Apple Photo Book: "Future Think" - Review of an Intriguing Book on How to Adapt to Change Part Three

Thursday, June 13, 2013

"Future Think" - Review of an Intriguing Book on How to Adapt to Change Part Three

Parts I and II of the book “Future Think: How to Think Clearly in a Time of Change,” by Edie Wiener and Arnold Brown, were discussed in the first two articles in this series. The book is a guide to understanding change and how best to respond to it.

The book is broken into four main parts. Part I is about the personal biases that we each have, that may prevent us from seeing change or understanding it. Part II of the book is about organizational biases, which throw up roadblocks to making changes.

Part III of the book is about freeing our mind to see the big picture once we can begin to get past the personal and organizational biases that influence what we see. Mathematical concepts can help us understand societal events and trends. The authors describe three mathematical concepts that enable us to understand how the world is changing from a big picture perspective: The Law of Large Numbers, Demography, and The Lowest Common Denominator. Many examples are given for each of these ideas.

Although we are “surrounded” by The Law of Large Numbers in everyday life, it isn’t something we tend to think about. It essentially means that the greater the number of trials, the greater the probability that the outcome can be statistically predicted. (Flip a coin ten times and it may come up heads seven or eight times; flip it 1000 times and it will likely come up heads about 500 times.) This law gets even more interesting when you consider it means that the larger the sample you are dealing with, or the longer the length of time, “the higher the probability of any occurrence, statistical or random.”

The authors give critical mass as an example that flows from this law. Even if the probability of something occurring is small (e.g. 1 percent of the population is violent), given a large enough population that small percentage can have a major impact. So, in a group of 100 people, the one violent person can be controlled by the other 99. However, this gets increasingly difficult as the number of people grows. In a group of 1,000, with 10 violent people, the majority of 990 may be able to control 9 of those people, but one will probably be able to exercise his violent tendencies. When you look at one million people, the majority of 990,000 may be able to control 9,000, but now 1,000 succeed in violence. The violent individuals reach a critical mass – the percentage of them remains the same, but now their numbers are so large their strength is multiplied and so is their impact.

Being aware of The Law of Large Numbers can prevent us from being surprised by changing events and trends. And from a marketing perspective, the law illustrates how both niche markets and large markets are important to businesses. When you have a very large population, actual numbers carry more weight than do the percentages. Thus a niche market can be very lucrative. For example, the wealthy are a small proportion of the U.S. population, but a small percentage of 300 million people is a lot of people! On the flip side, the rural poor, a neglected market, constitute a very large proportion of the world’s population. Many small sales to such a large number of people can also be very profitable.

How does the Law of Large Numbers apply to your business? This can be looked at within your own area of business, as well as in terms of national and international trends. What are the trends that impact your customer base – what growing populations affect your business – what niches are growing as these populations increase?

The Law of Large Numbers and the other mathematical concepts illustrated by the authors give credence to those who have always said math is important and useful in our everyday lives!