Analogy of Climate and Business Climate

Analogy of Climate and Business Climate

Does understanding the climate around the globe help us in understanding the business climate? This is an important question because of the many simulations that have been made that would help us understand the business climate better and do dynamic strategies accordingly. This buzz tries to answer this question.

My first observation relates to Pareto Rule. Studies have shown that 20% of banks make 80% of the total profits of banks. I found also applies to the insurance sector. In works we find that 20% of employees do 80% of the total effort and productivity. By volume, dry air contains 78.09%Β nitrogen, 20.95%Β oxygen and the remaining percentages of small amounts of other gases. Oxygen is active (20%) and nitrogen is inactive (80%). Organizations have similar distribution of workers where only 20% of employees are active and same ratio for active and profitable customers. This is the first analogy.

The second analogy is turbulent times for businesses and for climate. Turbulence with all its negative impact on the markets. Turbulent climates may lead to the disruption of businesses as turbulent markets lead to the disruption of human lives and societies. Take for example the famine experienced in Africa because of drought for consecutive years. The turbulence of the climate extended its butterfly effect to cause disruption of peoples’ normal life.

We may still remember the volcanic ash cloud in Iceland in 1994. The cloud mads flying risky and for almost a week there were no flights in Europe. This resulted in billions of dollar losses because of the disruption of flights. Airlines lost. Hotels, touristic centers and restaurants lost. Huge losses were experienced in other sectors such as food staff that needed to be exported without delay. Hospitals lost because foreigners couldn’t seek treatments in European hospitals. The cascading effect of one event caused chaos in many distant parts of the world. Risk travels as fast as a fast wind. The greater the velocity is, the greater the resulting turbulence is. Mad Cow disease is another example in which news risky news travel as fast as a fast wind. We still remember the losses of farmers who invested in cows and how rapid the β€œseed of the news” traveled.

Business climate has its cascading effect that is analogous to the rippling effects of the climate. The examples are many and specially those resulting from technological advances. For example, the advancement of publishing e-books has almost disrupted the print industry. Newspapers are being phased out. Even conventional teaching and training have been negatively affected. The development of dynamic teaching material enriched with simulation coupled with the advanced teaching technologies have paved the way for remote teaching and training. The need for highly trained teachers to cope with the needs of the new generations who care for technology has placed heavy burdens on conventional trainers and coaches. The organizational structures of teaching institutions have become inferior and demands are increasing to make them more resilient and agile. Printed academic books must compete now with easily-updated e-books that are more apt to evolve and meeting the ever-changing demand of the new generations. One change is causing waves of new changes.

The risks the climate places on us are analogous to the risks that the changing business climate places on businesses. The eruption of volcanos has the same effect the volcanos of changes impose on businesses. Some of these risks say appear intangible; however, their impact isn’t. The need to move in small steps is paradoxical with the need to do business fast. This paradox and many more constrain our minds and stress them. To be under stress for long time will cripple our creativity.

The above-mentioned trends are happening at times when the need for generating creative ideas to stay away from competitors or disrupt them creatively become more difficult. The age of contradictions and paradoxes we live in is crippling at the time we need to be creative. Therefore, having business leaders and talents is of utmost importance. This is becoming dearer as we encounter the age of interruption and finding antifragile people is getting less.

Where are we heading? I hope your comments remove the fog in my way.



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Ali 🐝 Anani, Brand Ambassador @beBee

#59
Welcome back and it is great to read your comments again. Yes, and I agree with you. Volcanoes is a perfect example of the relationship between business and climate. The examples you give are valid and explore the strength of this correlation. I agree 100% with you. Drought seasons is another example. However; to keep buzzes short I tend to give limited examples.

Ali 🐝 Anani, Brand Ambassador @beBee

#56
Great ideas and are practical. You really make the theory an applied one. This is a very strong recommendation and I am going to use it with due credit to you. The barometer of discussion will be mainly affected by the attendees and their engagement. Hopefully, few minds like yours shall be there.

Ali 🐝 Anani, Brand Ambassador @beBee

#55
"Government has a tough job. Regulating a large group while staying out of the way of individual opportunity"- leaders live in a domain of business paradoxes such as the one you highlight here Harvey Lloyd. Need go move slowly, but pressures on time and by competition call for fast moves. This is another paradox. Control to get results opposing with the need to release control so that creative ideas may emerge is another paradox. Balancing the individual needs while catering for the group interest is a major challenge. The predicament of leaders on this particular issue is huge. For example, aligning the individual goal with the business goal is made more difficult by the need to change directions sometimes. Should this happen the leader might lose the trust of the team and steering them to a new direction needs persuasion beyond normal levels. Yes, the burden is heavy.

Harvey Lloyd

Harvey Lloyd

3 years ago #47

One thought you might consider as you prepare for your July presentation would be to consider the responsibility of Pareto's 20%. The 20% should be providing various opportunities for the 80% to become a part of the 20%, next cycle. Have each attendee write down three things they will do to insure that they pass on from beyond the gate their wisdom. -Each month they will hold voluntary classes where the patterns of success are discussed. -They will write a note to specific peers that assist them in overcoming fear through courage development -They will offer at least once a month for a peer to run the ball of their ideas and debrief afterwards. to name a few. Sounds like it will be a great presentation.

Harvey Lloyd

Harvey Lloyd

3 years ago #46

#54
Government has a tough job. Regulating a large group while staying out of the way of individual opportunity. The two seem mutually exclusive in some points. There is one salient and pointed fact here in America. The individual is the king. Sometimes the group is dissatisfied with the outcome. The alternative is to sacrifice the individual at the altar of the group. Both have issues. But once we turn to the group then we now have humanity at the end of a string. Who holds the string? When we glorify the rights of the individual towards opportunity then the we need not worry about who has the string. Socially the individual is left to develop their own groups and identities without government intervention/homogenization. History bares this choice out in several iterations. The system must always be focused on the individual and their pursuit of happiness. Still a tough system but the the benevolence of those who rather group us and herd us will always turn to tyranny.

Ali 🐝 Anani, Brand Ambassador @beBee

#52
Yes, and the four societal cycles are in line with what you said here. I want to use a scientific reasoning in my response. The presence of voids of varying sizes is the issue. I recall discussing this issue here on beBee in a buzz title "Avoid Building Concrete Relationships" https://www.bebee.com/producer/@ali-anani/avoid-building-concrete-relationships The issue isn't having voids; it is far more having widely varying voids in size. Societal voids with large differences in size shall only lead to disruption. The question is how to make the voids close in size? Your idea of bringing sequentially 20% of the deprived 80% is a great one because it helps in reducing these differential voids. The more I think about your approach, the more I find it sensible and practical.

Ali 🐝 Anani, Brand Ambassador @beBee

#51
You are of very few people I am aware of that discussed the need to deal wisely with the top 20%. You bring fresh thoughts to my mind and I need to digest them later tonight. Great insights indeed.

Harvey Lloyd

Harvey Lloyd

3 years ago #43

This is a very delicate discussion. The gap does exist and its no denying this salient fact. The reasons for the gap is my concern. Value is something that is always available. The question is are you "present" to take advantage of the value as it materialises? Are the top one percent blocking the 99% from being present. If they are then we should stop them from blocking the opportunity. I think that once we delve into to the inhibitors of the 99% we will find many different and desperate things that look very eclectic and difficult to remove. I find it difficult when we reduce a problem down to a single variable that includes destroying one individual to enhance another. It's a powder keg when you discuss the inhibitors as folks want an easy answer. America has behaved itself into a corner since the 30's and now we don't like the results. Nor do we wish to face the music of recovering from poor legislation that started as benevolent thoughts. We can redistribute value all we want but the system is creating the issue. The new system will only insure a different group winds up with the value along the distribution line.

Harvey Lloyd

Harvey Lloyd

3 years ago #42

#50
I agree with the law as described in your comment. But the juice is in the decisions we make to bring the law back into some form of stability. The tension is building because of our methods we are choosing to find stability. If we destroy the top as a method of bringing balance then the pendulum will only swing the other way, not return to balance. Where we force equity in governance we also bring on group policy that marginalizes the individual. Although some benifits will be seen in the short term, over the long term we will see that all individuals wind up with nothing as the bureaucrats/systems have it all. Lenin, Stalin Hitler and many other leaders who saw this imbalance acted out their view that the top needed omission. Equity is a function of regulations that insure outcomes. Opportunity is measured by effort and choices by the individual for an outcome. Once governments cross the line in managing equity it naturally anoints itself moral leader. None of this means that we should not enhance the opportunities afforded any group.

Ali 🐝 Anani, Brand Ambassador @beBee

#49
Great comment Harvey Lloyd Let me start by a quote from your comment β€œPareto's law is applicable within a single environment of controls/physics. When you begin to apply the law across many very desperate situations the law becomes unbalanced and does not reveal a future course of action that is sustainable”. I begin with the fact this law is a power law one and injustice is an innate property of the law. So, your suggestion is to reduce differences and gaps by starting with the top 20% of the deprived 80% to enhance their level and then with the next 20% segment of the 80% and so on is a way of reintroducing balance and makes great sense. Now, what if we keep the gaps as they are? Surely, we shall proceed in a stage of accumulation wherein the rich become richer. This shall lead to a new stage- a disruptive one to move the social structure out of its critical situation. This is the Law of Social Cycles and I may dedicate a post soon to elaborate more on this. As CityVP \ud83d\udc1d Manjit. rightly highlighted, is the networked world the disturbance of the balance is trending in the wrong direction. We have in many sectors a ratio 10/90 and even 1/99 as Manjit explained. This shall lead to huge eruptions because of the tension buildup. No country is immune as what goes in a country shall cascade to many other countries. After all countries are more connected than ever.

Harvey Lloyd

Harvey Lloyd

3 years ago #40

#24
This is the illustration of Pareto's law that produces a reduction argument of very difficult variables that cannot be explained this neatly. When we look at global poverty we can see that government, religion and social law all converge to create poverty or opportunity. These obstacles have been taken away through our Constitution (US). When we look at FPL poverty levels and the less than 3 dollars per day most third world countries exist in we can understand that even the poorest of US citizens are wealthy by comparison. Pareto's law is applicable within a single environment of controls/physics. When you begin to apply the law across many very desperate situations the law becomes unbalanced and does not reveal a future course of action that is sustainable. I believe that western civilization, with all its faults, has created the best opportunities for an individual to find their measure of success. But if we are looking for equity in outcome then we will upset the balance of Pareto's law artificially. The looming question is it sustainable? I fall in the camp of: https://en.wikipedia.org/wiki/William_J._H._Boetcker "The ten cannots" In theory opportunity is what our social setting should be, not outcomes. In this way, with each iteration or attempt a new 20% rise through the paradigm from within the 80%. Recent years though has brought the western civilization into a hands off approach as we look at world poverty. Our fear of exporting our materialism, religions and other factors keep us from addressing social issues that governments cause.

Ali 🐝 Anani, Brand Ambassador @beBee

#47
It is not only your sharing the buzz that makes me delighted. More, is that you connected the dots between my last two buzzes on leadership and the confidence that fills me because of your appreciation. Thank you Harvey Lloyd

Harvey Lloyd

Harvey Lloyd

3 years ago #38

Where philosophy, science and humans meet reality. Two great buzzes that when seen together bring forward wisdom of insight. https://www.bebee.com/producer/@ali-anani/the-iceberg-leader Connecting the dots will assist in seeing the observable world differently.

Ali 🐝 Anani, Brand Ambassador @beBee

#45
Absolutely correct.

Harvey Lloyd

Harvey Lloyd

3 years ago #36

#44
I agree the rule is an observation is amoral. It is within application that we try and add morality or other human attributes.

Ali 🐝 Anani, Brand Ambassador @beBee

#43
Harvey Lloyd that The Pareto Rule is fractal. Meaning that our of every 20% of a level will have 20% of the top 20% (4%) and then 20% of the 20% (1%) will be the next scaling down and so on. To be fractal it means it is an iterative process. This is in agreement with what you said towards the end " What happens to the 80 who fail? Typically they find a new group of 100 to start the process over again. Implying that Pareto observed represents a single iteration of success/failure". Pareto Rule is a continuous iterative process and not a single one. So, I again agree fully with you. 20% of the 80% should be given a chance and then the 20% of the remaining employees and so on. Yes, it is a filtering process. I believe the mistake is in misunderstanding the rule more than in the rule itself.

Harvey Lloyd

Harvey Lloyd

3 years ago #34

Pareto's rule is at the root of many issues. In the physical sciences it shows up in many areas and helps us through the process of understanding our natural environment. Unfortunately the "rule" is applied to humans in ways that only science can describe. The 80/20 rule is an observation. Leaders don't deal in observations they deal in choices within a risk envelope based on many observations. Pareto did not state which 20 made it through to his observation, only that 20 did. A leader has to figure out which 20 have the courage and stamina to pull the company through a specific set of observations. The 80/20 rule is now in play as we discuss equity in outcome. Somehow we have drawn sides that the 20 exploited the 80. The fascinating thing about how the rule is is applied in our current leadership environment assumes that the 80 die and never get a second chance. If we take 100 people and run them through a corporate strategy 20 will float to the top because of the specific strategy/need. The next strategy will see a different set of skills needed and a new set of 20 emerge. The 80/20 rule should not be used in a linear fashion but more like a funnel. With each cycle a different 20 elevate themselves through the process. Humans are not pure nature as they have free will to change their perspective of the rule. What i find amazing is that the rule also applies to leaders. Only 20% of the current leaders will survive the next crisis. What happens to the 80 who fail? Typically they find a new group of 100 to start the process over again. Implying that Pareto observed represents a single iteration of success/failure.

Ali 🐝 Anani, Brand Ambassador @beBee

#41
Thank you dear Renoy George for your outstanding comment and sharing the buzz. I am going to share with you a personal experience to reflect the soundness of your comment. Some years back a client who is in the business of importing food and related products if I could advise him on importing a selected item. That time I was working on wind energy and weather forecast was one of my concern. Using my knowledge in this field I started looking for items that depend on weather. I concluded that coffee would be a good candidate because that year the weather in Brazil was likely to be frosty. This meant the produce of coffee would be reduced. Less supply means higher prices. So, I advised my client to import more coffee beans. He did and was lucky enough that my forecast turned true. My client made huge profits. Yes, weather and business are inter-dependent.

Ali 🐝 Anani, Brand Ambassador @beBee

#39
True what you said Claudio Vetica. I hope we become more aware of this fact.

Ali 🐝 Anani, Brand Ambassador @beBee

#37
I shall be willing to explore this possibility with a reputable training group in Jordan. Actually, I am hosting three sessions on advanced leadership next July in Istanbul and the group is the organizer. I shall talk to them as soon as you are ready.

Ali 🐝 Anani, Brand Ambassador @beBee

#35
All what I know for sure my friend I wish I were nearby to attend your training on "subspace thinking". Hove you written about this topic Edward Lewellen. Maybe it is your next book! Thanks for commenting my friend.

Liesbeth Leysen, MSc. beBee Global Brand Ambassador

#30
it seems to be a gift, I will treasure it Ali \ud83d\udc1d Anani, Brand Ambassador @beBee

Ali 🐝 Anani, Brand Ambassador @beBee

#29
Thank you for sharing the buzz

Ali 🐝 Anani, Brand Ambassador @beBee

#27
I plan to write a buzz on disconnectedness and how societies develop . Very interesting that you read my intentions.

Liesbeth Leysen, MSc. beBee Global Brand Ambassador

see the invisible thread that connects all things

Liesbeth Leysen, MSc. beBee Global Brand Ambassador

see the invisible thread that connect all things

Liesbeth Leysen, MSc. beBee Global Brand Ambassador

everything is connected Ali \ud83d\udc1d Anani, Brand Ambassador @beBee and your article proves that once more

Ali 🐝 Anani, Brand Ambassador @beBee

#24
- I have just run across this reference while reviewing literature https://arxiv.org/abs/cond-mat/0412004 When the probability of measuring a particular value of some quantity varies inversely as a power of that value, the quantity is said to follow a power law, also known variously as Zipf's law or the Pareto distribution. Power laws appear widely in physics, biology, earth and planetary sciences, economics and finance, computer science, demography and the social sciences. For instance, the distributions of the sizes of cities, earthquakes, solar flares, moon craters, wars and people's personal fortunes all appear to follow power laws. The origin of power-law behaviour has been a topic of debate in the scientific community for more than a century. Here we review some of the empirical evidence for the existence of power-law forms and the theories proposed to explain them

Ali 🐝 Anani, Brand Ambassador @beBee

#24
Pareto Rule is also a power Law CityVP \ud83d\udc1d Manjit. It is fractal in nature meaning that among the richest 20% group there is 20% of the 20% (4%) who owns 80% of the wealth. Then 20% of the 4%.5%) own 80% of the wealth. It is a self-scaling law. Yes, the 20% isn't exact and the internet is the cause of this.

CityVP Manjit

CityVP Manjit

3 years ago #21

In terms of business I usually think of climate as a euphemism for culture or at least a cultural barometer. The Power Law is far more acute than even Pareto, thus today we talk about the 1% and the 99%. When I read an article claiming 9 men have more combine wealth than the poorest 4 Billion - it further underlines where Pareto operates and where acute differences become extremely extreme. https://www.independent.co.uk/news/world/richest-billionaires-combined-wealth-jeff-bezos-bill-gates-warren-buffett-mark-zuckerberg-carlos-a8163621.html

Ali 🐝 Anani, Brand Ambassador @beBee

#22
And keep doing your "thing" Lyon Brave. The complexity of weather makes it hard to understand

Lyon Brave L

Lyon Brave

3 years ago #19

I have spent a lot of time trying to understand the climate and I think it has stopped me from acting...i just need to do my thing!!

Ali 🐝 Anani, Brand Ambassador @beBee

#20
thank you dear Randall Burns. This is very kind of you.

Randall Burns

Randall Burns

3 years ago #17

#9
I'm flattered and humbled Ali \ud83d\udc1d Anani, Brand Ambassador @beBee Please feel free to use that term, it was after all your Buzz that inspired it.

Ali 🐝 Anani, Brand Ambassador @beBee

#17
thank you dear Debasish Majumder for your expressive comment. You expressed later your comment in a beautiful poem about leaders. I commented and shared it

Ali 🐝 Anani, Brand Ambassador @beBee

#16
thank you Jerry Fletcher for your comment enriches the discussions. I liked in particular your fractal explanation of the various climates that businesses are exposed to. These climates are interconnected and affect each other through feedback. A lot to ponder on

Debasish Majumder

Debasish Majumder

3 years ago #14

excellent buzz sir Ali \ud83d\udc1d Anani, Brand Ambassador @beBee! Nitrogen, being an inert gas, can transform into a toxic one, provided the temperature may increase owing to volcanic eruption and other conditions, primarily designed by humans, causing acid rains, extremely harmful to human beings as well plants and other animals. so the temperature and pressure makes a predominant role to determine the milieu we are living with. so, it is the nature's rage, primarily responsible for our obnoxious traits! our creative ideas may instantly enable us to generate revenues, but for long run it is our innovative ideas(!) which may be the ruining ideas for us! i guess, creative itself is a pejorative notion, unless it facilitate mass. it is intriguing that creative and disruptive both are available in our milieu and one may become predominant, depending upon the circumstances we are dwelling with and that also being focused to serve the purposes of whom! i guess, fog is the only impediments for few to cloud many with obscure and obscurantism, leading many to experience the misery for many out of few peoples whims and lack of foreseen future. however, nice buzz. enjoyed read and shared. thank you for the share sir.

Jerry Fletcher

Jerry Fletcher

3 years ago #13

Dr. Anani, once again you have tickled the little grey cells. Thank you for providing an analogy to analyze. It reminds me of a forthcoming book by a client and friend. In the first chapter he deals with Myths of Leadership noting that much of what we hold as givens are not. The idea that any place or region is "aafe" is on of those myths. the idea that business is completely different from the rest of the world is another. Business Climate is, indeed, impacted by Weather climate. And to my way of thinking, Political Climate, Financial Climate as well as Trust Climate. All of them impact each other and all are interdependent.

Ali 🐝 Anani, Brand Ambassador @beBee

#13
I am so glad and privileged that this buzz is hosting such great comments as yours Roberto De la Cruz Utria. You are wise to write that the social linkages are subject to sudden unnoticeable threats. Yes, if these nets reach their criticality they collapse like a pile of sand falling suddenly upon the addition of just one grain of sand. As you said, we must be prepared for such scenarios using different methods. At least when such things happen we shall have then the muscles to deal with them.

Ali 🐝 Anani, Brand Ambassador @beBee

I dare to invite Javier \ud83d\udc1d beBee

Ali 🐝 Anani, Brand Ambassador @beBee

Thank you Bill King for sharing the buzz. Greatly appreciated.

Ali 🐝 Anani, Brand Ambassador @beBee

#8
Fantastic comment dear Bill King. It is so relevant and highlights with great clarity many of the new research findings. I am absorbed by your writing "Some businesses may be in hurricane or tornado zones, these threats are cyclical. Some businesses may be in an earthquake zone. Very beautiful, sunny climate but the threat the ground their foundations built on could shake violently at any moment". Again, I shall quote these lines in my sessions in Istanbul with due credit to you. As for your writing "I would think companies should first make sure they understand where they live". Yes, spot on and I always say you must know where you stand before knowing your direction to where to go. No question asked. As for your writing "I wonder if the response and recovery steps to each different type of natural disaster could be applied to each type of business climate". my answer is know for as long as there changes there are associated risks. Many risks emerge and they take us by surprise. However; we shall have more agility in responding to them if we do the preparations you highlighted in your valuable comment.

Ali 🐝 Anani, Brand Ambassador @beBee

#7
You amaze me more with every comment you write Randall Burns will have something to comment on your relevant comment. You delighted me.

Randall Burns

Randall Burns

3 years ago #7

#6
With all joking aside Ali \ud83d\udc1d Anani, Brand Ambassador @beBee this illustrates your brilliant analogy of how volatile and unpredictable the business world really is. You're absolutely right in your comment regarding The Butterfly Effect. While I have no answers to help you to "remove the fog in my way", I can only advise you, or anyone, to proceed cautiously, intelligently, insure all of your running lights are on and use a loud foghorn. This point is the perfect segway to bring in a point from your last post, "Changing Directions Purposefully", where you state; "The urgent needs of the moment shall overweigh following strategic plans. It is alertness and agility to the surrounding conditions that shall make the business succeed and not adherence to the rocks of rigid plans." While any business plan needs long term goals/priorities/plans, it is the "weather of the moment", and any changes that occur that are contrary to forecast models that need to be addressed as a priority.

Ali 🐝 Anani, Brand Ambassador @beBee

#4
Because any mistake in measurement of current data become inflated after three days so that forecasting the weather progressively falls of. So, yes there is saying that we can best predict the weather for three days within 80% accuracy. This is because of the butterfly effect that cause big differences for small variations in measurement. So, your observation is spot on Randall Burns

Ali 🐝 Anani, Brand Ambassador @beBee

#3
Not only an interesting example, but also augments the analogy between the two climates. I greatly appreciate your input Randall Burns

Randall Burns

Randall Burns

3 years ago #4

P.S. Just to clarify my point it seems that every time the weather channel forecasts clear and sunny days I seem to get rained on by the 3rd green around 80% of the time. :-)

Randall Burns

Randall Burns

3 years ago #3

Interesting analogy and great post Ali \ud83d\udc1d Anani, Brand Ambassador @beBee your reference to the "80/20" rule is relevant and applicable and as with the business world and trying to foresee/forecast the future of business it is the same as a weatherman trying to foresee/forecast the weather; The best weathermen, (women), are right about 20% of the time. Is this another example of the Pareto Rule?

Ali 🐝 Anani, Brand Ambassador @beBee

#1
John Rylance- I meant atmospheric climate. However; dictionary defines climactic as acting as a culmination or resolution to a series of events; forming an exciting climax. So, your comment is relevant. I tried to compare the climate around earth and climate around business. As you said in the last line of your comment I tried to relate the two and also show how we may advance business if we understand the complexity of weather. I thank you for your comment.

John Rylance

John Rylance

3 years ago #1

My dictionary highlights the possible confusion between climatic and climactic. The former as used in your piece suggests a general trend, attitude, or situation, whereas climactic suggests a critical period leading an exciting climax. The latter seems more in keeping with the picture and the content of this post. I think we often underestimate the effect of climate has on how we rest work and play.

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