Interconnectedness: A Practical Guide for Today’s Leaders and Managers, Our 200th Issue
Issue 200, February 20, 2025
Welcome to the 200th issue of 2040’s Ideas and Innovations Newsletter. We thank you for your readership for nearly four years and your feedback that the themes and content resonate and help you. You inspire us to always move forward. All our newsletters are available on SubStack. If you know others who would benefit, please share our publication with them.
Connected and Networked
As we often do, we seek to demonstrate how interconnected we all are and how our organizations are connected and interdependent on their marketplaces. We remind our clients that even seemingly benign factors and variables have an impact and influence across our societal systems. This week’s theme is no different. We started the year raising awareness of uncertainty becoming more of the norm. Navigating uncertainty requires understanding how connected and dependent everything is.
Last year we wrote about the influence and impact of dominant tech companies on global organizations in Are We Playing Monopoly as a Society? We built on that theme by recognizing the importance of systems thinking and awareness in our essays on Dynamics at Play: How to Leverage Determinants and How to Navigate the Currents of Change: Trends, Shifts and Cycles.
Despite a larger conversation about a desire to shelter in place, limit borders or break down international partnerships, organizations must be realistic and mindful to recognize the interdependencies in a highly connected and interdependent world.
So, with the current unpredictable economic, geopolitical and societal onslaught of change, we are keenly focused on inspiring all leaders to deepen their strategic and tactical thinking as they manage change, adapt and transform. Our newsletters have invited reflection on the human factor in decision-making in uncertain times. We are advocates of confronting cognitive biases, how we measure risk, and the failure to recognize the necessity of workforce communication in organizational transitions. The human factor is both the strongest and weakest link in operating in a complex interconnected marketplace. Understanding the interconnections is the first step to leading a workforce to thrive, professionally and personally.
The Connected Network Effect
We want to raise the importance of recognizing the intricate interplay between economic and societal systems and how they profoundly influence organizational strategic decision-making, change and transformation.
In a practical sense, humans and their societies are all connected and interdependent. In a metaphorical chain reaction, when something happens to, or is changed by someone or a group, there are consequential influences and impacts on others. Consider the common cold as a simple example. When a family member catches a cold, the rest of the family often catches the virus, and it can cascade to infecting work colleagues and friends. We saw this dramatically in the pandemic; systems were intricately connected and disrupted from healthcare and retail operations to education, the workplace and social organizations. Everything was connected. These connections are almost always hidden in plain sight until they are recognized and the pieces are connected. The emerging Bird Flu crisis is another case in point.
Navigating the Polycrisis: Understanding Interconnected Global Challenges
It is becoming increasingly clear that we are experiencing a global polycrisis; a situation where multiple crises interact and worsen each other, creating a multitude of difficult situations to manage. A polycrisis is, by definition, triggered by a connected network.
Polycrisis was originally coined by French philosopher and sociologist Edgar Morin in 1993 when he described a complex situation where multiple, interconnected crises converge and amplify each other, resulting in a predicament that is difficult to manage or resolve. Unlike single crises that may have clearer causes and solutions, a polycrisis involves overlapping and interdependent issues, making it a more pervasive and enduring state of instability. This concept reflects growing concerns about the sustainability and viability of contemporary socio-economic, political, and ecological systems. (Wikipedia)
Although the term was first introduced in the 1990s, it experienced a renaissance in the 2020s to refer to the effects of the pandemic, war, surging debt levels, inflation, climate change, resource depletion, growing inequality, artificial intelligence and synthetic biology, and democratic backsliding.
Simply stated, a polycrisis is a situation where the whole is more dangerous than the sum of its parts. Globalization, as an expanding network, continues to deepen the interconnections among markets, industries, and societal systems. Organizations that view challenges in isolation are on a fool’s errand. Today’s reality demands an understanding of how multiple crises interact and amplify each other, creating a complex web of challenges that can only be addressed through systemic, critical thinking and integrated approaches and solutions.
Although the global polycrisis may feel remote to many organizational leaders, everything is connected and they must recognize the larger implications of their decisions. Many of our organization and association clients are international with customers, clients and shareholders across borders. Tactical actions, strategies, missions and goals have far-reaching influence and impact in their larger global ecosystems. Understanding interconnected dynamics is crucial for navigating change effectively and ensuring long-term success in our increasingly complex global environment, not to mention thriving in a polycrisis market climate.
The Symbiotic Relationship Between Economics and Society
Similar to the interconnected challenges of a global polycrisis, local and national economic and societal systems are deeply intertwined, each shaping and reshaping the other. Economic policies and market dynamics influence behaviors and societal values, and cultural shifts drive economic and technological trends. This give and take is magnified when operationalized on a global scale.
Consider the hype around AI’s promise and the resulting confusion on how to apply AI. The dilemma is how to assess its value correlated to the level of investment. DeepSeek, China’s large language AI model, unhinged the tech community. As widely reported, it built and delivered AI at a fraction of the cost of its American cousins. The domino effect has been to question the US dominance of AI, reassess AI’s market value, determine its applicability to organizational operations, understand the real costs of developing and operating AI, and identify the energy required to develop and operate it.
Another example is the semiconductor shortage during the pandemic that brought into the spotlight the fragility of global supply chains. This led to strategic shifts to localized production and resilience planning, forcing organizations worldwide to rethink their dependencies on specific offshore regions. Supply chain issues several years later continue to impact organizations and customers alike.
Market dynamics, including technological advancements, globalization, and changing consumer preferences, are catalysts for organizational change and transformation. If organizations are idle and unresponsive to changes, they will soon become laggard followers who are quickly overtaken by those much more agile and highly tuned into larger systems.
The bottom line? Organizations must not be isolationists in their thinking and should be nimble to adapt their strategies and operations to stay relevant in an increasingly interconnected global economy. We may all have a desire to hunker down and isolate, but isolationism ignores that regardless of opinion, desire or want, connections do exist.
Isolationism may be a preference, but it is not a reality in a globally connected economy. In 2025 China is now the world’s second largest economy and is quickly catching up to the US in its technological advancements. Historically, it once embraced the strategy of isolationism. That strategy resulted in its disconnect from trade, national stagnation in innovation and gradually over a few hundred years, regression as a once-leading society and country. It became a target for others, including the British and Japanese to conquer. China in today’s terms has recognized the interconnectedness of the world and the necessity to be a part of the larger system for its own continuation and success.
Global Risk Assessment: A Critical Leadership Imperative
So, what are some practical guidelines to help leaders develop comprehensive risk assessment frameworks to prosper in our interconnected global marketplace? The first step is to identify the key risks, including geopolitical, financial, environmental and security.
Geopolitical Dynamics
Rising tensions between major powers and the impact on global trade
Regional conflicts affecting supply chains and market access
Shifting alliances and their influence on business partnerships
Trade policy changes and their ripple effects
Political instability in key markets
Financial Market Volatility
Currency fluctuations affecting global operations
Interest rate changes across different regions
Investment flow patterns between markets
Global debt levels and their systemic risks
Cross-border transaction complexities
Environmental Considerations
Climate change impacts on operations and supply chains
Natural resource scarcity and its business implications
Environmental regulations across jurisdictions, local, national and international
Sustainability requirements in different markets
Carbon pricing and emissions trading schemes
Digital Security
Cybersecurity threats in an interconnected world
Data protection requirements across regions
Digital infrastructure resilience
Intellectual property protection globally
Technology dependency risks
Cultural Intelligence: The New Leadership Essential
In addition to risk assessment, cultural intelligence is the foundation for leading in a complex, polycrisis environment. Traditional command-and-control leadership models are becoming obsolete in a world where cross-border collaboration and rapid adaptation are essential. Leaders today must exhibit adaptability, emotional intelligence, and systems thinking to navigate interconnected challenges.
How to build a resilient future operating in an interconnected world requires, first, developing comprehensive risk management strategies. Technology is essential for high performance and investing in the right technological capabilities is table stakes. However, Axios reports that the pace of AI adoption won’t solely be determined by how fast the technology itself advances, but also by the willingness of businesses and individuals to use it. Edelman’s latest research found that 72% of people in China trust AI, compared with just 32% in the United States.
Leading with cultural intelligence and engaging stakeholders effectively paves the way for transformation and change. Creating adaptive organizational structures promotes innovation and continuous learning. Cross-cultural, empathetic leadership skills embrace all stakeholders. Understanding cultural nuances in different markets helps to develop local market expertise, field appropriate communications, build trust across cultural boundaries and manage diverse global teams.
Stakeholders operate on multiple levels. Understanding how all stakeholder needs are interconnected demonstrates cultural intelligence. Balancing diverse stakeholder interests includes managing all investor expectations, working with local communities on meaningful engagement strategies and managing partner relationships.
Thriving in an Interconnected World
The organic interconnectedness of economic, geopolitical and societal systems necessitates organizations to approach transformation and strategic decision-making with a comprehensive, informed perspective. Successful organizations operate with robust strategies for long-term success. Organizational resilience has adaptive capabilities and flexible business models. Agile workforce strategies propel innovation and deliver a competitive advantage.
Success in 2025 and beyond requires leaders to understand and navigate the complex interplay of global risks, technological advancement, cultural dynamics, and stakeholder expectations. By embracing this complexity balanced with agility and adaptability, organizations can build resilience and achieve sustainable success in our interconnected world.
At 2040, we say upward and onward! Here’s to a resilient next four years!
Get “The Truth about Transformation”
The 2040 construct to change and transformation. What’s the biggest reason organizations fail? They don’t honor, respect, and acknowledge the human factor. We have compiled a playbook for organizations of all sizes to consider all the elements that comprise change and we have included some provocative case studies that illustrate how transformation can quickly derail.