Welcome back! We’ve only got a couple more instalments in the Disruption Series to go, and this one builds on last week’s theme about the specific cause of disruption being less important than the act of being disrupted. Last week we identified a few different “Black Swans” that were waiting in the wings - AI, Volcanoes, Solar Activity - that are beyond our individual control but could prove to be massively disruptive with minimal notice. Indeed, our highly complex systems and society mean that we are hyper-vulnerable to these incidents, which have happened regularly throughout history. Now, the impact would be global due to the interconnectedness of our systems.
This week’s story goes into greater detail about how disruption triggers a cycle in individuals that makes future disruption more likely, and it will articulate that using a tale of Poker, game theory, and how macro events shape micro decisions.
It was Christmas of 2007-ish. I was a young college student, and my family decided that rather than pay stupid money for my sister and I to fly home for the holidays, it was cheaper and easier for us all to fly somewhere more accessible - so we chose Las Vegas. I’ve never been one for slot machines, but I do love a game of poker. Poker relies on a combination of paying attention to the cards, knowing probabilities, and knowing (or trying to know) the future actions of others at the table. In Poker, the players are competing against each other (not the Casino) and making good predictions about what a person is likely do to - call, fold, or raise - is a huge part of winning the game.
This idea - predicting the actions of others - is the foundation for a whole branch of mathematics called “Game Theory”. In essence, this is about analyzing people making interdependent decisions, and how that interdependence causes individuals to act and react to the decisions of others. At its core, game theory relies on certain assumptions. First, it assumes that those involved in the game - the decision makers - are rational actors who make rational decisions. The challenge with this assumption is that individuals often make irrational decisions. Let’s give you an example from my Christmas Eve poker game on that family trip to Vegas.
I was having fun, but I was not doing well in the cards. I had set myself a budget of $200 for gambling, and had gone up to $400 over the week, but had slowly watched my chip stack go back below $200 in just this one evening. The drinks were flowing and I ended up having a great conversation with the gentleman sitting next to me that ranged from politics to philosophy to love and everything in between. He was from Argentina, and ran his own successful export business, and like me he was in Vegas for Christmas with his family. We were separated by at least 30 years in age, but we had quite a few laughs and got along well. Finally a hand came up where my cards were OK - not a sure thing, but a pair of kings is decent enough that I was going to play. Everyone else at the table had mucked their cards, but before the dealer turned over the first three community cards (the “flop” for poker fans) the action came to me. I called to see the flop, and the dealer turned it over.
Ace, Ace, King.
I now had 3 of a kind of a reasonably high card, but I knew if my new Argentinian friend was holding a single Ace, I’d lose. The action came to him first, and he confidently pushed all-in which suggested he likely did have an ace in his hand. I couldn’t come close to matching his stack of chips, but I knew I would have to put every penny of my remaining $180-ish dollars into the pot to keep playing. What I should have done as a rational actor is recognize that the odds were not in my favour at this point, and folded. I didn’t believe he was bluffing and so I should have waited for a better deal, and I should have folded - that’s what a rational actor would have done.
But I wasn’t a rational actor, I was a less-than-sober 21 year old having a great time playing poker in Las Vegas.
So, I said “call” and pushed my stack forward with a smile. My Argentinian friend laughed and said “Are you sure? You’ve not had very good luck with the cards tonight”. I don’t remember my exact response, but it was something like “That’s true, but I’m lucky in a lot of ways - I’m here with my family and we’ve had a great holiday, and I’ve met some great folks, and I have lots of friends - I’ll take bad luck in cards for good luck in those other things any day of the week”.
The Dealer was turning the next card over while we had this exchange, and the action had once again turned to my Argentianian friend as soon as I finished speaking. His eyes flashed along with his smile, and he said “That’s a very good perspective”. I’ll never forget the wink he gave me when he showed me his cards - two aces - and then said loudly to the table “That turn card caught me out. I fold” as he mucked his cards with the dealer.The thing is, his two aces were the clear winner with 4 of a kind. The turn card made no difference to his win at all - there was no way for me to beat him, but by him folding he essentially gifted me back all the money I had lost.
The Argentinian wasn’t a rational actor either.
Game Theory is incredibly powerful when we’re trying to analyze what the possible outcomes of a given scenario might be. We use it for computer science and international relations and so much more - it’s a profoundly useful tool. In the poker game I described above, Game Theory would assume that every player at the table was playing to win - which is a perfectly reasonable assumption to make. Except that at least 2 of the 10 players at that table were not playing with winning in mind. I was playing for fun within my budget, and clearly my Argentinian friend didn’t care about winning. Anyone using game theory to analyze that game would have confidently made predictions that would have been dead wrong - because their assumptions about the characters playing the game were wrong.
This is how all this relates to disruption: The players playing the game in our society are changing. The majority of the adult population has grown up in a world where a climate catastrophe has been on the horizon for our entire lives, and we’ve seen multiple governments from multiple parties fail miserably to meaningfully address this while simultaneously continuing to subsidize fossil fuel companies. We’ve lived through multiple “once in a generation” weather events, economic crises, pandemics, and wars, to the point where we all regularly joke about what the next “once in a generation” thing is going to be. And the lifelong impact of the regularity of these things is fundamentally changing how individuals act - which is changing the assumptions needed for effective game theory.
For example, the 2008 banking collapse was obviously impactful; some studies suggest it resulted in an increase in suicides of between 4.2% and 6.4% in Western nations [1]. People lost homes, retirement accounts, and livelihoods - and we saw billions of dollars of taxpayer money used to bail out the banks that came with zero consequences for those responsible for the crash (at least, in North America). As an example of how players in the game are changing, when the exact same thing happened in 2023, nobody really cared. The second, third, and fourth largest bank collapses in US history are not from the 1930s or from 2008’s Great Recession - it’s from 2023. Did you know about it before reading this blog? Bankers once again played fast and loose by making irresponsible bets with your money, and when those bets went bad, the US Government stepped in and printed more money to bail them out. And instead of Occupy Wall Street 2.0, the majority of individuals…simply shrugged and moved on.
Remember, I said the assumptions Game Theory makes about the players will have to change as the players change - I didn’t say players were changing in a good way.
Trust in government is incredibly low right now, as are economic prospects for the current generation. A recently publicized RCMP report identified Canadians under 35 as never being able to own homes and that in general, things are going to get a lot worse before they get better due to the polycrisis of disruptive forces on our horizon[2]. This is not the assumption that our parents or grandparents generation grew up with; there were certainly great difficulties and challenges during their time too, like the ever-present threat of nuclear war, but generally they grew up in a world where things were expected to steadily get better and for the most part, they did.
But for the first time in a hundred years, things are expected to get worse or already are getting worse (life expectancy, income inequality, quality of life, and environmental quality are all great examples of this pointed to in the RCMP report).
(Also that nuclear war thing is still an issue...)
This creates a situation where individuals start changing behaviour. When our assumptions about the future change, so too do our decisions - what is ‘rational’ for a bleak future isn’t necessarily what is ‘rational’ for a shiny one. The core point of this entry is that our individual lives - the microworlds we inhabit with our relationships and challenges and individual experiences - are all unique, but in aggregate they do form patterns. Those patterns have been shifting with the current generation, and these micro-patterns cause macro changes.
And this is why your leadership in your context matters: Leaders are never just decision makers - they are also beacons of hope for others. If my boss or mentor can make good decisions that aligns with their values, then maybe the right candidate running for office can do that too. But if my boss or mentor has thrown in the towel and is only looking out for themselves because of the bleak future ahead…well, hope dies in that environment. As leaders, you have agency to guide the micro, which has a profound impact on the macro. Let’s spell this out as a simplified example:
Option 1: A candidate is elected. They prove to be unethical and make decisions that do not align with their stated values. As an individual, I have lost trust in that candidates; it’s been a problem for so long that many of my peers are losing trust in the entire system because they’ve consistently failed to adapt to big changes and disruptions and I’m feeling pretty uneasy with the state of the world. I see leaders at the top making decisions that seem to serve the few instead of the many. Then at work, our own bosses are doing the same thing - that’s just what leadership is, I guess. Those with privilege look after themselves - once they’ve got theirs, they pull the ladder up behind them. It’s like that at every level of leadership I’m not even going to bother voting in the next election.
I’ll just do what I can to make sure my family is looked after while all this crumbles down.
Option 2: A candidate is elected. They prove to be unethical and make decisions that to not align with their stated values. As an individual, we lose trust in those candidates; it’s been a problem for so long that many are losing trust in the entire stream. But at work, my boss shows me what real leadership can look like. My boss is pretty clear on where they stand, values-wise, and they stick with those values even when it’s hard. And sometimes, situations are awful and they can’t stick with those values - in those situations, they don’t pull the Politician double-speak; they tell the truth and explain the situation. That’s what leadership is - it’s not what I’m seeing in government, it’s what I see at work.
I guess I should find a candidate who operates like my boss does.
These scenarios are obviously simplified, but what matters is the proportion of the population that are feeling some version of the above. If only a small portion of a group believes perspective 1, then that’s probably fine. But if a critical mass of people start believing perspective 1 over perspective 2, we’ve got a problem - that means that many individuals will start making different decisions (in this case not voting out of disillusionment and focusing on themselves only) and that has a major impact at the macro level.
This isn’t just a thought experiment. In 2016, 55% of Americans voted in the Presidential Election. Of those who did not vote, 25% said they chose not to because they didn’t like the candidates or they were so disillusioned that they felt their vote would not make a difference. These are individuals who changed their behaviour on the micro level and chose not to vote - ignoring entirely that many more disillusioned people voted for the "Draining of the Swamp" tagline even if other aspects of that candidate's platform were clearly against their own best interests. Most analysts - including Game Theorists - seemed to believe that Hillary Clinton’s victory was assured. But enough individuals made a different decision - because they were disillusioned - to throw those predictions out the window. Since that time, Roe v Wade has been overturned, millions of Americans believe their election process is rigged or fundamentally unfair, and there was a day where a mob of people literally stormed the capitol building in what many are calling an insurrection. The players changed and the game got crazy in 2016 - and the ripple effects of the 2016 election have still not been fully seen, with a rematch of 2020 coming this November. When America sneezes, the world catches a cold, and right now it appears to be outside, on a cold day, in wet clothes, and no jacket.
Disruption is inevitable, and it’s a vicious cycle of a beast eating its own tail - disruption happens, and causes people to change their individual behaviours. Individual behavioural changes reach a critical mass where more disruption happens. The cycle repeats.
But we can break the cycle with your leadership - by being a transformation-focused leader, you’re constantly disrupting on purpose. By doing that with your core values front and centre in your decisions, and clearly communicated to others, you become a transformative leader that people trust and rely on. When people can trust and rely on a transformative leader, they can handle almost any disruption that gets thrown their way - hope serves as the lifeboat in the tumultuous sea, and they survive the storm to sail another day.
And maybe - just maybe - if enough leaders give enough people hope, one or two of those hopeful folks will run for office and give us some better options.
[1] Chang, Sue-Shen, David Stuckler, Paul Yip, and David Gunnell, “Impact of 2008 global economic crisis on suicide”, British Medical Journal, 2013.
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