The Good, The Bad, The Uncertain

Humans have designed and built a powerful combination of government, non-profit, and commercial organizations to produce a wide variety of products, services, jobs, and wealth, enhancing the lives of customers, employees, investors, and citizens. Business creates the wealth that the government and non-profit organizations use to address various social needs. This is not a one-way transfer of resources. The wealth passed to government and non-profit organizations is spent on employing people, who then spend money to purchase products and services from businesses. In addition, taxes and donations are also used to buy products and services from businesses to support government and non-profit missions. 

Unfortunately, these organizations often fail to live up to their potential, sometimes create more problems than they solve, and are poorly designed for the dynamic, occasionally chaotic world in which we live today. Our power to shape the world to our will for our purposes has increased substantially over the past two centuries, leading some earth scientists to label this geological era the Anthropocene. The good news is that we are, by far, the most intelligent species on the planet, and our knowledge and the associated power have increased dramatically over the past 2,500 years. Humans designed every organization that exists today and can redesign them to create sustainable value for all stakeholders. 

The Best of Times

Over the last three centuries, advancements in science, technology, and economic systems have substantially improved many aspects of human life, including wealth, health, and education. The commercialization of science made the first Industrial Revolution possible, fundamentally changing our ability to create wealth (Pinker, 2018). These changes have led to an astonishing increase in the average annual gross domestic product (GDP) per person, from less than $1,200 in 1820 to over $16,000 per person in 2022. Most of that improvement occurred in the last 70 years, since 1950, when GDP was approximately $3,360 per person (Our World in Data). 

Over the same period, poverty worldwide decreased from over 80% of the population living in extreme poverty to less than 9% today. Again, half of that improvement has occurred in the last 70 years. This has resulted in numerous improvements to our health, including better nutrition, access to clean water and sanitation, reduced child mortality, vaccinations, and increased life expectancy. The average life expectancy has more than doubled over the past century, from 32 years in 1900 to over 73 years in 2023 (Our World in Data). 

These benefits create a virtuous reinforcing loop: as human capability increases, we learn more about what works and what doesn’t under what conditions, thereby further improving economic growth. Given our modern conveniences, including plumbing, heating, air conditioning, a variety of food options, overnight delivery, transportation, smartphones, etc., many people today live better than kings did 200 years ago. For most people, there has never been a better time to be alive. Unfortunately, many of the methods we have invented to improve the human condition have also produced unintended side effects, limiting our ability to make further progress or, in some cases, making it difficult even to maintain the gains.   

Unintended Consequences

The methods that we designed to produce astonishing progress also created undesirable economic, societal, and environmental consequences, some of which we are only now becoming aware of. The distance in time and space between cause and effect impedes our ability to recognize the connections between our design decisions and actions and the longer-term, often unexpected outcomes. 

What started as the quest to create rational organizations led, in many cases, to unnecessarily slow and costly bureaucratic systems—the opposite of what is needed in a rapidly changing and uncertain world. In 2008, the mortgage-finance system in the United States proved unable to identify and correct inherent design flaws, leading to government intervention to avoid total collapse (Latham, 2009). Our approach to global trade has led to long, complex, and fragile supply chains that lack resilience, as evidenced by their performance during the recent COVID-19 pandemic. In addition, economic and human progress have been uneven among countries, creating inequities and tensions that have led to pressures to reform systems and institutions (Hoffman, 2025). 

When our ancestors built our industrial, agricultural, and global trade systems, they chose energy sources to power facilities, production, and transportation methods based on practical considerations such as cost, availability, and technical characteristics. The impact of carbon dioxide (CO2) in the atmosphere on climate was seldom, if ever, a factor in decisions. The level of CO2⁠ in the atmosphere passed a global “sustainable” level of 350 parts per million (ppm) in about 1985. It is currently over 420 ppm (Our World in Data). The rate of temperature rise is accelerating, as are the associated costs (Hansen et al. 2025). 

Many things that begin with good intentions and innovations often end with more problems than they initially solved. Some governments and economies around the world do not account for all the costs associated with doing business, including environmental costs and the costs of climate change. Consequently, part of the dramatic increase in GDP is overestimated as it doesn’t include the ecological debt that will come due in future generations. 

Uncertain Future

Leaders today face a dynamic and ambiguous world characterized by rapid and frequently unpredictable changes in the political, economic, technological, natural, societal, legal, regulatory, and competitive environments. 

Many of the institutions that once provided a level of certainty for organizations are now being degraded and destroyed, creating unprecedented uncertainty in countries of all types around the world. The undoing of old and creation of new policies, laws, and regulations is changing the rules of the game for many organizations. Economic uncertainty, stemming from changing trade policies, high levels of government debt, and fluctuating exchange rates, makes strategy and decision-making difficult at best and, in many cases, results in paralysis and inaction. 

While artificial intelligence (AI) and other technology advances hold immense potential to address various challenges, including productivity, health, and climate change, among others, they also present numerous dilemmas and ethical considerations. A recent book titled “Proximity” has captured some of the related technological developments in miniaturation, customization, and localization (Wolcott & Krippendorff, 2024). Technology advances offer many opportunities to rethink how we organize and lead people to achieve common goals and objectives. 

The damage to business, real property, and life due to natural disasters, along with the associated costs of addressing climate change, has created additional material risks for investors and challenges for leaders. These material risks of climate change, biodiversity loss, and other environmental issues also threaten our ability to create wealth. The interrelated nature of these issues underscores the need to continually reinvent our leadership and management methods to capitalize on opportunities and mitigate threats. 

The Design Challenge 

Organizations today are often poorly designed, outdated, and ill-prepared to survive, let alone thrive, in the modern environment (Latham, 2013). A key organizational design question becomes, how can we maintain the advances we have made and make even more progress while eliminating or mitigating undesirable and unintended consequences? We have strong evidence that it is possible to redesign our methods to provide the benefits while reducing the unwanted side effects. 

Many wealthy countries have demonstrated that we can change our designs to decouple GDP from CO2 emissions (Our World in Data). There are numerous examples of how organizations have redesigned their methods not only to produce less CO2 but also to reduce costs, making a net positive contribution to their bottom line (Polman & Winston, 2021). For example, Interface, a US-based global carpet manufacturer, increased its market share and financial performance while reducing its environmental impact (Anderson, 1998). 

The organization is one of the most significant inventions in human history, enabling large numbers of people to accomplish things that no individual could do alone. According to Harari (2018), our ability to organize and direct the actions of large numbers of humans toward a common purpose and goals is what distinguishes us from all other species. Organizations are the vehicles we use to leverage science, technology, and the economic system to create and capture wealth. The challenge is to design organizations that are profitable, scalable, flexible, and resilient while creating a net positive value for multiple stakeholders. This requires a systems approach based on empirical evidence, imagination, and continuous learning and redesign. The Organization Design Studio^® is a digital support system that provides frameworks, methods, tools, and techniques to help leaders design organizations that thrive today and in the future.   

References

Anderson, R. C. (1998). Mid-course correction—Toward a sustainable enterprise: The Interface Model. Chelsea Green.

Hansen, J. E., Kharecha, P., Sato, M., Tselioudis, G., Kelly, J., Bauer, S. E., Ruedy, R., Jeong, E., Jin, Q., Rignot, E., Velicogna, I., Schoeberl, M. R., Von Schuckmann, K., Amponsem, J., Cao, J., Keskinen, A., Li, J., & Pokela, A. (2025). Global Warming Has Accelerated: Are the United Nations and the Public Well-Informed? Environment: Science and Policy for Sustainable Development, 67(1), 6–44. https://doi.org/10.1080/00139157.2025.2434494 

Harari, Y. N. (2018). Sapiens: A brief history of humankind (First Harper Perennial edition). Harper Perennial.

Hoffman, A. J. (2025). Business school and the noble purpose of the market: Correcting the systemic failures of shareholder capitalism. Stanford Business Books, an imprint of Stanford University Press. 

Latham, J. R. (2013). How much does your organization weigh? Innovation 32(2). https://drjohnlatham.com/2013/06/01/how-much-does-your-organization-weigh/ 

Latham, J. R. (2009). Complex system design: Creating sustainable change in the mortgage-finance system. Quality Management Journal, 16(3), 19-25. https://doi.org/10.1080/10686967.2009.11918235 

Our World in Data https://ourworldindata.org/ 

Our World in Data - World GDP per capita https://ourworldindata.org/grapher/gdp-per-capita-maddison-project-database?tab=chart&country=~OWID_WRL 

Our World in Data - Share of population living in extreme poverty https://ourworldindata.org/grapher/share-of-population-living-in-extreme-poverty-cost-of-basic-needs 

Our World in Data - Life Expectancy https://ourworldindata.org/grapher/life-expectancy 

Our World in Data - GDP and Human Development https://ourworldindata.org/grapher/human-development-index-vs-gdp-per-capita 

Our World in Data - Uneven Progress https://ourworldindata.org/grapher/gdp-per-capita-worldbank 

Our World in Data - CO2 Emissions vs. GDP https://ourworldindata.org/grapher/co2-emissions-vs-gdp 

Our World in Data - Total CO2 in Atmosphere ​​https://ourworldindata.org/grapher/global-co2-concentration 

Our World in Data - Average Temperature https://ourworldindata.org/grapher/temperature-anomaly 

Our World in Data - Decoupling CO2 from GDP https://ourworldindata.org/grapher/co2-emissions-and-gdp 

Pinker, S. (2018). Enlightenment now: The case for reason, science, humanism, and progress. Penguin Books. 

Polman, P., & Winston, A. S. (2021). Net positive: How courageous companies thrive by giving more than they take. Harvard Business Review Press.

Wolcott, R. C., & Krippendorff, K. (2024). Proximity: How coming breakthroughs in just-in-time transform business, society, and daily life. Columbia University Press.