Why Our Systems Fail and What We Can Do About It (March, 2018)
We’re at a breaking point—today’s systems are so complex that major crises are not only imminent, but more common than ever. And that goes for every industry, regardless of size or scope. Enter Chris Clearfield. In his hotly anticipated book Meltdown, he offers a groundbreaking investigation into how complexity causes failure in systems—and how we can prevent meltdowns, in both business and life.
“As technology advances, it brings an explosion of complexity and interdependence that can threaten our most critical systems and organizations in unforeseen ways. Meltdown is essential reading for anyone who seeks to understand these dangers and what can be done to address them.”— Martin Ford, Author of Rise of the Robots
Chris Clearfield is co-author of Meltdown: Why Our Systems Fail and What We Can Do About It (March 2018)—a frank, convincing guidebook to understanding how modern systems are vulnerable to collapse, and how we can learn to avoid disasters, both large and small, before they happen. The book explains the central paradox of progress: that as our systems become more capable of sustaining advanced technology and a mass population, they also become increasingly complex—and much less forgiving. Today, as actors within a web of dizzyingly complex networks—healthcare to travel, high finance to geopolitics, social media to our personal, domestic troubles—we are more likely to make errors. But these errors can, and will, lead to tremendous disasters, from bankruptcy and economic collapse to loss of life. Meltdown, written with András Tilcsik, shows us why our systems fail, explains the shared DNA connecting them all, and with great clarity, outlines solutions we can all use to prevent failures from occurring. It was the winner of the Financial Times/McKinsey Bracken Bower Prize for the best business proposal by an author or authors under 35.
Clearfield began his career as a derivatives trader at Jane Street, a New York-based quantitative trading firm, where he managed the risks that arise when people try to use extremely fast computers to make money. During the 2007–2008 financial crisis, he watched from his trading desk as Lehman Brothers collapsed and stock markets around the world unraveled. At the same time, he began to train as a pilot—and developed a very personal interest in avoiding catastrophic mistakes. He is the founder of System Logic, a research and consulting firm that helps organizations manage the risk of catastrophic failure. He also worked in Tokyo and Hong Kong, where he developed an appreciation for cultural influences on decision making. He has written about catastrophic failure, technology, and finance for The Guardian, Forbes, Project Syndicate, the Harvard Kennedy School Review, the popular science magazine Nautilus, the Harvard Business Review blog, and in a memo to the U.S. House of Representatives.
Clearfield is a licensed commercial pilot and a graduate of Harvard University, where he studied physics and biology. Before that, he spent two years at the North Carolina School of Science and Math, where he and two classmates, working with their physics teacher, discovered a long-searched-for pulsar in the remnants of an exploded star.
To be alive in the 21st century is to rely on countless systems—from electric grids to water treatment plants, transportation to satellite networks, healthcare to the law. But sometimes these systems fail us. And when they do, their incredible complexity makes them anything but forgiving. Even the smallest accidents can turn into massive disasters that lead to bankruptcy, imprisonment, economic collapse, and loss of life. To put it plainly: we’re vulnerable—and we can’t keep up. But we can be prepared—and we can change the way we make decisions, build teams, and react to adversity.
In this urgent keynote, Chris Clearfield breaks down why our systems are primed for failure, but offers practical solutions we can all employ to spot small errors before they become big failures. Audiences will learn why seemingly unrelated crises—BP’s oil spill, a social media gaffe at Starbucks, the Fukushima nuclear disaster—share DNA. Knowing the underlying causes between, say, Facebook’s mismanaged IPO, the Flint Water Crisis, and the Volkswagen Dieselgate scandal can help us grasp the paradox of modern vulnerability and, with guidance, teach us the power of simplicity, the value of outsiders, and the benefits of diversity as well as a set of powerful, practical decision tools that anyone can use.
Understanding high-stakes failure will also better prepare us for failure in everyday life—from bad hiring decisions to disastrous dinner parties—whether we’re managing a financial giant or simply trying to get the kids to school. Drawing upon organizational behavior, cognitive psychology, and original interviews, Clearfield offers an eye-opening and empowering talk, and a necessary path to confronting all of life’s new complexity.
From the global financial crisis to the Flash Crash, modern finance seems out of our control. Even after years of regulatory reform, we still have embarrassing failures like Nasdaq’s mishandling of the Facebook IPO and the collapse of Knight Capital (a case where a single employee’s carelessness cost the firm $500 million). Today, small changes in our systems reverberate with outsized effect; predictable behavior can suddenly, or spontaneously, blossom into unpredictability. To former derivatives trader Chris Clearfield, we’re on a path to increasingly frequent catastrophic failures in finance—and the true roots are in the complexity of our systems themselves. In this clear-eyed talk, he explains why we’re on the wrong track. To bring back stability to our markets, he argues, we need a radical new approach. New research shows why punishment doesn’t work. Rather than prosecuting firms, regulators and the financial sector need to work together to systematically collect data on near misses—and learn from our mistakes. We’re all affected by the financial system: our jobs and pensions, not to mention the entire economy, depend on it. With Clearfield, we can start to think critically about our systems—and realize “reasonable measures” are now no longer enough.
Today, you can’t escape headline-grabbing stories of professional wrongdoing. Corporate giants are increasingly making waves for shocking stories of scandal and deception—ethical breaches of trust that not only move billions of dollars, but ruin thousands of lives. Meanwhile, hackers can gain access to a laundry list of ‘secure’ devices: from ATMs and cash registers to new driverless cars, implanted medical devices, and the household objects powered by the Internet of Things.
To Meltdown author Chris Clearfield, these instances of unethical behavior aren’t due to rising criminality or fringe culprits. Instead, the sheer complexity of our systems—from financial reports to computer networks to dizzying bureaucracy—is creating new opportunities for unscrupulous actors to obfuscate, exploit loopholes, and hide their tracks. In this talk, Clearfield takes audiences on a tour of contemporary malpractice—Volkswagen Dieselgate, Wells Fargo’s fake account scandal, unscrupulous surgeons and rogue traders—to explain how organizational and technological complexity makes systems ripe for exploitation. Touching on security flaws in new, connected tech—think driverless cars or ‘smart’ household devices—or on the accounting schemes of corporate giants like Enron, Clearfield delivers much-needed solutions. These are ideas that will shatter common assumptions about how to lead—ideas that can help you avoid the ethical loopholes just waiting to be exploited in your organization.
Complexity is everyone’s problem. It’s time to address how it’s creating the perfect conditions in your organization for another worst-case scenario.