Andrew Zolli

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”

On November 16, 2002, physicians at the First People’s Hospital, in the Shunde district of Foshan City, in the southern province of Guandong, China, reported an unusual case of severe pneumonia. A few days previously, a local farmer had been admitted the hospital complaining of a high fever and a dry cough, and had died soon after. Though no one knew it at the time, this was the first reported case of the first major new disease of the 21^st century: SARS.

A month later, the second case was reported about 200 km away, in the city of Heyuan, also in Guandong, and in the following three months, more than 300 cases were reported across the province, many of them lethal. Amazingly, long before the outbreak had spread even this far – and months before it became an issue of worldwide public concern – an organization on the other side of the planet was already sensing the danger. Canada’s Global Public Health Intelligence Network, or GPHIN, had been set up just a few years before the outbreak as an electronic global health observatory, monitoring the Internet and other global electronic media for signs of potential disease outbreaks or other health crises around the planet. Twenty-four hours a day, seven days a week, GPHIN’s software scans tens of thousands of digital sources in eight languages for the first hints of trouble.

On the 27^th of November – just 11 days after the first reported case – GPHIN picked up reports of a “flu outbreak” in China and sent them on to an equally remarkable organization called GOARN, the Global Outbreak and Alert Response Network. GOARN is a global network of more than 120 public health surveillance and response organizations operated by the World Health Organization. Each year, it identifies and coordinates responses to more than 50 public health outbreaks around the world – but SARS was the first new outbreak GOARN had to contend with which started spreading rapidly and internationally. In many ways, SARS shared features of both the pathogen that killed Jamaica’s urchins, and the contagion of uncertainty that spread through the financial network: it was fast, lethal, easily transmissible and on the move.

During the global SARS containment effort, GOARN proved invaluable, linking together some of the world’s best virologists, epidemiologists and other public health experts in a worldwide collaborative network that shared what was being learned about what caused SARS, how it was transmitted, and where it was likely to go next, all in real-time.  This in turn enabled the World Health Organization to offer specific, up-to-date, scientifically informed guidance to governments and to the public directly about how to best prevent the spread of the illness as it was unfolding.

Nowhere were these communications better implemented than in Singapore. SARS had arrived there in February 2003, carried by a 26-year-old woman returning from a vacation with several friends in Hong Kong. There, she had a chance encounter in the elevator of the Metropole Hotel with an infected physician, a respitory specialist from southern China who was there to attend a wedding. The doctor (who became too sick to attend) acted as a ‘super spreader’, passing the illness not only on to her, but also to seven other international guests who were staying on the same floor of the hotel – perhaps by something as innocuous as leaving trace amounts of the virus on an elevator button. It was a crucial, silent and disastrous moment in spread of the disease, as two of these fellow hotel guests later carried the virus back to their home countries of Vietnam and Canada, initiating its spread there, while the young woman, unwittingly, brought it back to Singapore.

Between arriving back home and being admitted to the hospital on March 1^st, 2003, the young woman infected at least 20 others over a period of several days. Then, once in the hospital, she infected one of her doctors, nine nurses, and nine of the approximately 30 family members and friends who visited her – all before her SARS was diagnosed.  The disease subsequently spread to four other healthcare institutions and a vegetable wholesale center. Starting with this first case, during the period between March and May 2003, 238 probable SARS cases and 33 deaths were reported across Singapore. As the virus spread, so did public panic.

Singapore’s response to the emerging threat was an all-out, national effort, intended to be as comprehensive and as swift as the disease itself. Once it was clear that the infection was capable of spreading rapidly in hospitals, a single medical facility, Tan Tock Seng Hospital, was designated as an isolation hospital for SARS patients. All departing and arriving passengers at Singapore’s airports and seaports were given temperature checks to detect possible cases. Taxi and bus drivers were similarly checked, and public transport operators displayed stickers to indicate that the drivers had been checked and were not infected. All schools in the country were closed for ten days. Home quarantine was established for more than 6000 people known to have come into close contact with a SARS infected person; quarantined citizens had webcams set up in their homes and were called randomly during the day to ensure their compliance with the measure. The employment law was amended to ensure that quarantined citizens were compensated, alleviating economic pressures on those forced to stay at home; when a new case was discovered, a team of 100 trained “tracers” tracked down every person that the infected person might have come in contact with, from family members and neighbors to business colleagues and even local vendors on their commute to work, and placed in quarantine as well.

Singapore’s all-out response to contain the disease drew widespread praise from institutions from the World Health Organization to the World Bank, but international press coverage also suggested that the country’s success was due, at least in part, to its government’s ability to clamp down repressively on its citizens. Time Magazine’s reporting was characteristic, noting that Singapore “ruthlessly nipped its SARS problem in the bud with draconian quarantine measures.”

Yet the truth, according to according to Dr. Peter Sandman and Dr. Jody Lanard, crisis communications experts who closely followed Singapore’s response, was just the opposite. Singapore’s successful response to SARS rested not on repression, but on its near pitch-perfect use of public communications throughout the unfolding emergency.

In a crisis, the first challenge is to establish trust, and that means not sugar-coating the truth. “The most important risk communication recommendation during an evolving crisis is to avoid over-reassurance – in fact, to err on the alarming side rather than risk falling into over-reassurance,” writes Lanard. “This may well raise public anxiety in the short term, but it reassures the public in the long term that leaders are going to be honest with them. Paradoxically, over-reassuring statements tend to generate distrust – especially when the statements turn out wrong.”

As SARS panic spread across the country, Singapore’s prime minister at the time, Goh Chok Tong, said publicly that SARS could possibly become the worst crisis Singapore had faced since independence. When asked by a journalist if he was being alarmist, Goh responded: “Well, I think I’m being realistic because we do not quite know how this will develop. This is a global problem and we are at the early stage of the disease. If it becomes a pandemic, then that’s going to be a big problem for us … At the moment, I’d rather be proactive and be a little overreacting so that we get people who are to quarantine themselves to stay at home. The whole idea is to prevent the spread of the infection.”

According to Lanard, “Prime Minister Goh was illustrating an important outbreak communication principle, which is well-supported by the social science literature: Don’t aim for zero fear.” In a public health crisis, some fear is appropriate. And as long as it’s appropriately controlled, it helps. After the epidemic subsided, data suggests that Singaporean citizens who were more anxious took more recommended SARS precautions than those who were less so.

The Singaporean government also told its citizens what to expect – that this was an unprecedented situation, and that things would not return to normal for quite some time. This, according to Lanard, allowed people to emotionally rehearse for a wide variety of possibilities and get used to what might happen.

Just as importantly, when difficult choices confronted the government, Goh and his cabinet held public meetings to involve the public in key decisions. Lanard points to one example involving the most difficult part of the response: the quarantine. “People got angry about quarantine violators, particularly a man who went to a local bar waving his quarantine order in the air, and bragging that he was supposed to be at home. The Prime Minister and other officials held public meetings where they posed the dilemma of posting the names of those under quarantine order, rather than keep them confidential on medical grounds. After much discussion, they would ask for a show of hands, pro and con regarding revealing the names. The newspaper ran opinion polls on the issue. The public usually stated that they wanted other people’s names published – but not their own, if they were quarantined! Ultimately, the names were not posted. And all during this period, volunteers were taking food to the quarantined families, providing them with cell phones – and making sure they were home.”

Such responses demonstrated the government’s respect for the public’s feelings, and made them stakeholders in critical choices, building deep trust between citizens and the public health authorities. Post-outbreak surveys suggested that Singaporeans’ belief that they could communicate openly with their government was one of the most important contributing factors in their compliance with SARS precautions.

Consider how very differently a crisis like the global financial meltdown of 2008 might have turned out if financial ‘listening posts’, like GPHIN, had been established to scan constantly for the earliest signs of potential imbalance; and if they were jointed to a coordinated network of globally empowered regulators, like GOARN, which could suggest and coordinate appropriate interventions. Political leaders, empowered with much better data about what was happening, would have at least the opportunity – if not necessarily the skill or motivation – to communicate with the efficacy of Singapore’s leaders, and to bolster the resource which was the crisis’ first casualty: trust.

After many months of planning, PopTech has arrived in Iceland. One of the most common questions I get is why we’re here, so let me offer a few thoughts.

Iceland is a truly remarkable place, both geographically and culturally. To begin with, it’s a physically gorgeous country, filled with waterfalls, glaciers, shimmering northern lights and (occasionally to everyone’s chagrin) volcanic eruptions. The landscape is stark, ethereal, and, often, of recent geological vintage. It’s a place where one can feel humanity perched modestly amid forces much more powerful than itself; after sitting quietly alone in front of the iconic, turbo-charged Gullfoss waterfall for a few hours, if someone had said to me, this waterfall is alive – it’s inhabited by an ancient spirit – I wouldn’t have quite believed them, but I would certainly have known where they were coming from.

And it’s not just the waterfalls. Iceland actually sits atop the meeting point of the North American and European tectonic plates, and the ground itself feels energized and potent. Indeed, the country produces such vast sums of renewable geothermal energy that, if they could, the aluminum smelting industry would happily ship every ounce of Bauxite on Earth here to be turned into soda cans and Boeing airplanes.

Icelanders have other ideas for what to do with all of that subterranean heat, from running year-round, locavore greenhouse farms, to ambitious plans for Internet data warehouses, powered by geothermal energy from below, and cooled by Icelandic breezes from above. (With the right data-protection policies in place, this could turn Iceland into a kind of “Switzerland for Data”.) Other efforts are less grand, but no less visionary: a few years ago, in a small inlet in Reykjavik, some enterprising residents ran some steam tunnels out under the North Atlantic, raising the temperature of the seawater to bathtub levels. Then they imported a bit of beach sand, and voila! – a Caribbean beach, within spitting distance of the Arctic Circle.

Iceland is demographically tiny, with 320,000 residents, almost half of which live in the capital city Reykjavik. The culture is both ancient (this is, after all, the site of the first Parliament ever, in 930AD) and, until relatively recently, so genetically isolated that it has become an important center for population genetics research. Yet, Iceland has, at the same time, been an amazing contributor to global culture – particularly through its extraordinarily rich musical scene, which is now a major export industry. And the music industry’s success is bringing all of the other, more nascent creative industries – art, graphic design, architecture, and craft – to new global audiences.

All of the above would make for a wonderful, fully justified rationale for a visit to Iceland. And really, you should come here. Yet that’s not really why we’re here.  Our reasons are at once darker, and more optimistic.

As most people know, Iceland was one of the epicenters of the global financial crisis in 2008. Adjusted for the small size of the country, it was the largest banking collapse in history.

The reasons were prosaic enough, beginning with a 2001 decision by Icelandic authorities to aggressively deregulate the country’s banks. These institutions, run by a group of “Icelandic Oligarchs” promptly went on a buying and borrowing spree, acquiring debt and companies at a furious rate. An economy that once measured its health by the size of the herring catch was now taking a major stakes in companies like AMR, the parent company of American Airlines. The economy quickly overheated, with bank holdings inflating to many times the size of Iceland’s GDP.  Iceland’s currency inflated as well, and it attracted vast, disproportionate sums of foreign investment, and there was a big borrowing explosion at home, with Icelanders taking on debt roughly twice the size of their disposable income.

When the meltdown came in 2008, Iceland’s crisis was existential. GDP shrank overnight by 10%; unemployment grew sevenfold. Civil unrest broke out in otherwise placid Reykjavik. When I ask residents how they felt then, in late 2008, the words most often used are “terrified” and “enraged”. I nod, remembering how those same months felt in the U.S.

And yet, Iceland’s path after the crisis could not be more different than the one taken by the United States. In the several years since the crash, the country has criminally indicted its former Prime Minister, Geir Haarde, and is slowly undertaking the criminal prosecution of a number of major bankers. These efforts may not yield great insights, or huge numbers of convictions – one journalist told me that of the 200 criminally culpable, perhaps 20 will see jail time. But they do bring a sense of closure and national unity. Of central importance, Icelanders voted – twice – by popular referendum to let their private banks fail, and not to saddle the public with extraordinary, generations-lasting debt. And now, after some fits and starts, Icelanders have elected 25 citizens to rewrite the country’s constitution.

And what’s the result of all of these activities? The country recently had its debt upgraded to investment-grade status; it’s debt levels are lower than those of countries like Ireland, which, like the US, decided to prop-up its banks. Iceland’s rate of unemployment, while higher than precrash levels, is lower than that of the US. The IMF – which initially decried Iceland’s moves – has since celebrated the country as a model for crisis management. Other small nations are looking to Iceland as a potential model.

It’s essential to point out: not everything is perfect in Iceland – far from it. The story of Iceland’s response to the crisis is not fairy-tail perfect, it’s not linear, and it is not over. Personal household debt, for example, remains crippling – people still have a lot on the family credit card, so to speak. A lot of retirement savings was tied up in those failed banks – and with foreign investment limited, some in the business community fear there could be an inflationary asset bubble as the country is forced to invest its retirement savings locally. And people made more immediate mistakes: after the crisis, Icelanders voted out the existing political parties and voted in a new set of politicians, who have proven to be hugely unpopular. And the constitution, while containing some widely admired principles, has been criticized for having some components that are too complex – some fear it may not pass.

But even so, there are some critically important resilience lessons here, not just for the Iceland but also for the world.

First, the mass social actions that Iceland undertook in response to the crisis helped create outlets for social catharsis and bolstered a sense of commonweal. They helped people feel like they were in the same boat, and gave a sense of agency to the people. The constitutional rewrite process, for example, grew directly out of community organizing.

Second, Iceland’s abundant natural resources – fishing stocks and geothermal energy among them, not to mention the draw of Iceland’s beauty for international tourists – is a huge economic ‘prop’, no matter what else is happening in economy. Having a renewable, clean-energy economy has proven to be a huge resilience-booster for the country. Sometimes you can build the resilience of a fragile system – in this case, the economic one – by bolstering those around it. (As a side note – one feature of the new constitution is the nationalization of Iceland’s natural resources; since they will belong to the nation and not the state, they won’t be able to be sold off to foreign interests.)

Third, it’s important to say that, while Iceland may not be the model for how you deal with a crisis, it may, just as importantly, be another model. After the crisis hit, Iceland was under enormous pressure to undertake a US-like bailout of its banks and impose austerity. What happened since proved that, perhaps there isn’t a one-size-fits-all solution. Whether Iceland’s experience ‘scales up’, it suggests that the US model may not always ‘scale down’ – that states in different contexts may need different models. Diversity matters.

* * *

Next week, in the gorgeous Harpa Center, PopTech will be exploring patterns of resilience in both systems and people – two threads that will, like a helix, twist around one another. After the first day and a half of presentations and discussions, we will introduce the voices of a number of Icelanders – a leading educator, environmentalist, scientist, constitutionalist, musician, entrepreneur and search-and-rescue leader, to not only hear what they do, but to get their perspective on Iceland’s past, present and future.

It should be an amazing conversation. I can’t wait.

 

Main Image: ovarati on flickr

One thing I learned when working on Resilience with Ann Marie is that writing a nonfiction book is about much more than researching and engagingly presenting a body of ideas. It’s also about inviting a set of questions, themes and not-quite-complete lines of thought into your head, and letting them occupy it long after the writing is done.

One of those lines of thought, which is briefly touched upon in the book, is about the relationship between time and resilience, and the role of remembering and forgetting.

In individuals, organizations and systems, the memory of past disruption often plays a crucial part in keeping a system from crossing a critical threshold. Likewise, the forgetting – intentional or otherwise – of past disruptions often leads to collapse. This is one of the reasons that calamities are often “once in a generation” – it takes that long for the cultural memory of past disturbance to fade.

And when it does fade, paradoxically, the very success of the rules that kept the system safe is cited, invariable, to argue for their elimination. (“We don’t need those rules — there hasn’t been a banking collapse since the Great Depression…” or “We can allow for the destruction of those wetlands — our contemporary engineering practices are so good that they have made hurricanes less catastrophic.”) In a further paradox, it’s also why some of the most resilient places are also places that regularly experience failure – the awful regularity keeps the cultural memory of disruption alive.

But the relationship is not that simple. It’s also, sometimes, the forgetting of past practices that makes way for the new innovations; and holding too firmly to past ways can lead to a system’s annihilation. (“The past is what we know. It’s what we trust. It’s how we’ve always done things.”) And, importantly, past practices may have been exactly the ones that kept us safe in the past. Why should we let go of them now?

All of which is really another way of asking: how do we let the past speak? and how do we let the future speak? And what if, as is so often the case, they disagree?

I am thinking of these questions when reflecting on two contemporary stories from Japan, the first told by José Holguín-Veras, of a 1000 year-old shrine, built in the small village of Murohama on Miyatojima Island to warn future generations of the possible impact of a tsunami:

“A millennium ago, the residents of Murohama, knowing they were going to be inundated, had sought safety on the village’s closest hill. But they had entered into a deadly trap. A second wave, which had reached the interior of the island through an inlet, was speeding over the rice paddies from the opposite direction. The waves collided at the hill and killed those who had taken refuge there. To signify their grief and to advise future generations, the survivors erected a shrine.”

The shrine – built at the point of the high waters – persists until the present day. When the 2011 earthquake and tsunami hit, most of the people in Murohama heeded the story and headed to safer ground on the other side of town. It was this interweaving of cultural ritual and religious practice, symbolism and story, and most of all, deep remembering, that saved lives a millennium later.

* * *

Another story in Japan, also about human constructs that last for more than a thousand years, tells a different story. The world’s oldest company, Kongo Gumi, went bankrupt in 2007, after 1400 years of continuous business building temples. The company operated for more than 14 centuries – including having an astounding 40 generations of a single family lead the company. The last CEO, Masakazu Kongo, cited the company’s “flexibility in selecting leaders as a key factor in its longevity.” Specifically, “rather than always handing reins to the oldest son, Kongo Gumi chose the son who best exhibited the health, responsibility, and talent for the job. Furthermore, it wasn’t always a son. The 38th Kongo to lead the company was Masakazu’s grandmother.”

So how did a company started in the 6th century flame out in the 21st? The company had borrowed in the 1980s to invest in real estate, running up significant debt, and saw those assets shrink after the recession of the 1990’s. That hurt, but ultimately, the thing that brought the company down was not a financial change, but a cultural one: people simply stopped making contributions to temples. The prior borrowing and the company’s own deeply entrenched culture had limited the company’s adaptive capacity, so when this cultural change came, it was all but impossible for it to pivot.

There are several lessons here, but one is: there is an art to remembering, and an art to forgetting. Wisdom – and resilience – is know when to practice which.

Main Image: cobalt123 on flickr