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Down the rabbit hole . . .

May 6, 2010

QuantumMechanicsFor the layperson, understanding the meaning of quantum physics and relativity is usually a significant challenge. And it mostly winds up being incomprehensible. I don’t pretend to understand the details and I know that the high level quantum concepts and relativity are often beyond my full understanding. So what does this have to do with business?

For me, reading in the area of quantum mechanics and relativity for the layperson, combining that information with that gained in reading on the evolution of consciousness and how the human brain works, makes it clear that there is no one way of viewing the world. Without exception, we see the world through the filters of our own experiences so what we view as “real” is not necessarily the same view shared by others. Quantum mechanics teaches me that often what we know or observe will change the outcome of the observation:

In quantum mechanics, the Heisenberg uncertainty principle states that certain pairs of physical properties, like position and momentum, cannot both be known to arbitrary precision. That is, the more precisely one property is known, the less precisely the other can be known.

To me, this simply means that I cannot overcome the effect of the observer on that being observed. The harder I work to “nail down” the so called truth with a capital “T,” the less likely I am to be open to seeing things from another point of view.

There’s a practical application of the Quantum Mechanics and an understanding of Einstein’s theories of relativity to our every day lives: the Global Positioning System. If we did not correct the GPS satellite information for the effects of special and general relativity, the system would be useless to us here on earth. On a more personal level, learning that the world isn’t necessarily as I perceive it and keeping in mind that I cannot escape the fact that I look at the world (including the “business world”) through my own filters makes me at least stop and question what I observe, believe and assume.

For most of us, the old Newtonian view of the world works quite well enough. We don’t need to take into effect quantum effects or relativity in order to function. Newtonian physics that I learned in school isn’t wrong, it’s just incomplete, it’s an approximation. If we want to venture past the normal every day life functions here on earth, or move down into the world of the atom (which we do on a regular basis – for example designing the semiconductor products that make the PC I’m using a practical tool), then someone has to take into account the more accurate view of the world.

I try to use all this as an analogy for business. As long as the market doesn’t change, or the competition doesn’t introduce some disruptive technology, I can use the “rules” I’ve developed to make decisions and strategize my next product or service innovations. At some point though, we may well have to step back, reevaluate the situation, apply some “advanced physics” and come up with new rules, policies and regulations. I think we’re living through such a time.

We misapplied a bunch of advanced math (creating CDOs), thought we new what we were doing, found out we didn’t, narrowly avoided a collapse of the man-made financial world and now must face a new understanding of “reality.” We can discuss the probabilities, statistics, derivatives and/or mathematical principles all we want; the practical results is that we created an unsustainable system. So we now must redesign that system. Wait, who’s “we?”

That would be you, the business leader. What’s wrong or incomplete about your business model? Is it possible, in light of the effects of the near financial collapse, for you to believe previous assumptions and approximations about your market realities are still true? Are your customers going to respond the same way to your products, services, brand and advertising? I’m pretty confident that things have changed significantly and that “old business models” are obsolete now. We have new information, new insights and new “realities.” So the question is – how will you adjust to the new math?

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