Leading through the Fog of Exponential Change
Leading through the Fog of Exponential Change
A recent ARK Invest white paper, Platforms of Innovation: How Converging Technologies Should Propel a Step Change in Economic Growth, highlights the speed at which exponential technologies are reshaping economies, markets, and society. According to the paper, neural networks exert the most catalytic impact on other technologies by driving convergence and accelerating breakthroughs. Neural network developments are advancing faster than most observers expect, with some forecasts placing the attainment of Artificial General Intelligence (AGI) between 2026 and 2030.[1] This short timeline introduces unprecedented uncertainty and complexity for organizations, challenging leaders to navigate through waves of creative destruction while maintaining organizational stability and growth.
Exacerbating this challenge, humans often default to mental shortcuts forged by experience — an experience that may no longer apply in radically altered contexts. In Thinking, Fast and Slow, Daniel Kahneman explains how our intuitive, fast-thinking System 1 interacts with a slower, more analytical System 2, leading us to rely on heuristics that introduce predictable biases.[2] These blind spots make people prone to misjudging large numbers, probabilities, and fast-evolving shifts, often underestimating the impact of exponential technologies.
The solution? Leaders must adopt the mindsets and skills faced by successful battlefield commanders who have mastered the art of thriving in uncertainty.
“War is the realm of uncertainty; three-quarters of the factors on which action in war is based are wrapped in a fog of greater or lesser uncertainty.”[3]
Carl von Clausewitz — the 19th-century Prussian general — devoted an entire chapter of On War to “Military Genius,” which he saw as the synergy of several core qualities: courage, coup d’œil (intellect/quick insight), presence of mind, and strength of character. Although forged on the battlefield, these traits apply just as strongly to executives and managers navigating exponential disruption. Like generals in the “fog of war,” business leaders often face ambiguous data, a rapidly evolving competitive landscape, and high-stakes decisions.
In Clausewitz’s analysis, “friction” and “fog” describe how confusion and partial information cloud judgment. Modern enterprises now confront an analogous “fog” of accelerating technologies, shifting regulations, and volatile market dynamics. Clausewitz’s insights, therefore, illuminate the path for decisive, resilient leadership under ambiguity.
COURAGE: MORAL FORTITUDE UNDER PRESSURE
Clausewitz distinguished between physical courage and moral courage. Moral courage involves accepting responsibility for difficult decisions, resisting outside pressures, and standing firm in the face of criticism.[4] Modern leadership requires the moral fortitude to challenge successful past practices and resist organizational inertia. Leaders must set bold visions that challenge entrenched interests and traditional paradigms of success. This includes accepting calculated risks, putting reputations on the line, and resisting pressure from boards, investors, and even their organizations. In today’s rapidly evolving landscape, playing it safe represents the riskiest strategy.
QUICK INSIGHT: SEEING THROUGH COMPLEXITY
Under the umbrella of “intellect,” Clausewitz emphasized coup d’œil — the quick, penetrating understanding of complex situations.[5] For modern leaders, this is about swiftly discerning underlying market dynamics and potential opportunities despite incomplete data. Leaders can develop their insight by:
Employing first-principles thinking, breaking complex problems into their most fundamental elements. This approach enables leaders to question basic assumptions and identify when changing conditions invalidate traditional business models.
Cultivating Knowledge Through Diverse Reading: Studying emerging technologies, societal trends, and history provides perspective. This involves maintaining diverse knowledge sources across books, newsletters, podcasts, and academic research. As retired Marine General James Mattis noted, reading provides leaders with historical context and proven solutions, preventing them from being “caught flat-footed” by new challenges.
Using Generative AI to Accelerate Learning: Understandably, time is precious for busy executives and managers. A powerful technique for quickly gaining knowledge is what Michael Simmons calls “Augment Reading.”[6] Leaders can accelerate reading and knowledge acquisition by 10X by leveraging generative AI. They can prompt their preferred Gen AI tool to:
Develop a list of the top recommended books by reputable sources on emerging technology and societal change. And why it chose the selection.
Create summaries of each highlighting key points and recommend articles, TED Talks, Interviews, or YouTube videos on each work.
Provide an additional curated list of influencers or podcasts to follow on similar topics
For each work, provide counterarguments with the cited sources.
Design, customized learning paths for key topics.
Analyze how emerging changes could affect fundamental business assumptions in my industry.
Regular contemplation and discussions with other executives can help synthesize knowledge into actionable insights. Setting aside and prioritizing 60 minutes weekly for strategic discussions among key leaders will significantly enhance collective insight and understanding.
PRESENCE OF MIND: MAINTAINING CLARITY AMID CHAOS
Clausewitz paired quick insight with the presence of mind to act decisively under stress. A sensitive and discriminating judgment that combines intuition with the determination to make calls despite uncertainty. A wit that demonstrates resourcefulness with a steady nerve.[7] Such wit requires discernment with strategic foresight to make decisions despite incomplete information and rapidly evolving circumstances. It requires developing a combination of analytical thinking and refined instinct that enables effective decision-making in uncertain conditions.
Strategic thinking exercises like scenario planning and war gaming the future help leaders rehearse potential futures and develop this discriminating judgment. Peter Schwartz defines scenario planning in The Art of the Long View as “a disciplined method for imagining a range of plausible futures in which today’s decisions might be played out.”[8] This preparation fosters quicker action and more confident decision-making when disruption arrives. Generative AI further streamlines this process by:
Identifying Key Signals: Prompt the AI to list emergent trends that affect your business (e.g., regulation, consumer behavior, economic shifts).
Crafting Alternate Futures: Prompt the AI to generate three to five scenarios, from minimal change to paradigm shift.
Assessing Strategic Impacts: Prompt the AI to analyze possible outcomes for your market, competitive landscape, and operations. (In a follow-on article I will delve into how to prompt Gen AI best to generate realistic plausible scenarios)
These steps do not predict the future nor aim to give definite paths forward but stimulate discussion to “warm up” the thinking so you can act decisively when external changes materialize. Leaders should integrate scenario planning into their regular strategic processes. Do not treat it as an occasional event or mere formality but as an ongoing practice of questioning assumptions and testing strategies.
STRENGTH OF CHARACTER: THE WILL TO PERSEVERE
Finally, Clausewitz emphasized strength of character — the resolve to persist despite adversity, pushback, or daunting risks. Equally important is the ability to master one’s emotions under the stress and confusion of uncertainty. This combination of mental fortitude, conviction, stability, and steady presence enables leaders to persevere and discover the path forward, even when facing significant setbacks.
Business parallels abound. Leaders face market volatility, stakeholder tensions, and short-term performance pressures that test their conviction. Maintaining clarity and resolve through corporate “fog” demands the same depth of character Clausewitz lauded in great commanders.
As we navigate the exponential age, leaders who cultivate Clausewitz’s courage, quick insight, presence of mind, and resolve — combined with continuous learning, first-principles thinking, and scenario planning — will thrive. They will foster innovation, anticipate future trends, and make strategic decisions that ensure long-term success in a volatile marketplace.
The question for today’s executives: How will you build and apply these qualities to lead your organization through the fog of exponential change?
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[1] ARK Invest. (2023). Platforms of innovation: How converging technologies should propel a step change in economic growth [White paper]. ARK Investment Management LLC. https://ark-invest.com
[2] Kahneman, D. (2011). Thinking, fast and slow. Farrar, Straus and Giroux.
[3] Clausewitz, C. V. (1976). On war (M. Howard & P. Paret, Eds. and Trans.). Princeton University Press. (Original work published 1832–1834. See Book 3, Chapter 6, p. 101.)
[4] (Clausewitz, 1832–1834/1976, p. 101)
[5] (Clausewitz, 1832–1834/1976, p. 102)
[6] Simons, M. (n.d.). Augmented reading: Learn 10x faster (and better) [Blog post]. Retrieved from https://blockbuster.thoughtleader.school/p/augmented-reading-learn-10x-faster-and-better
[7] (Clausewitz, 1832–1834/1976, p. 103)
[8] Schwartz: Original publication year is often cited as 1991 (sometimes 1996 in later printings).
[9] (Clausewitz, 1832–1834/1976, p. 105–107)