Chaos Theory And The Art Of Predicting Business Success

“When the present determines the future, but the approximate present does not approximately determine the future”

Time To Throw Causality In The Backyard

“The same causes will always produce the same effects” is a well known maxim. Numerous experiments and experiences have proven this in the physical world (albeit in a closed system). Causality (past behavior) can help us predict the future accurately. Ubiquitous usage of lag indicators in the business world is testimony to that. But, is this always true? We know that at the atomic level the causal laws don’t hold true. The behavior of the atom and electron at nuclear level can not be predicted. Is this only an atomic level anomaly? These anomalies once thought at atomic level are now being observed in multiple systems. Causality does not apply everywhere as previously believed. In fact close measurements reveal that there are anomalies everywhere. Even a simple swinging of pendulum movement has recorded anomalies.

It is now believed by “Chaoticians” that the world does not work as a clock. Nothing is predictable and ordered. The world we live in is alive, kicking and thriving because of chaos. Linearity, causality and predictability is an exception not the norm. Our world is complex, it thrives on freedom, chances and free will. Rules, boundaries and predictions are for ignorants. Are businesses an exception to this chaos, or is it time for businesses to stop predicting the future performance based on past data?

“There is no blueprint, only a set of laws with an inbuilt facility for making interesting things happen”

Create Self Similar Yet Unique Entities

We have learnt geometric structures and are familiar with spherical, conical and circular shapes. However, nothing that we observe in the physical world follows the geometric patterns. Clouds that we see are not spheres, mountains are not cones, coastlines are not circles, and a bark is not smooth, nor does the lightning travel in a straight line. Uniqueness is the order of the universe. Nature uses self constrained chances to create the complex and irregular forms in the real world. It creates self similar (Fractal) structures that are unique. It is fascinating to observe the interplay of chance and infinity that never creates two identical structures. Even similar looking trees or snowflakes are never identical.

In business world we adopt the best practices and use benchmarking exercises to identify growth opportunities. Successful people, process and technology interventions are assumed to drive next level of revenue growth. We can surely borrow the broader governing parameters but will have to leave room for development of new and unpredictable interconnections that thrive on chance. Can this new thinking help business entities self organize to create new symmetries for business evolution?

“There is lurking in this disorder a hidden order in the irregular shapes”

A Small Initial Variation, A Great Change In The System

Understanding of Chaos Theory opens up many possibilities. It gives us chance to analyze businesses as a fractal. If we accept that every business can be broken into regular fractals and If we are able to brake every process into regular fragments, will we start visualizing the hidden order? Will we start seeing the patterns that create self similar entities. Will it expand our understanding of butterfly effects in businesses. Will we be able to predict the variations needed to predict the success of business?

Geometry of Chaos is a dynamic calculation based on the iteration (calculation based on constant feedback) of complex numbers with zero as the starting point. This post is a starting point that will evolve based on iterations and feedback I receive.