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Hello everyone. Welcome to the 5 Minutes Podcast. Recently I was listening to the Sapiens book by Yuval Noah Harari. I have already read it, but this time I was listening because it comes with some quite nice insights, and of them, in one of the chapters, he was talking about the chaotic level of systems, and he was explaining level one and level two, trying to analyze why history is so unpredictable, why things change so dramatically in the short time frame. And when I saw that, I started doing some quick research to share with you about the concept of chaotic systems. First, what is a chaotic system? A chaotic system is a system that has, as the main part of its DNA, disorder, the absence of order. It means that it has no predictability; it has no evident pattern that you can follow. There is no mathematical rule that can clearly explain how the events evolve. This is a chaotic system. A perfect example of that is the butterfly effect. I already said this in another podcast, but when you have an event that can do like a fly of a butterfly, that can create a hurricane in the other part of the planet, because it's small things, when they aggregate over time, they can become very relevant things. And this is the concept around this chaotic system. But what is important is that not all chaotic systems are the same, and they have the same complexity thinking that they are chaotic.
The first one is the level one chaotic system. And what are these level one systems? They are completely chaotic, but they can be measured. It means that when you measure them, they do not change by being measured. A perfect example is whether it's an extremely complex process, but because you are using a computer to measure the weather or to create a forecast for the weather, you are not changing the weather. The weather does not know that there is a computer trying to speculate if the weather will improve or not in three days. The weather is the weather. And, of course, please, I'm not talking about OC, but you can alter the weather by throwing some chemicals in the clouds. And this I'm not talking; we are talking about normal people trying to make a normal evaluation of the forecast because you have work to be done in your project in three days, and you need to know how the weather is. It's very complex. It allows a lot of fluctuation, but it's feasible, and it's becoming good over time. We are becoming good at that type of analysis. But what is level to level two is far more complex because level two chaotic systems are the systems that change as you measure them. By simply measuring them, you are changing the probability, and you are changing the behavior of that complex system.
Let me give you an example. It's the same example that Yuval used in his book, the Stock Market. And let's suppose that you are a brilliant genius and you found an AI system that is absolutely perfect for predicting the behavior of one specific stock. And this system shows you that tomorrow the stock of Company X will increase from $90 to $100. And you know that. And it's perfect. The prediction is 100% true. Let's suppose this is a fact. What happens? You will if you are smart. And if I knew that, I would sell everything I have, make most of my assets and transform them into cash, buy these stocks and sell them tomorrow and make a 10% profit in one day. This would be perfect, right? However, when someone shares this and starts to make, for example, this public, what will happen? It's not only you, but every single human being will do the same. And what happened? The price of the stock that would become we turn 100 tomorrow will turn 100 today. It's simple like that because the supply is the same, but the demand increases dramatically because you, your friends, and everybody else want to buy. And then the price that was expected to turn to. Grow into 100 became today because of these movements. So your prediction changed by people's behavior when they saw that specific prediction? Another example, let's suppose, for example, COVID.
Covid is an absolutely level two chaotic system because we don't have it at the beginning. It was much less chaotic at the very beginning. But when it became a pandemic, then it became a level two chaotic system because of what happened with all of us for the first six months. We were all looking forward to finding magic solutions. And what happens the first moment all toilet paper comes to an end? What happens by someone starts? I don't even know how. What triggered this chaotic behavior? But what happened? The full irrationality of the market. Just wipe it off all toilet paper on the planet in a matter of days. Right. And was it a problem with toilet paper? No, it was the behavior of people while facing a chaotic scenario. And this is the same for medicines that later did not prove to be successful. And this is the amount of chaos that you are talking about on level two. And why I'm talking about this because, in your project, many of the relevant risks or disruptive risks are coming from level to chaotic systems. I know that when I say that, you become depressed, right? Because you say, Oh, Ricardo, this is the worst news I could have. Right? Because, you know, I'm telling you that the most relevant and the most impactful and the most disruptive risks you will face will come from things that, you know, even.
Maryn, it is a challenge. And yes, and my answer when you are facing this is because I work a lot with crisis management and these complex systems, and most of the time, one of the key aspects of delivering projects in this environment is your ability to adapt. And if I go back to the PMBOK Guide, seventh edition, principle number 12, it's adaptability. And adaptability, for me, is key. So for you to survive in this chaotic system, you need to adapt yourself to this chaos you need because there is no way you can predict them. With the current technology, with the current knowledge we have, maybe in the future we will, but not today. But you need to be able to adapt. This is why adaptability is one of the key aspects for people to be successful in delivering projects. Because when you are adaptable, you can find different paths in order to deliver your project. If one of the paths is facing this chaotic system and it will face, for example, the global supply chain today inflation that we are facing, all of these combined together create all these challenges. So think always about that. Try to understand them, realize these complex systems, and improve your ability to adapt to them. I hope you enjoy this podcast, and see you next week with another 5 Minutes Podcast.