Thursday, January 20, 2011

Tunisia's Butterfly Effect

By Dr. Suhaib Riaz.

A curious social phenomenon unfolded in Tunisia over the past few weeks. A country that was hardly in the news for political instability, suddenly saw a mass street revolution resulting in the ouster of its political elite. From a social science perspective, there are two things worth nothing here. The first is the obvious lack of predictability. The second is the sequence of events – which are now well documented: It all started with one unemployed street hawker’s frustration, which first caught the attention of a few other individuals and relatives, and soon spun out of control into the capital and across the nation.

If ever there was a demonstration of the “butterfly effect”, this certainly is one. Crudely put, the argument goes that a butterfly fluttering its wings in one part of the world can ultimately set off a storm in another part. It sounds incredible, until one encounters the results of Ed Lorenz, who accidentally discovered the phenomenon. A very minor decimal place error that crept in due to his use of a printout to input values into a very basic computer simulation of the earth’s weather, resulted in massive irregularities over time. Just as the Tunisian revolution, the sequence of events seemed to have an extreme sensitivity to initial conditions – one decimal place rounding-off, or one individual set off the sequence. Others might have ignored the error, but Lorenz saw in the resulting irregularities the possibilities of a new science. As James Gleick puts it: where chaos begins, classical science stops.

What are the implications for strategy research? We are forever caught in a business world where irregularities, and therefore lack of predictability, are the nature of the phenomena. Who could have possibly predicted where two college kids tinkering with computer code as a hobby would take the world (Microsoft); or how a dropout would see amazing success, get fired, come back and take the company on another round of success (Apple) – or for that matter who can predict what his sick leave announced this week will lead to? The examples in the online world – Facebook, Youtube, etc. are even more astounding. Yet, irregularities and outliers are systematically ignored in most mainstream research. We seem to be in a strange dilemma: What is predictable is not interesting; what is interesting is not predictable - and hence not useful. Could the “new” science of chaos have something to add to our knowledge in the strategic management world - where products, leaders, firms, industries etc. all seem to emerge in highly irregular patterns with little predictability in the sense of classical statistics. There are the odd works that touch upon this, but the area is waiting for more.

Which brings us back to Tunisia's Butterfly Effect. Now that it has happened, can we say something about other similar contexts? Already, there have been attempts to emulate the Tunisian example and set off a similar effect in other countries in the region, yet it hasn’t had the same impact. But then, if it could be easily replicable (predictable), it wouldn’t be as interesting, would it?

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