Climatic patterns

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Climatic patterns are rules of the game. These patterns apply across contexts, regardless of your choice, such as components evolving due to competition or more evolved components enabling higher order systems.



Everything evolves through supply and demand competition

Every activity, practice, data type, etc. starts in the Genesis stage, and either evolves toward the Commodity stage, or dies along the way. Things evolve through vendors competing to improve the product (supply side evolution) and through the market adapting to take better advantage of the thing (demand side evolution).

    main page:  Everything evolves

No single method fits all

    main page:  No single method fits all

Rates of evolution can vary by ecosystem

Components can co-evolve

From chapter 11 in the book:

All components can evolve whether activities, practices, data or knowledge but they can also co-evolve. This is commonly seen with the co-evolution of practice (how we do something) with the evolution of an activity (what we do) especially as we shift from products to more industrialised forms. What causes this is the change of characteristics of the activity. DevOps is one such example of co-evolution.[1]

Characteristics change as component evolve

From chapter 11 in the book:

The characteristics of a component in the uncharted space are not the same as the characteristics of the same component when it becomes industrialised. In any large system then you're likely to have components at different ends of the evolution scale. This leads to the Salaman & Storey Innovation paradox of 2002 i.e. the need to innovate requires polar opposite capabilities to the need to be efficient. However, a word to the wise, a company has to manage both the extremes along with the evolution between them. It's really important to remember that there is a transition from uncharted to industrialised. Don't organise by the extremes alone.[2]

Evolution consists of multiple waves

From chapter 11 in the book:

Evolution consists of many instances of the same act e.g. a phone, a better phone and an even better phone. Every instance of an evolving act will diffuse through its applicable market. Those markets will change as the act evolves i.e. the market for first custom built phones is not the same as market for more industrialised phones. The process of evolution can include sustaining, incremental and discontinuous change e.g. product to product improvements or product to product substitution. This path is not smooth, it is not linear, it has many branches and dead ends (e.g. phones that failed). Furthermore the actions of individual players are unpredictable. Hence you can know the direction (e.g. phones will industrialise over time) but not the steps and the exact path taken (this phone will be more successful than that phone) until you have walked it.[3]

No choice over evolution

Red Queen

From chapter 11 in the book:

In a competing ecosystem then the pressure for adoption of a successful change increases as more adopt the change. This is known as the "Red Queen" effect i.e. you have to continuously adapt in order to keep still (in terms of relative position to others). The one thing that standing still will guarantee is that you will be overtaken. It has a secondary effect which is by adaptation then competitors limit the growth of a single company and prevent a run away process.[4]

Commoditisation <> Centralization

From chapter 11 in the book:

Don't confuse evolution to a commodity with centralisation. They are governed by different factors and an industrialised component can easily yo-yo between centralised and decentralised forms. Competitor gameplay is one of those factors which determine whether we're going to start with a more centralised or decentralised world.[5]


Higher order systems create new sources of value

From chapter 11 in the book:

It is the genesis of new acts, enabling new user needs that creates future sources of differential value. I specifically state "enabling" because in many cases the users are unaware of the future needs they might have.[6]

Future value is inversely proportional to the certainty we have over it

From chapter 11 in the book:

Genesis of a component is inherently uncertain but it is also the point at which a component has its highest future value. You have to gamble with the novel but there's also the potential for huge rewards. As the component evolves, its potential for differential value declines as it becomes more ubiquitous in its applicable market.  This also means that any component that has not reached ubiquity must retain some uncertainty and some element of risk. The only conditions where a well understood, risk free component exists that is not ubiquitous and is of high value is when there is some form of restriction on competition e.g. a constraint through patents or monopoly. Care must also be taken not to confuse the terms common as in "everyone has one" with ubiquity to its applicable market. Many components have resource constraints (e.g. gold) or the market need is specific (e.g. wigs for barristers and judges).[7]

Efficiency does not mean a reduced spend

Jevon's Paradox

From chapter 11 in the book:

Whilst evolution does result in more efficient provision of a component this should be not be confused with a reduction of spending on it. In many cases there is a long tail of unmet demand that efficiency will enable or previously uneconomical acts that become feasible or even the creation of new industries that result in greater demand. This is known as Jevon's paradox.[8]

Evolution to higher order systems results in increasing local order and energy consumption

From chapter 11 in the book:

The constant evolution of components and creation of higher order systems that then evolve means we are always moving to a more ordered environment by reducing local entropy. This requires the constant input of greater amounts of energy though in some cases this can be hidden due to efficiency in previous wasteful consumption.[9]

Capital flows to new areas of value

From chapter 11 in the book:

The lines on the map represent flows of capital whether it's between two existing components or a component and its future more evolved self. Financial capital will seek the area of most consistent value. Hence in the evolution from product to a utility then capital will tend to move away from the pre-existing product forms and towards the more industrialised component and the new industries built upon it.[10]

Creative Destruction

Joseph Schumpeter

From chapter 11 in the book:

The combination of inertia, a punctuated equilibrium, the red queen and co-evolution of practice means that as we shift across a boundary e.g. product to utility then we tend to get rapid destruction of the past (from business models to practice) along with creation of the new (industry and practices). This was described as creative destruction by Joseph Schumpeter.[11]


Efficiency enables innovation

From chapter 11 in the book:

Genesis begets evolution begets genesis. The industrialisation of one component enables novel higher order systems to emerge through componentisation effects. But it also enables new features for existing products to appear or even the evolution of other components. The industrialisation of mass communication to a standardised utility such as the internet enabled the industrialisation of computing to a utility. I use the word innovation to describe all those changes from the genesis of a new act, feature differentiation of an existing act or a change of business model (e.g. shift from product to utility). The evolution of one component and its efficient provision enables innovation of others.[12]

Shifts from product to utility tend to demonstrate a punctuated equilibrium

From chapter 11 in the book:

The shift across a boundary e.g. from custom to product or from product to commodity tend to visibly exhibit rapid exponential change and a shift from the past. This is known as a punctuated equilibrium.[13]

Evolution of communication mechanisms can increase the speed of evolution overall and the diffusion of a single example

From chapter 10 in the book:

When we examine how things have evolved over time then nuts and bolts took over 2,000 years to industrialise,  electricity took 1,400 years, the telephone merely 60 to 80 years and computing some 60 to 70 years. What has changed during that time is industrialisation of communication mechanisms. As we move up the value chain (see figure 126)  then the speed at which things evolve across the landscape is impacted by industrialisation of communication mechanisms. The printing press, the postage stage, the telephone and the internet did more than just industrialise a discrete components in a value chain, they accelerated the evolution of all components.[14]

From chapter 11 in the book:

Evolution consists of many diffusion curves. If a means of communication evolves to a more industrialised form - whether printing press, postage stamp, telephone, the internet - then the speed of diffusion curves can increase. This in turn can accelerate the rate at which future components evolve. Care should be taken here, not to confuse faster evolution with us becoming more innovative as a people. Certainly we have greater opportunity to build new things but don't assume we're getting smarter.[15]

Increased stability of lower order systems increases agility & speed of re-combination

Change is not always linear

Discontinuous and exponential change exists

From chapter 11 in the book:

There can often be a perception that change is gradual because one instance of a component (e.g. a product) is replaced by another in the same stage of evolution (i.e. a more feature complete product). This illusion of smooth and gradual change lulls us into a false sense of security that all change is such.[16]


Success breeds inertia

From chapter 11 in the book:

Any past success with a component will tend to create resistance to changing that component. There are many different forms of inertia.[17]

Inertia increases the more successful the past model is

From chapter 10 in the book:

With any established value chain, there are existing interfaces to components along with accompanying practices. There is a significant cost associated with changing these interfaces and practices due to the upheaval caused to all the higher order systems that are built upon it e.g. changing standards in electrical supply impacts all the devices which use it. This cost creates resistance to the change. You also find similar effects with data or more specifically our models for understanding data. As Bernard Barber once noted even scientists exhibit varying degrees of resistance to scientific discovery. For example, the cost associated with changing the latest hypothesis on some high level scientific concept is relatively small and often within the community we see vibrant debate on such hypotheses. However changing a fundamental scientific law that is commonplace, well understood and used as a basis for higher level concepts will impact all those things built upon it and hence the level of resistance is accordingly greater. Such monumental changes in science often require new forms of data creating a crisis point in the community through unresolved paradoxes including things that just don’t fit our current models of understanding. In some cases, the change is so profound and the higher order impact is so significant that we even coin the phrase “a scientific revolution” to describe it.[18]

From chapter 11 in the book:

The more success we have had with a component then the more resistance and bias we have against it changing.[19]

Inertia can kill an organization

From chapter 11 in the book:

Contrary to popular belief, it's not a lack of innovation that harmed companies such as Blockbuster and Kodak but instead inertia to change created by past success. Both these companies helped develop the future industries but suffered at the hands of their past business models.[20]


Competitors actions will change the game

From chapter 11 in the book:

Climatic patterns are ones that depend upon aggregated market effects e.g. evolution through supply & demand competition. This means that you cannot stop them without preventing competition in the market and the existence of competitors will cause them to happen.[21]

Most competitors have poor situational awareness

From chapter 11 in the book:

Competitor actions are an important part of anticipation. In general however this is not something that you can directly control or even anticipate beyond aggregated effects. Fortunately in today's climate then most competitors act as blind players in which case you do not need to dwell too much on their actions. When you make a move, they are unlikely to understand why or counter you. In the near future, given the potential interest in business algorithms, they maybe even become anticipatable blind automatons following coded secrets of success. In much the same way that Dan Mirvish noted that when Anne Hathaway was in the news, Warren Buffett's Berkshire Hathaway's shares went up which was hinted at being due to sentiment analysis run by robotic trading platforms. This could make the game even easier.[22]


Not everything is random

In some situations, you can predict the probability of what will happen, but not when. In other situations you can reliably predict when something will happen, but not exactly what.

From chapter 11 in the book:

Not everything is uncertain within the map. There are various aspects which can be anticipated though the level of predictability is not uniform. In some cases you can say what will happen due to aggregated market effects (e.g. this act will evolve) but not precisely when the next iteration of a more evolved product will appear (e.g. it depends upon actors action). In other cases you can anticipate both the what and the when.[23]

You cannot measure evolution over time or adoption, you need to embrace uncertainty

From chapter 11 in the book:

The only consistent mechanism I've found for measuring evolution is ubiquity and certainty i.e. how well understood, complete and / or fit something is for the environment.[24]

Economy has cycles

Peace, war, and wonder

From chapter 11 in the book:

The economy demonstrates cycles such as the peace, war and wonder cycle.  We start with the wonder of a new, uncommon and poorly understood thing. As we learn more then the applicable market grows and products are produced. New giants form and dominate a rather peaceful time of sustaining competition. There is some disruption (i.e. product to product substitution) and the competition is still fierce but the giants generally weather these storms. Then the act evolves to more industrialised forms, new entrants become the new titans, past giants tend to fall being stuck behind inertia barriers created from their own success. This is the time war where competition becomes life threatening for those past giants. New industries built on the industrialised components form and a new state of wonder is born.[25]

The less evolved something is, then the more uncertain it becomes

From chapter 11 in the book:

By definition, the novel and new are more uncertain than industrialised components such as commodities and utilities.  The uncharted space consists of the unknown i.e. "Ere be dragons".[26]

Two different forms of disruption


From chapter 11 in the book:

There is more than one form of disruption such as the unpredictable product to product substitution to the more predictable product to utility substitution. The latter can be anticipated through weak signals.[27]

"War" (point of industrialization) causes organizations to evolve

From chapter 11 in the book:

The industrialisation of an act will tend to cause co-evolution of practice and changes to how organisations operate. If the component is significant then this can lead to a new form of organisation.[28]