A better way to think about chaos and disruption

Unless you’re in a coma, you already know that the world today is an increasingly chaotic and uncertain place.

Riots in Greece, economic chaos in Europe, tensions in the Middle East, fiscal cliff nausea here at home. And that’s just on Page One. The news is consistently ugly and depressing.

In the U.S., fiscal conservatives and tea party types blame government for all of our problems.

Progressives and Occupy Wall Streeters blame business.

Nobody seems to have the answers and things seem to get more chaotic by the day.

It’s all about institutions

I don’t have the answers either of course, but I do have a theory that hopefully offers context: It’s all about institutions.

Or rather, it’s all about the creative destruction of old institutions to make way for new ones.

We are going through a particularly chaotic time in world history right now because many of the institutions that we’ve depended on for social and economic stability have outlived their usefulness and effectiveness.

It’s been said so often that it’s a cliché, but the Internet really does change everything and we are in the eye of an information age hurricane that is causing  huge disruptions.

Centralized institutions worked for us throughout the industrial age because they were an effective way to bring order and stability to economic and social systems. Yes, we had our hiccups, but for the most part they brought us remarkable prosperity.

But today, many of the institutions that we’ve counted on for stability and prosperity are failing us…

Government no longer works; Wall Street is plagued with rampant corruption; Government and business scratch each other’s backs in a perverse form of cronyism to protect each other’s interests; The jobs that created a middle class in an America that was the envy of the world are rapidly disappearing and aren’t coming back.

Staid institutions on which we’ve relied for stability for roughly the last 100 years have grown creaky, arthritic and corrupt and can no longer respond and react effectively to today’s challenges.

And as institutions so often do, hanging on desperately to the old way of doing things is less painful than adapting to a new paradigm. This causes disruptions to be magnified even more.

There are no sacred cows

So how can you prosper and thrive in an age of chaos? Here’s a start:

Recognize that there are no longer any sacred cows. The rapid changes we are going through put absolutely everything on the table, and our past beliefs and certainties are no longer operative or even necessarily helpful.

The wave of creative destruction unleashed by the Internet means we need to think anew about almost everything.  A few examples…

Food and how we eat: People like Jules Dervaes are challenging the institution of industrial farming. He grows an incredible 6000 pounds of food annually in his backyard, which sits on less than 1/10th of an acre.

People like Dervaes and tens of thousands of other organic farmers and permaculture experts are sharing best practices instantly with a global audience over the Internet.

The rapidity and depth of this knowledge transfer is staggering. It is showing us a completely different and more self-reliant way to feed ourselves without relying on an increasingly shaky industrial food system.

How we educate ourselves: Online educational resources like Coursera and the Khan Academy are revolutionizing the way we educate ourselves by offering free courses (including advanced college courses) over the Internet.

They are challenging the entire institution of education from grade schools through college and the implications are profound: Will there soon come a day where public schools are viewed as an anachronism?

In the not too distant future, will your children really need to take on massive debts for a four-year college education, or will they be able to get a better education for free over the Internet?

How we travel: Online services like airbnb.com and zipcar are revolutionizing the way we travel.

Airbnb.com allows business travelers and vacationers to rent a room in someone’s house for a fraction of the cost of a hotel room. To you and me it may sound weird and creepy to sleep in a stranger’s house when traveling, but for thousands of travelers who swear by the service (and have booked more than 10 million nights in others’ homes so far), it’s an innovative and unique way to save money and make new social connections.

Services like Zipcar allow us to avoid buying a car altogether. Zipcar subscribers simply pay for cars by the hour, use them as they need them, and then return them to a parking space for the next user.

How we invest or even borrow money: Online peer-to-peer lending services like LendingClub.com are challenging the banking institutions by allowing borrowers to connect directly with individual lenders online.

Lenders can invest directly in borrowers based on different levels of credit risk. LendingClub claims that 93% of its investors earn between a 6%-18% return.

If you’re an investor, and assuming the claims are accurate, ask yourself where in the world right now could you get those types of returns.

How we work: Online services like Odesk are even challenging the whole notion of how we think about a job. Odesk allows us to “plug and play” contract labor into projects or assignments instantaneously. When the project is over, the Odesk contractor is paid through PayPal and moves on to a new client with a new project.

You may notice a few changes to our website from time to time. Who does the work? We use Odesk to find highly talented programmers, web designers and SEO experts from as far away as Bangladesh. We’re currently working with Lenny from Puerto Rico… Someone we’ve never met face-to-face and probably never will.

Opportunity from chaos

Here’s the point: Every one of these services have the potential to completely upend old institutions. Obviously, some will succeed spectacularly and others will fail just as spectacularly.

But there’s no denying the trend… New institutions are springing up extremely fast and old institutions are dying slowly. That creates a tectonic shift that is a  recipe for chaos and disruption. But it also creates opportunity…

If you’re a schoolteacher, what are you doing to prepare for the potential revolution in education?

If you own a home or car, could you earn extra income through a company like airbnb? Could you save $15,000, plus annual insurance and fuel costs by using a service like zipcar instead?

If you’re an entrepreneur, have you ever considered that you may not even need employees, but could thrive by hiring contractors through services like Odesk instead?

Chaos and disruption don’t have to be bad… They can just as likely create huge opportunities.

I would really love to hear about some of the other disruptive ideas you have come across. If you have examples, please do share them…

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