatives contracts that banks had previously signed with each other were up to a billion pages long, rendering them incomprehensible. Untangling the resulting counterparty risk — determining who was on the hook to whom — was rendered all but impossible. This in turn made hoarding money, not lending it, the sanest thing for the banks to do after the crash.)

Complexity is a clear and present danger to both firms and the global financial system: it makes both much harder to manage, govern, audit, regulate and support effectively in times of crisis. Without taming complexity, greater transparency and fuller disclosures don’t necessarily help, and might actually hurt: making lots of raw data available just makes a bigger pile of hay in which to try and find the needle.

Unfortunately, human beings’ psychological responses to risk often makes the situation worse, through twin phenomena called risk compensation and risk homeostasis. Counter-intuitively, as we add safety features to a system, people will often change their behavior to act in a riskier way, betting (often subconsciously) that the system will be able to save them. People wearing seatbelts in cars with airbags and antilock brakes drive faster than those who don’t, because they feel more protected — all while eating and texting and God-knows-what-else. And we don’t just adjust perceptions of our own safety, but of others’ as well: for example, motorists have been found topass more closely to bicyclists wearing helmets than those that don’t, betting (incorrectly) that helmets make cyclists safer than they actually do.

A related concept, risk homeostasis, suggests that, much like a thermostat, we each have an internal, preferred level of risk tolerance — if one path for expressing one’s innate appetite for risk is blocked, we will find another. In skydiving, this phenomenon gave rise, famously, to Booth’s Rule #2, which states that “The safer skydiving gear becomes, the more chances skydivers will take, in order to keep the fatality rate constant.”

Organizations also have a measure of risk homeostasis, expressed through their culture.
People who are naturally more risk-averse or more risk tolerant than the culture of their organizations find themselves pressured, often covertly, to “get in line” or “get packing.”
This was well in evidence at BP, for example, long before their devastating spill in the Gulf — the company actually had a major accident somewhere in the world roughly every other year for a decade prior to the Deep Water Horizon catastrophe. During that period, fines and admonitions from governments came to be seen by BP’s executive management as the cost of growth in the high-stakes world of energy extraction — and this acceptance sent a powerful signal through the rank-and-file. According to former employees at the company, BP’s lower-level managers would instead focus excessively on things like the dangers of not having a lid on a cup of coffee, rather than the risk and expense of capping a well with inferior material.

Combine complex, Robust-Yet-Fragile systems, risk-compensating human psyches, and risk-homeostatic organizational cultures, and you inevitably get catastrophes of all kinds: meltdowns, economic crises, and the like. That observation is driving increasing interest in the new field of resilience — how to build systems that can better accommodate disruptions when they inevitably occur. And, just as vulnerabilities originate in the interplay of complexity, psychology and organizational culture, keys to greater resilience reside there as well.

Consider the problem of complexity and financial regulation. The elements of Dodd-Frank that have been written so far have drawn scorn in some quarters for doing little about the problem of too-big-to-fail banks; but they’ve done even less about the more serious problem of too-complex-to-manage institutions, not to mention the complexity of the system as a whole.

Banks’ advocates are quick to point out that many of the new regulations are contradictory, confusing and actually make things worse, and they have a point: adding too-complex regulation on top of a too-complex financial system could put us all, in the next crisis, in the cockpit of a doomed plane.

But there is an obvious, grand bargain to be explored here: to encourage the reduction in the complexity of both firms and the financial system as a whole, in exchange for reducing the number and complexity of regulations with which the banks have to comply. In other words, a more vanilla, but less over-regulated system, which would be more in line with its original purpose. Such a system would be easier to police and tougher to game.

Efforts at simplification also have to deal urgently with the problem of dense overconnection — the growing, too-tight “coupling” between firms, and between international financial hubs and centers. In 2006, the Federal Reserve invited a group of researchers to study the connections between banks by analyzing data from the Fedwire system, which the banks use to back one another up. What they discovered was shocking: Just sixty-six banks — out of thousands — accounted for 75 percent of all the transfers. And twenty five of these were completely interconnected to one another, including a firm you may have heard of called Lehman Brothers.

Little has been done about this dense structural overconnection since the crash, and what’s true within the core of the financial sector is also true internationally. Over the past two decades, the links between financial hubs like London, New York and Hong Kong have grown at least sixfold. By reintroducing simplicity and modularity back into the system, a crisis somewhere doesn’t always have to become a crisis everywhere.

Yet, no matter the context, taking steps to tame complexity of a system are meaningless without also addressing incentives and culture, since people will inevitably drive a safer car more dangerously. To tackle this, organizations must learn to improve the “cognitive diversity” of their people and teams — getting people to think more broadly and diversely about the systems they inhabit. One of the pioneers in this effort is, counterintuitively, the U.S. Army.

Today’s armed forces confront circumstances of enormous ambiguity — theatres of operation with many different kinds of actors — NGOs, civilians, partners, media organizations, civilian leaders, refugees, and insurgents alike are mixed together, without a “front line.” In such an environment, the cultural nuances of every interaction matter, and the opportunities for misunderstanding signals is extremely high. In the face of such complexity, it can be powerfully tempting for tight-knit groups of soldiers to fall back on rote training, which can mean blowing things up and killing people. Making one kind of mistake might get you killed, making another might prolong a war.

To combat this, retired army colonel Greg Fontenot and his colleagues at Fort Leavenworth, Kansas, started the University of Foreign Military and Cultural Studies, more commonly known by its nickname, Red Team University. The school is the hub of an effort to train professional military “devil’s advocates” — field operatives who bring critical thinking to the battlefield and help commanding officers avoid the perils of overconfidence, strategic brittleness, and groupthink. The goal is to respectfully help leaders in complex situations unearth untested assumptions, consider alternative interpretations and “think like the other” without sapping unit cohesion or morale, and while retaining their values.

More than 300 of these professional skeptics have since graduated from the program, and have fanned out through the Army’s ranks. Their effects have been transformational — not only shaping a broad array of decisions and tactics, but also spreading a form of cultural change appropriate for both the institution and the complex times in which it now both fights and keeps the peace.

Structural simplification and cultural change efforts like these will never eliminate every surprise, of course, but undertaken together they just might ensure greater resilience — for everyone — in their aftermath.

Otherwise, like the pilots of Flight 447, we’re just flying blind.

Image Credit: closeup of Mark Lombardi “George W. Bush, Harken Energy and Jackson Stephens c.1979-90”