There’s a passage in Ernest Hemingway’s novel The Sun Also Rises in which a character named Mike is asked how he went bankrupt. “Two ways,” he answers. “Gradually, then suddenly.”
Leadership in Times of Rapid and Uncertain Change
How do you feel about your work and what the future looks like?
On a scale of 1-10 where 1 is “Uncertain as f**K, and 10 is "rock solid, bring it on”, where do you score?
If I asked those you work with, what would their range of answers be?
We all respond differently to change, and each person will need a different set of strategies.
In your team, there will be a range of answers and the support that each person needs to be able to contribute to your goals will be different.
In this article, I want to explore a concept that is hiding in plain sight.
A concept that is highly relevant to what the future looks like.
Together, we’ll explore some areas where this is happening right now - areas that affect everyone.
We'll look at a range of human reactions.
And then share some experiments for you to try.
Up for it?
Let’s dive in.
The concept I want to explore is Exponential Change.
What is Exponential Change
Let’s start with an example.
Solar Energy (Source: The Economist)
In 2024, solar energy will provide the world with c6% of it’s energy.
It’s only just getting started though.
Installed solar capacity doubles roughly every three years so will grow 10-fold each decade.
This rate of growth means that solar will likely be the single biggest source of electrical power on the planet by the mid-2030’s.
There are lots of ramifications of this for energy (cheaper abundant energy and reduced dependence on hydrocarbons being two big ones).
The point is the nature of exponential change. That incredibly rapid speed of change.
It’s hard for us as humans to get our heads around what this means.
And that is a key factor in feeling certain/ uncertain about what comes next.
I think to feel differently, we need to think differently.
The world we live in has exponential change happening in a wide range of fields; I think it’s essential that we need to learn to think differently.
Why don’t we think this way?
Our human brains don’t naturally think exponentially.
Here are some reasons that shine a light on this:
Linear Thinking Bias
Humans naturally think in linear terms. This makes it difficult to grasp the rapid acceleration of exponential growth, where changes start small but quickly become massive.
Limited Experience
Exponential changes up until now have been rare in everyday life. As a rule. we lack the practical experience needed to intuitively understand such dynamics.
Delayed Perception:
Exponential changes often start slowly and only become noticeable after reaching a critical threshold, leading to underestimation of their long-term impact.
Cognitive Overload:
The human brain struggles to process and predict the future consequences of exponential growth, which can involve complex and far-reaching implications.
Cultural and Educational Gaps:
Traditional education and cultural narratives often emphasise linear progress, leaving individuals unprepared to recognise and respond to exponential trends effectively.
The net result:
If we want to succeed, we each need to spend time embracing the importance of exponential change. It’s getting our minds in a state ready for the future.
More Examples Please
Where else is exponential change happening:
AI is an obvious place.
Listen to former CEO of Google, Eric Schmidt talking about how we are underhyping rather than overhyping AI.
It’s big and it’s already here.
And set to grow exponentially.
Genomic Sequencing is another big one.
The cost of sequencing a human genome has decreased exponentially, from $100 million in 2001 to less than $1,000 today.
Exponential improvements in genomic sequencing are revolutionising healthcare by enabling early detection of diseases, tailored treatments, and advances in gene therapy. It’s not without issues (like any exponential change) - in this case ethical and privacy concerns regarding genetic data use.
Solar Energy we’ve covered.
Climate Change
Climate change is often perceived as linear, with people expecting gradual changes in temperature and sea levels.
However, many climate processes involve feedback loops and tipping points, leading to exponential or abrupt changes.
This misunderstanding has resulted in insufficient urgency in addressing climate change, with many failing to appreciate the potential for rapid and severe environmental impacts.
There are plenty more and some great writers on the subject such as Azeem Azhar. Link
What to do?
The opener for this article was “Do you feel uncertain about the future”
I believe that that knowledge dispels fear.
When we explore and become more familiar with the way the world is changing, it can become less daunting.
I have 3 experiments for you to play with to explore the idea of Exponential Change.
As always, an easy one, a medium one, and a harder one.
Do these yourself. Please do share them with others.
The Easy One - Doubling Paper Folding
Find a sheet of A4 paper.
Take the sheet of paper and fold it in half.
Continue folding the paper in half as many times as possible.
Note that with each fold, the thickness of the paper doubles.
After a few folds, you’ll find it increasingly difficult to fold the paper.
Count the number of folds and try to estimate the thickness after each fold. The thickness grows exponentially with each fold, doubling every time.
The point of this visual experiment is that it demonstrates exponential growth as the thickness of the paper increases rapidly with each fold, highlighting how exponential processes can quickly lead to large numbers.
The Medium One - Compound Interest
Open a new spreadsheet and set up columns for time (in months), principal amount, interest rate, and accumulated amount.
Start with an initial principal amount (e.g. £1000).
Choose a monthly interest rate (e.g., 1%).
In the first row, enter the initial principal amount and the interest rate.
In subsequent rows, calculate the accumulated amount using the formula:
Accumulated Amount = Principal × (1 + Interest Rate) to the power of n.
Where n is the number of months.
Extend the formula for several years (e.g., 10-20 years).
What you will observe is the growth initially is slow.
Over time, as interest is compounded, the accumulated amount grows exponentially.
The point is that small, consistent increases leads to significant growth over time.
The Longer One - Watch + Learn
If you want to dive deeper, reads this 5 page article and listen to this 15 minute McKinsey interview with Azeem Azhar.
Closing Thoughts
How we feel shapes the way we approach the world.
It matters and when we feel uncertain, a good strategy is to find the knowledge.
One crucial area to better understand is the role of exponential change.
We’ve covered why our human brains don’t naturally think this way.
That means we have a little work to do to embrace this principle.
Play with the three experiments.
Have a conversation with someone else around how this could affect what you are working on, and explore ideas around how you could think differently to embrace change.
This is what The Big Bold Mindset® is all about. You can’t navigate a new world using an old set of charts. We want to help you with the ideas and the conversations that create the small human conversations that can change your world.
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