"Imagine the power of four billion connected minds—are you prepared for the innovation about to be unleashed?"

It's a thought-provoking question from McKinsey Quarterly authors, posed in an article on the implications of an increasingly interconnected world. The article describes "The Global Grid," one of what the Quarterly is calling the "five forces," or global trends, that will define the coming era. These forces (not Michael Porter's five forces shaping industry dynamics), while framed in terms of their impact on the corporate world, will of course have implications well beyond profits and losses.

Here's a summary of each global trend, from the website. Read the full slate of related content here.

The great rebalancing. The coming decade will be the first in 200 years when emerging-market countries contribute more growth than the developed ones. This growth will not only create a wave of new middle-class consumers but also drive profound innovations in product design, market infrastructure, and value chains.

The productivity imperative. Developed-world economies will need to generate pronounced gains in productivity to power continued economic growth. The most dramatic innovations in the Western world are likely to be those that accelerate economic productivity.

The global grid. The global economy is growing ever more connected. Complex flows of capital, goods, information, and people are creating an interlinked network that spans geographies, social groups, and economies in ways that permit large-scale interactions at any moment. This expanding grid is seeding new business models and accelerating the pace of innovation. It also makes destabilizing cycles of volatility more likely.

Pricing the planet. A collision is shaping up among the rising demand for resources, constrained supplies, and changing social attitudes toward environmental protection. The next decade will see an increased focus on resource productivity, the emergence of substantial clean-tech industries, and regulatory initiatives.

The market state. The often contradictory demands of driving economic growth and providing the necessary safety nets to maintain social stability have put governments under extraordinary pressure. Globalization applies additional heat: how will distinctly national entities govern in an increasingly globalized world?

"When I quote others, I do so in order to express my own ideas more clearly," French Renaissance writer Michel de Montaigne has written. I could not help but recall this idea as I read Malcom Gladwell's "Blowup." In this essay, published fourteen years ago, Gladwell explains with astonishing clarity exactly my thoughts on the tiresome financial and economic crisis blame game that still(!) remains fashionable. The essay is a preemptive argument against the scapegoating we have seen, and is so relevant to today's situation it's amusing. Unsurprisingly, perhaps, it turns out the world proceeds unnoticing of the argument, which he sums up in his subtitle: "Who can be blamed for a disaster like the Challenger explosion? No one, and we'd better get used to it."

"We'd better get used to it." But I suppose it goes against the coping needs of human nature to accept that the blame for some bad things just can't be assigned.

In "Blowup," Gladwell examines the cases of the explosion of the Challenger space shuttle in 1986 and the near-disaster at the Three Mile Island nuclear power plant in 1979 to illustrate that big "accidents" don't always have clear causes—that they may in fact be inherent in high-complexity systems.

The near-meltdown at Three Mile Island mirrors and provides good perspective on the meltdown we saw in the financial system:

Here…was a major accident caused by five discrete events. There is no way the engineers in the control room could have known about any of them. No glaring errors or spectacularly bad decisions were made that exacerbated those events. And all the malfunctions—the blocked polisher, the shut valves, the obscured indicator, the faulty relief valve, and the broken gauge—were in themselves so trivial that individually they would have created no more than a nuisance. What caused the accident was the way minor events unexpectedly interacted to create a major problem.

That is not to imply that bad decisions and glaring errors were not made during the financial crisis—surely they were—but these specific instances of fraud and other breaches of the rules did not cause our problems. Our "modern-day" Three Mile Island was the result of the same unexpected convergence of the effects of disparate situations—brought about by people acting rationally and without malice—in an extremely complex system. The government had kept interest rates too low for too long; rising property values encouraged mortgage terms that allowed traditionally risky borrowers to own a home; investment banks, ratings agencies, investors and regulators alike did not understand the risk in certain pools of assets; mark-to-market accounting rules facilitated a downward spiral in banks' capital positions; and the list goes on. Congress, the Obama Administration and the media continue to channel public anger to Wall Street (therein, by the way, one can see clearly the exploitation of a scapegoat—the amorphous idea of "Wall Street" is used just as, in other times, the amorphous concept of "The Jews" may have been), how in the world can we cast blame for a systemic problem?

Paraphrasing sociologist Charles Perrow, Gladwell writes:

Modern systems…are made up of thousands of parts, all of which interrelate in ways that are impossible to anticipate. Given that complexity…it is almost inevitable that some combinations of minor failures will eventually amount to something catastrophic.

We unfortunately encountered such a catastrophe just about two years ago.

Gladwell also quotes an analysis of the Challenger situation (in which a rubber O-ring on the casing of a rocket booster failed to seal in the hot gasses during launch), which concludes:

It can truly be said that the Challenger launch decision was a rule-based decision…but the cultural understandings, rules, procedures, and norms that always had worked in the past did not work this time. It was not amorally calculating managers violating rules that were responsible for the tragedy. It was conformity.

The responsibility for the decision to launch still lies with the organization; however, although there was surely a great deal of finger-pointing in the incident's aftermath, in the end it was the system (that is, the design of the organization) that needed to be changed. Like the NASA employees on the Challenger launch, who acted as would be expected leading up to the unfortunate end result, the "sub-prime" borrower seeking a home, the mortgage salesperson, the investment banking analyst, the Federal Open Market Committee member all acted as one would expect (again, barring the specific cases of misconduct). They did not fail. The system failed.

Of this kind of disaster, Gladwell said, "We'd better get used to it."

But perhaps we don't have to be so complacent. Let's stop the tantrum and the finger-pointing and try to make the system better. Let's prosecute those instances of misconduct, but let's not project blame where it does not belong. The challenge and the opportunity we face represent something profoundly important, and we owe it to ourselves to be thoughtful.

To that end, Michael Watkins is furthering the conversation on "systems leadership" here and here at HBR. In what situations have you seen effective leadership of complex systems?

Photo credit: Matthew Simantov

Just watch Hans Rosling's fascinating presentation to the State Department last June (below), and you don't have to be a development economist or a public health statistician to see that the World Bank's new open data initiative has great potential. Today, the Bank gave the world unrestricted access to much of its global economic and development data, allowing brighter minds than this one—the Hans Roslings of the world—to peer in with an outside perspective and to mine it for new insight. Rosling himself sent a tweet today hailing the "liberation" of the Bank's statistics and calling for the IMF, OECD and UN agencies to follow suit.

Watch the video below and visit www.gapminder.org to check out the interactive tool you'll see in the presentation.

For the past few days, the erupting Icelandic volcano with the best name ever has shut down all air travel to and from northern Europe, stranding, among millions of others, the community of change agents who were gathered in London for the 2010 Skoll World Forum. Eyjafjallajökull gave them a blank whiteboard—they gave us TEDxVolcano.

I guess it's just what happens when hundreds of people from the leading edges of social change are plucked from their various paths and dropped into the same city for a few days of unplanned, tangential time. In thirty-six hours, an impromptu team of individuals and organizations assembled a TEDx event, which they hosted and live-streamed today, Sunday evening London time.

The event was intimate but featured rockstars of the social change community. Cara Mertes, Head of Documentaries for Sundance, described the volcano-related situation we are now facing as a fortunate, indeed a miraculous, "sneak preview" into the future, when the natural world becomes out-of-sync with human society due to climate change. This preview is fortunate, she said, in that it can help us learn, and miraculous in that it is peaceful—which may not be the case when we must deal with the real thing. Matthew Bishop, author of Philanthrocapitalism and U.S. Business Editor / New York Bureau Chief at The Economist, talked about how some have failed to see that the paradigm has changed since the financial meltdown of 2008, and how that prevents them from seeing that doors that had been closed are now open. He also argued for a focus on the "enabling problem"—one that will help us solve many others—by ensuring that the media plays its proper role in improving the quality of public debate, rather than polarizing issues and turning important discussions into simplistic shouting, as it often does. Nathaniel Whittemore, the catalyst for TEDxVolcano, described the event as an illustration of the power of "Why not?", pointing out that when enough people come together saying "Why not?" it becomes a "Hell yes!" He will surely write about the event, so be sure to check out reflections on his blog as well. TED's June Cohen did a wonderful job as host.

It is pretty awesome that this group of people planned, hosted and streamed this event in a weekend. Thank you!

View a recording of TEDxVolcano below:

I'm no Einstein. But it turns out we share something in common.

I remember spending long nights, back at school, struggling through practice cases with my business case competition team. In addressing those complex, hopelessly unstructured problems, it felt like we were fighting through tangled conceptual jungle, often aimlessly, just searching for something by which to be oriented. With the vines and branches in our faces, it was a real effort just to take the next step, let alone to understand if we were following the right path. Those nights, when we were trying to make sense of those cases, I remember it helping to stand up and move from where I was sitting, perhaps in front of the whiteboard in the empty classrooms in which we often worked, to sit away from the group at the other end of the room. It didn't matter where I went, really, but it mattered that I moved. The challenge was still the same and I had no new information, but placing myself in a different physical context helped me to arrive at a different conceptual vantage point in relation to our problem.

Now, I wasn't deriving the theory of relativity by any stretch of the imagination, but I recently heard an interesting argument using Albert Einstein as an example to explain the power of having a different perspective, and it helped me to understand why my quirky change of location helped in solving big problems. Author Jonas Lehrer, in a recent PopTech video, argues that, had Einstein not been kept outside of the core academic circles of his day (as a Jew, the argument goes, he was relegated to being a patent clerk instead of entering into a tenure track at a prestigious university), he may not have reached the revolutionary understandings of our universe that he did. Being an outsider, Lehrer says, let Einstein think outside of the box.

Interesting thought? Yep. Revolutionary idea itself? Not really. But the more it settles in, the more I begin to really appreciate it. And the more I begin to see that our future progress will rely on it (just as, apparently, our progress thus far has relied on it).

Indeed, some social profit organizations root their change efforts in this principle of new perspectives. I used to intern with a small outfit of amazing people who did this. This group shares with facilitators around the world a symposium that helps people examine the unexamined assumptions which underlie so much of what we do. The symposium helps people reflect on questions like when we say we throw something away, where is "away"? The experience is an awakening, they say, which helps people make more enlightened decisions through new perspectives on day-to-day assumptions.

I have been reading the book What the Dog Saw, written by Malcolm Gladwell (and delivered by Santa), and I notice the same principle at work. The book is a selection of pieces that Gladwell wrote for The New Yorker, all of which (at least through page 198) show that the genius in his storytelling lies in helping the reader look at something mundane from a new angle—from outside the framework of the day-to-day. Though "Million-Dollar Murray" is not my favorite piece (I like most, so far, the one after which the book is titled), it's another good example of this idea at work in a situation with social value implications. In this piece, Gladwell helps us look at homelessness and its societal cost from a vantage point much different from our daily encounters. Through the novel perspectives in this piece and others, Gladwell nudges us to reach for and take the mental freedom to explore possibilities.

It is this principle that also gives power to those inspiring quotes which we put below serene photos or on Facebook pages or on post-it notes stuck to computer monitors. These quotes give us the freedom to think big by elegantly showing us another way to look at the mundane. For example, to quote none other than Mr. Einstein: "The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing." This thought throws open a door to new horizons of possibilities if we were to, say, think beyond the idea of evil as pertaining to those who perpetrate it and instead to the idea of evil existing because of the failure of a collective response by the world to overwhelm it. Evil, from this perspective, pertains to all of us, rather than to certain individuals.

In writing this post, I realized that what I like about my favorite quote (below) is precisely that it challenges me to contemplate what may be on the other side of the walls of my own box.

"And those who were seen dancing were thought to be insane by those who could not hear the music." – Friedrich Nietzsche

So this principle, I'm realizing, really is commonplace itself. But, like Einstein, I'm now viewing it from a different perspective—and I'm taking Gladwell's cue to look upward and embrace the mental freedom to explore.

Photo credit: tom.hensel

In June of last year, for example, Twitter was instrumental in allowing protesters after the Iranian election to remain in communication with the world in the face of repressive retaliation from the Ahmadinejad government. This past January, it helped to share stories, images and messages in the aftermath of the earthquake in Haiti, and played an important role in rallying the world to send $10 million in text-message relief donations in three days.

On a day-to-day basis, Twitter is a very effective way to discover great content (whether news articles, blog posts, videos or other resources). In fact, it's one of the most effective ways, I have found, when used in the right way. Twitter has far transcended its stigma, for me, by pointing me to horizon-expanding and thought-provoking ideas and resources.

1. Use FreeMyFeed.com to "unlock" the stream of tweets you collect from those you follow. (On your Twitter home page, click "RSS feed" on the right sidebar and log in. The RSS feed URL to which you are directed is the feed you need to unlock using FreeMyFeed.)
2. Then use feedmyinbox.com to have your tweets emailed to you on a daily basis. Simple as that.

Enjoy!

It's definitely a bold move, one that stands to raise the bar on sustainability and transparency, empowering both retailers and consumers to leverage their buying power to affect change. It stands to spur innovation in products and processes. And it appears to be around for the long haul. Walmart has gone well beyond talking the talk here. It's changing the game.

In physics, leverage is defined as the mechanical advantage gained from using a lever. In business, it means using a proportionately small initial investment to gain a high return.

In the three cases I describe above, the massive investment these companies have made in business excellence presents us with a unique situation: great social value can be created with a relatively small incremental investment. These companies are, in this sense, leveraging their competencies for social good.