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CHAPTER 1

OF RICE GRAINS, WATER LILIES AND MOORE'S LAW

„The world is changed. I feel it in the water. I feel it in the earth. I smell it in the air. Much that once was is lost, for none now live who remember it.“

GALADRIEL

We are surrounded by constant change. Constant change drives development and without development there is no progress. Without constant change there would be no progress. Without constant change, there would be no intelligent life - even if it is sometimes hard to find. Change as we know it is evolutionary. It happens in many small steps over such large periods of time that we don't even notice the change. Mountains erode, continents drift - at two centimetres per year, this movement is not noticeable to humans in their lifetime. Yet it is there, unstoppable and constant.

From a human perspective, based on our horizon of experience, the continents have always been where they are today. Even if we ask our grandparents, they will confirm the existing structure as unchanged. That is why it is so difficult for us to accept that things are not unchanged and therefore not unchangeable. The theory of plate tectonics was not first formulated by Alfred Wegener in 1915 in his book The Origin of Continents and Oceans [1], but it was widely disseminated and made known to the world. Not to mention that it was aptly rejected and antagonised in scientific and intellectual society. People feared yet another crazy idea without any substance.

Barely 50 years earlier, in 1858, both Alfred Russel Wallace [2] and Charles Darwin [3] had published theories on biological evolution, which has been irrevocably linked to Darwin's name since 1859 with the publication of his magnum opus On the Origin of Species. Not only does the world change - so do all the creatures that live in it. And this change does not happen by chance - it is only based on random mutations of the genome. Evolution is controlled by natural selection and without a goal in mind, it strives for constant improvement. Because constant improvement increases the chances of survival of a species.

And some 60 years later, Richard Dawkins describes in his book "The Selfish Gene" [4] and the subsequent expansion "The Extended Phenotype" [5] that evolution is driven primarily by competitive situations and depends less on group selection. According to Dawkins, the expression of external traits is not only influenced by natural selection alone, i.e. the focus on survivability, but also by competitive situations within a species. He extends the biological phenotype to include the influences that life takes on its environment and adds these to the phenotype. Thus, it is not only the bushy tail that makes the beaver attractive, but also the size of the beaver’s lodge. This evolutionarily favours beavers that have both physical (perhaps character) traits and environmental traits. So influencing our environment influences our evolution.

So the world really is changing - geographically and evolutionarily Galadriel is right. But unfortunately no one is alive to remember what it was like when the world was markedly different. But socio-culturally and technologically, we are feeling the change ourselves - and not just in the water, the earth and the air, but in our immediate surroundings, at home. The changes in communications, the car and entertainment industries, the radical changes in medicine and computer technology are just a taste of what is to come. None of this existed when I was at school. Communication, knowledge sharing and "spending time together" worked completely differently in 1990 than in 2020, so I perceive a generation that behaves and does things radically differently than my generation did. And what does the Steampunk do now? S/he invokes his/her experiences and points to his/her successes to push through his/her concepts, ideas and ways of doing things. After all, what made him/her and his/her generation successful can't be bad and one would be well advised to follow his/her suggestions, advice and instructions. Precisely not.

Our environment has long since ceased to be just our cave, our house or the huge area we destroy for lignite mining, but also our social environment. Our massive impact on communication, availability of knowledge, cultural exchange and comparability also requires new strategies, new behaviours to be successful in this world. So new preferences are emerging - and whoever best serves these preferences will be evolutionarily more successful.The digital environment that we have created and that we increasingly link with our analogue environment, the analogue space, also influences our behaviour and thinking with increasing intensity. For younger generations, digital communication is on an equal footing with analogue communication. Asynchronous communication was first accepted only in letters, then in emails and now even in voice communication. I record my sentence, send it as a voice message and receive a spoken reply sometime later. This results in an asynchronous conversation - this term alone makes me shudder. But just because I don't like it, and maybe don't do it, doesn't mean it's not relevant. So the digital world is becoming increasingly linked, connected and inextricably integrated with the analogue world. The digital part of our environment obviously also influences our evolution.

Evolutionary change is steady and slow and is not perceived by us. When we dig up fossils or carry out DNA analyses, we can make evolution explainable and then also experienceable through models. Nevertheless, we cannot comprehend the drama of the five great mass extinctions - periods of millions of years are too abstract. Since Jurassic Park (1, 2, 3 as well as Jurassic World 1 and 2), every child knows that the dinosaurs died out some 65 million years ago. Too bad. The T-Rex was really cool. The Cretaceous period ended with the extinction of the dinosaurs - out of 2500 genera, 1100 became extinct and the mammals were able to make their rise after being subjugated by the big lizards. No one remembers that either. Because of the long periods of time, we perceive change as linear.

For thousands of years, humans have perceived change, if at all, as a slow, steady process that we can calmly get used to and then adapt too. If change happens too quickly, we can no longer keep up. If cultural change happens too quickly, defence mechanisms become active because we feel attacked in the values that have guided us so far. I am by no means suggesting that we have vigorously questioned these values and also examined their moral correctness. Value systems are the glue of a society - they by no means have to be morally impeccable or ethically clean. Although that would be very nice, of course.

The fact that women in Germany, mind you one of the leading industrial nations, at least still, have not had to take their husband's name since 1994 and that marital rape was exempt from punishment until 1997 is just as disconcerting as the fact that homosexuality was punishable until 1994 (64,000 people were sentenced under the so-called ‘gay paragraph’ §175 StGB) and that the state actually wanted to regulate something as simple as ‘being happy’. Oh yes - since November 2000, children have also had a right to non-violent upbringing under section 1631 of the Civil Code. This makes bringing up children under state orders much more time-consuming.

And today? Women no longer have to ask for permission if they want to take up a job. Fine. According to the Federal Statistical Office (Destatis), women in Germany earn on average 18.2% less than men on the occasion of Equal Pay Day on 10 March 2021, based on updated results of the Structure of Earnings Survey. Furthermore, the majority of interruptions in work in favour of raising children are taken by women. Whether this is wrong or right is debatable, but what is certainly wrong, if not downright stupid, is to practically deny the parent who is bringing up the child the opportunity to participate in working life. If anything positive can be taken away from the Corona pandemic, it is the steep learning curve that work can also be done from the home office and that work can be organised much more flexibly. With unequally poor pay, the attitude that parenting is a woman's job and the inability to integrate the parent into working life, we are amputating 50% of our own brains. We simply don't let them think. And not letting a brain think - well, you can't really define stupidity any better than that. But even the inclusion and consideration of the female half of humanity in language is so threatening to some that they speak of gender madness. Hopefully, this too will soon cause people to shake their heads in incomprehension. Society is changing. But why is this increasingly overwhelming us as a society and economy? After all, as seen above, we are creatures of change. That is true, but we are creatures of evolutionary change, of slow and steady change. If this change happens too quickly, it overwhelms us. If the change is too fast, we cannot cope with it. But what does ‘too fast’ actually mean?

We all know the story of the Indian scholar who taught the Maharajah how to play chess and was allowed to ask for a reward. He was modest. He asked the Maharajah to put grains of rice on the squares of the chessboard: one on the first, two on the second, four on the third, eight on the fourth and so on. 2, 4, 8 grains of rice - the Maharaja looked at the chessboard, thought of a bag of rice and laughingly accepted the demand. He was delighted that the scholar asked for so little or simply could not appreciate the value of rice. When he started to pay his debt and put the rice grains on the chessboard, he must have stopped laughing. At the latest when he realised that he was bankrupt, he must have realised his mistake. Why was he bankrupt?

Because with a doubling per field with 64 fields, there are 263 grains of rice on the last field alone. That is 9.223.372.036.864.775.808 grains. If each grain weighs 0.3 grams on average, there are 277 billion tonnes of rice on the sixty-fourth field alone. If you add the 63 fields before that, you get 540 billion tonnes. In 2018/2019, the global harvest amounted to 499.2 million tonnes of rice. 540 billion tonnes divided by 499.2 million tonnes/year gives about 1081 years. So the Maharaja gambled away the next 1081 years' harvests of all the countries in the world - therefore bankrupt. But why didn't he notice this? Because we are used to linearity. But doublings reflect exponential growth. It looks like linear growth at the beginning because the scales are so small - it takes a little while, but then it explodes.

In 1965, Gordon Moore [6] of Intel formulated the law in Electronics magazine that the number of integrated circuits (in computer processors) doubles about every two years. In 1972 there were about 2500 circuits in a processor, in 1974 there were 5000 and in 1984 there were just over 100,000. That is about when society started to notice microprocessors in computers and game consoles (Atari rules!). In 1994, there were about 500,000 circuits - enough to give the operating system a fancy interface and make the computer comfortable to use. Up to this point, you had to know some kind of computer language - you had to know the commands and follow their syntax. If you couldn't do that, you couldn't open or process files. With a user interface, the use became visual and accessible to a wider mass of people. We can remember symbols more easily than abstract abbreviations. From this time onwards, the internet also emerged, something like the extended phenotype of integrated circuits. One development makes the other possible and an exponential parallel evolution takes place. In 2004 there were a hundred million circuits, in 2014 five billion transistors and today we are close to the 50 billion mark. Thanks to high computing power and storage capacity, the internet has established itself as a real business location to which entire industries have migrated or been substituted.

We are in the process of developing a new, extended phenotype - a digital one. Through smartphones, wearables and constant involvement in the flow of data, we are linking the digital with the analogue reality and making both interdependent. We influence the digital reality and thus also the analogue reality. Dating on the internet, by selecting the best matches, leads to perfect couples (QED), creating the next generation of digitalos. If only people who are a Perfect Couple approved by apps and who have a Super Social Score in the form of many Likes reproduce, then the digital world has a massive impact on our old analogue world - to the point of evolution or devolution. The digital phenotype directly influences our digital, but also biological development - with increasing speed and intensity. If that's not an extended phenotype, I don't know what is.

The mathematics behind what we still call artificial intelligence dates back to the 1950s. Much of these theories, concepts and ideas were hidden in papers and textbooks and for a long time were effectively without practical relevance because there was no technology to enable their application [7]. Until today, although, actually, until yesterday. Yesterday we were at the beginning of what we call artificial intelligence. Today we are one step further. It took 70 years to develop AI on paper, invent the necessary technology and see the first tender shoots sprout. In a linear world, the world of our brain, perception and consciousness, we can sit back without worry. In the exponential world of the chessboard, we should be very mindful.If the water lilies in a water lily pond are thriving, doubling in size every day and covering half the surface of the lake after ten days, then we must act today, because tomorrow the lake will be completely covered with water lilies, suffocating all life in it.

EVERYDAY LIFE IN THE VUCA WORLD

„Roads?

Where we’re going we don’t need roads!“

DOC BROWN

In a world where it is not a stigma to have no idea about science - some people even flirt with it - it is naïve to expect a basic understanding of statistics and probabilistic thinking. The relationships in aristocratic houses or the latest baking recipes of Z celebrities are discussed in detail, but why one is weightless in the ISS, even though 90% of the earthly gravitational forces are still at work in a 400 km orbit, produces perplexed silence. Sometimes also mad giggles. Now you might think that COVID-19 and the pandemic that accompanied it was a game-changer. Because suddenly, instead of football and royal weddings, exponential growth and doubling rates were being talked about on TV. But it was amazing that even those who reported on it in the Corona era don't seem to have understood the concept of the doubling rate. The doubling rate is about something doubling in a certain period of time. The water lilies on the lake or the number of people infected with COVID-19. The aim of the containment measures was to bring the infection rate to 1, so that one infected person would only infect one uninfected person. In addition, the doubling rate was to be slowed from an initial four days to ten days. Later, the number of new infections and the 7-day incidence value were consulted. The 7-day incidence value is the arithmetic mean (more on this later) of the new infections of the past 7 days. And indeed the numbers are going down. But the number of infected people is not. It is increasing. If the number of newly infected people is lower today than yesterday, then there are fewer people in comparison, but the total number of infected people becomes larger, because those newly infected today are added to those newly infected yesterday. The total number of infected people is climbing - and climbing rapidly. It's just not increasing as fast as it could if it were allowed to. If I could manage to halve the doubling rate of water lilies on my pond, I would be given until the day after tomorrow to save my pond. I gain exactly one day and I should use it well.

These mechanisms require an early understanding of the interrelationships and possible effects of events. I have to recognise the connections - the effects of the growth rate. As soon as I spot the first water lilies and notice their spread, I inevitably have to act. Hesitant waiting allows the situation to escalate so that I can no longer reverse the trend and possibly suffer great damage. This is exactly what happened in the COVID-19 pandemic. First it was in China - too far away to be relevant. Then in Europe - can still be ignored. Then the first hotspots came and the spread went into full dynamic. It calmed down in the summer and the second wave from autumn 2020 hit Europe even harder than the first. And again and again people advised not to listen to science, because that too was just an opinion. It would have been easy to ward off the second wave - all that was needed was a behavioural adjustment.

With enough time, I can observe a development, analyse it and think about how to deal with it. In 1877, the first telephone call was made in Germany with a Bell set and from 1881, the first public telephone networks were built. In 1930, there were around 3.2 million telephone connections in Germany. The instant messaging service WhatsApp, launched in 2009, cracked the 30 million user mark in Germany after five years and is used by almost all German users of communication services in 2020. The platform TikTok had 5.5 million users in Germany in 2019 - after two years. So the question now is whether the rapid spread is in the nature of the service or whether the speed of spread has increased in general. Is my boat that fast or am I riding a tsunami wave? Has there always been a doubling rate and have we always moved forward one square at a time on the chessboard?

In the 1990s, the acronym VUCA emerged at the United States Army War College as an abbreviation for voltility, uncertainty, complexity and ambiguity. The term was used to teach and describe the changing strategies of warfare. In the past, in a proper war, two armies would face each other. Then one would give the command, all would run and at the end there would remain a red field of honour (please forgive my cynicism). Okay, not red when gassing each other, but those are details (again). With the Vietnam War and at the latest with the invasion of Iraq, the concept changed. Suddenly there were no more uniformed armies, but women and children with explosive belts and alliances that changed daily. Sometimes friend and foe also differ regionally. The same people who are my friends and allies in one city can be the enemies in the other.

At the United States Army War College, one spoke of volatile situations, of conditions that could change very quickly. Supposedly safe missions could turn into combat missions through attacks and sudden assaults, which posed completely different challenges for people and material. Changes are unpredictable and cause-and-effect relationships practically impossible to name. The lack of cause-effect relationships makes action in the VUCA world uncertain. In a non-linear world, i.e. a world without recognisable cause-effect relationships, planning actions in response to future developments is almost impossible. Likewise, it is virtually hopeless to make predictions about the future based on past observations. The future is not a repetition of the past.

If there is a lack of linearity, then causes have more than one effect and effects often have more than one cause. Changing one factor can cause a completely unexpected reaction or create ten new problems with the solution of the first problem. When causes and effects interfere, we speak of complexity. A complex system cannot be properly understood by pure observation. In a complex system, all or at least many parts interact with each other. They influence each other and depend on each other. When I turn a knob, I see effects in several places. But it is by no means certain that twisting the same knob at a different time will trigger the same effects. We have no idea what the consequences of the great species extinction we are witnessing will be.

The ambiguity of the VUCA world results from the fact that standard procedures no longer exist in a volatile, uncertain and complex world. A standard procedure is characterised by a certain longevity. How can something long-lasting last in a volatile, i.e. rapidly changing, uncertain, complex world? Basically, in a world that is constantly changing, there are no real standards any more.The time periods in which standards retain their validity are becoming shorter and shorter until they are no longer sufficient to develop standards at all.

Rapidly changing societies also lead to a rapid magnification of differences. This coupled with technological weapons development has resulted in a grandiose evolution of the WUSHU - the art of war. And the rapidly changing art of war has produced the VUCA world model. The exponential growth of technological possibilities and the expanded digital phenotype have completely changed the permanence of products and their life cycles. Start-ups can launch highly complex products and shake up long-established corporations. Traditional brands and products disappear without a trace and completely new industries with new business models emerge. In the last ten years, a completely new way of doing business has emerged with entirely new business models that were unthinkable in the 1990s and 2000s.

Since 2010 at the latest, the term VUCA world has also been used in business [8]. Rapid change that enables completely new products and manufacturing processes, platform technologies that enable completely new business models, and global structures that open up completely new distribution channels make global trade independent of one's own company size and make it basically accessible to everyone. In the process, the distinction between analogue and digital goods is becoming increasingly blurred. Whether I stream films, buy digital music as a stream or pressed onto a CD, book a holiday or buy office furniture - the actual purchasing process is no longer different. If I buy a physical good, there is still a logistics service provider who delivers the goods to me - otherwise the processes no longer differ. The ability to deal with rapid changes, uncertainties and complexities is the key to long-term survival. The most obvious fast-moving change is the digitalisation of the economy and society. It now forms the backbone of technological, but also social developments.

The digital economy is borderless and inevitably drives globalisation. Many countries are experimenting with digital administration to make government records digitally available to their citizens. Some are doing it faster, others are lagging behind. But there is no country where the relevance of the topic has not been recognised. Many companies are developing many products and testing new business models all over the world. Occasionally, they are capable of completely wiping out traditional industries. In these cases, the term 'disruption' is used. And the strategy for surviving in such a world is usually described as agility, i.e. the ability to change and adapt as an organisation - not at the pace of a regular restructuring, but driven by the impulses of the market and more specifically one's own customers. And this has to happen so rapidly that one adapts to customer needs before they have evaporated - in other words, very quickly.

IMPACT OF THE VUCA WORLD - DIGITALISATION, GLOBALISATION, DISRUPTION AND AGILITY

„I repeat: this is not a drill. This is the Apocalypse. Please exit the hospital in an orderly fashion.."

HOSPITAL P. A.

The elegance of the term - VUCA - is certainly debatable, but no other socio-economic development of the last 50 years has brought such rapid, far-reaching and, above all, irreversible change. VUCA can be translated into our everyday world with four terms: Digitalisation can be used as a general synonym for increasing permeation of technology, also robotisation. Globalisation stands for unrestricted expansion. Globalisation does not mean the customs clearance of goods, but the unlimited availability of the most valuable commodity of our time: data and its linking to information and its linking to knowledge. By Disruption we mean the sudden appearance of unexpected innovations as a direct result of digital globalisation.Economic striving is no longer characterised by looking in the rear-view mirror to see if the competitor is catching up. Economic striving is threatened by turning out of the side road. Even the biggest global players can be faltered and even brought down by small competitors. So we need to choose organisational structures that allow us to deal with constant change and adapt to new circumstances. Plan-driven work is not flexible enough to adapt to rapid change. Therefore, methods and frameworks are needed that can deal with constant change without being undermined or corrupted. This organisational culture is called Agility. In the VUCA world, agility seems to be the only

DIGITALISATION

„And the world was more beautiful than I ever dreamed, but also more dangerous than I ever imagined.“

KEVIN FLYNN

The dream of digitalisation seems as old as the Commodore 64, which from the mid-1980s onwards could be found not only in domestic children's rooms but also in one or two offices. While the 5 1/4 inch floppy disk quickly became popular among gamers, professional users were often content with the much slower Datasette. In the 1980s, digitalisation still meant a paperless office. And in a presentation of a physicist I was recently allowed to attend, he first described how analogue waves with certain sampling rates can be converted into digital signals and then stored and copied without loss. In fact, he then also had a lot to say about the PDF format and, as the managing director of a medium-sized mechanical engineering company, also about the paperless office. That is the technical process of digitalisation. But that is not what is meant here. Digitalisation is not (only) the provision of fibre optic technology and fast mobile data networks. This is only the infrastructure that digitalisation requires. Digitalisation in a socio-economic context means the exploitation of these infrastructures to digitalise entire economic sectors, business models and corporate processes.

It's about the increased performance of digital processors that can and will deliver unimagined computing power, storage power and ultimately learning power. I am concerned with the digital, enhanced phenotypes of processor performance, such as digital data processing, data transmission and pattern recognition by artificial intelligences.

We have known for a long time that computers can play chess. The rules of chess are relatively simple and can be explained algorithmically. However, working through the rules of chess is not enough to win against a chess master. A certain amount of experience is necessary, and experience is acquired over a period of time. You can't shortcut experience either. To become a chess master, in addition to the necessary talent, you need about 10,000 hours of playing to build up the experience. IBM's Deep Blue did not have to build up this experience in tedious hours, but had this experience thanks to thousands of stored games and thus won an entire competition of six games under tournament conditions against the reigning world chess champion Garri Kasparov in 1997. From today's artificial intelligence perspective, this is almost primitive, because Deep Blue had simply stored everything known about chess. When Kasparov made a move, Deep Blue could compare it with all possible countermoves and thus statistically evaluate the course of the game. The move with the highest success rate was then selected. Actually, this is not intelligent behaviour, at least it is neither complex nor creative. Knowing the phone number for each name is not a problem if you can simply look it up in the phone books.

20 years later, AI implements machine learning. The much more complex game of GO (Everything must GO!) compared to chess has been mastered by computers since 2006, but also on the basis of statistical evaluations of stored moves. In 2015, the European champion Fan Hui was beaten by the AlphaGo programme after it had been trained by humans and other Go programmes. I have to pause at this thought - humans train a machine because the machine can use the trained behaviour much more efficiently once it is learned. In 2017, AlphaGo Zero was released. And at this point at the latest, we should sit up and take notice. Because AlphaGo Zero was neither trained nor fed with databases. AlphaGo Zero learned the game for itself using the rules - and beat AlphaGo after only three days. AlphaGo Zero is therefore a self-learning machine. AlphaZero from the same year learned both chess and Go and beat all programmes published to date. When a machine knows all possible moves and then selects their application via probability distributions, it's as impressive as a memorised phone book. When the machine is trained by humans, it simply mimics the known strategies. It looks at future games as variants of past games. New strategies do not emerge with this approach. But AlphaZero is different - AlphaZero develops new strategies on its own. It does not imitate games, but reinvents them independently. That is creative behaviour.

Since 2018, we have found reports of computers composing music in the style of Bach, without experts being able to tell Bach and the AI apart [9]. Also in 2018, a painting by an AI was auctioned at Christie's auction house with an expected price of up to 10,000 US dollars. Music is based on patterns that can be explained using mathematics. Artistic and musical creativity are based on combining, adapting and recombining patterns that we perceive as harmonious, discordant or simply beautiful. Apparently, AIs are creative.

Medical diagnostics is a prime example of pattern recognition. Machine learning enables artificial intelligences to recognise tumours on CT scans more reliably than humans - also already today. In the development of medicines, AI systems are used to test the efficacy of substances in simulation without actually having to produce the active ingredient. And the fact that our planes fly on autopilot has been okay for a long time, now cars will follow suit. And presumably road traffic will be much less congested and safer.

And all this digitalisation, both infrastructural and socio-economic, is directly related to Moore's Law. Simply put, the more integrated circuits I can put into a processor, the greater the computing power of the processor. With 1000 transistors, I can map twice as many states as with 500 transistors. The doubling rate of the transistors installed in a processor was initially about 24 months, later it dropped to about 18 months. If we assume that the doubling rate of integrated circuits is directly related to the degree of digitalisation, then it is quite easy to explain why we are simply caught off guard and surprised by this technological development. Until 2010, everything was in the green because you had to be interested in the subject matter to catch on. Everyone else, in society and in politics, did not understand what was coming and ignored indications of it. The development of integrated circuits from 1970 to 2020 is shown in the following diagram.

Moore's Law

Number of integrated circuits from 1970 to 2020

If we stay in the picture of the chessboard from above and the numbers of the installed transistors are our grains of rice, then the field number determines the progress of digitalisation. Since 1970, following Moore's Law, we have moved 26 squares forward on the chessboard. Until 2010, the development seemed linear, although it followed a doubling rate. Because the scales were so small, we did not perceive the doubling as such. The increase from 5000 to 10,000 processors does not lead to epochal changes. The increase from 5 billion in 2014 to almost 50 billion in 2020 presents us with unpredictable challenges and changes. We are standing on square 26 of a chessboard whose size we do not know.

The CEO of graphics card manufacturer Nvidia, Jensen Huang, announced in 2019 that Moore's Law had reached its limit [10]. Increasing performance by increasing the number of transistors used is now reaching its physical limits after 50 years of exponential growth. A circuit simply cannot be smaller than an atom. This sets a limit to miniaturisation [11]. Huang speaks of annual growth in the single-digit percentage range and doubling in ten years. Analysts see a slowdown in Moore's Law, but no immediate end yet. When Huang assumed the end of doubling - in June 2020 - research was being done on seven- and five-nanometre architectures. By April 2021, the five-nanometre architecture has long been in use in mobile phones, and on 06 May 2021 IBM unveils the first two-nanometre chip[12]. An architecture that was considered impossible 12 months earlier. But probably in a few years there will be an end to doubling as we know it. Let's say ‘in a few years’ is six years, then our chessboard would have 30 squares. That sounds fair. The effect of exponential development on the number of integrated circuits is shown in the following diagram.

The next step in digitalisation

Number of integrated circuits from 2020 to 2026

If we look at the level of digitalisation over the next six years, if we look at the rapid increase in the curve compared to the past three decades, it becomes clear that we are still at the very beginning of digitalisation and that the real momentum, the real change, is just beginning. Change will never be as slow as it is today.

Does our chessboard end at square 30? Probably not. It is much more likely that a whole new era of technological development will begin [13]. Existing technologies will now be used effectively and made more efficient. A novel chip design that stacks the integrated circuits in threedimensional structures is one avenue being pursued alongside further miniaturisation. And we are just becoming aware of a second chessboard that was heavily dependent on the first but is increasingly emancipating itself. I mean the development of our extended - digital - phenotype. The digital phenotype was dependent on fast data processing, cheap infrastructure and the availability of data networks. With increasing global connectivity, the digital phenotype has been able to develop, but is no longer dependent on it. The outsourcing of social interaction to digital networks is no longer dependent on further increases in processor power. Even if technological development were to stagnate now, this would have no influence on the further expression of the digital phenotype. The digital extended phenotype has therefore taken on its own dynamic.

The beaver's lodge has developed its own dynamic. Even if individual processors cannot be made more powerful, one simply puts several processors into one housing - as has been done for years. The naïve hope that with the end of Moore's Law the end of digitalisation is now also approaching should be quickly put to rest.

GLOBALISATION

„Every mammal on this planet instinctively develops a natural equilibrium with the surrounding environment, but you humans do not. You move to an area, and you multiply, and multiply, until every natural resource is consumed. The only way you can survive is to spread to another area.“

AGENT SMITH

The world has never been better, smarter, healthier and more peaceful than it is today. How do I arrive at this? By counting. It's called statistics. Global infant mortality dropped from 44% to 4% from 1800 to 2016, war deaths from 201 per 100,000 people in 1942 to one per 100,000 in 2016. From 1929 to 1933, 2100 people per 10 billion passenger air miles died in crashes. In 2012 to 2016, it was only one. The proportion of undernourished people fell from 28% to 11% between 1970 and 2015, smallpox has been considered extinct since 1979, and the number of new HIV infections per million people more than halved from 549 to 241 between 1996 and 2016. At the same time, grain yields in tonnes per hectare are increasing from 1.4 tonnes in 1961 to 4 tonnes in 2014, more and more scientific papers are being published, and the proportion of adults over the age of 15 with basic literacy skills has been significantly increased from 10% in 1800 to 86% in 2016. This is an arbitrary selection of metrics that can be easily reviewed and added to at will. Objectively, our world is getting better. If you want to dive into the wonderful world of factual, you will certainly find more than one gateway in Hans Rosling's book Factfulness [14].

Why is the world getting better? Because knowledge is becoming available, viewable and easily accessible. We don't have to literally reinvent the wheel. We can build on existing knowledge. And so the world is moving closer together through digitalisation. Economy, politics, culture and communication between individuals, organisations and states are increasingly intertwined and form interwoven units and structures. This network of cross-border cooperation is called globalisation.

We gain access to goods and services, information and knowledge worldwide and can reuse this. Since our economic system is based on the idea of constant growth, the necessary demand can no longer be generated in existing domestic markets. Between 1960 and 2018, global recorded exports of goods increased by 1874% [15]. Global production of goods increased by 625 % in the same period. Economic globalisation is driven by multinational companies, far more than half of whose employees are based abroad. The use of locational advantages - low tax rates, lower labour costs, access to technologies - leads to local optimisations in the production process that pay off for the overall economy: designed in California, manufactured in China.

Alongside economic globalisation, however, cultural globalisation is also taking place. The standardisation of eating habits is being carried into the world on golden wings. The driving force behind cultural globalisation, however, is being on social networks - an extended phenotype of digitalisation. The internet is shaping and changing not only the accessibility between people, but also their language and the way they interact with each other. 1.3 billion users are active on Facebook at least once a day, almost 21% of them from Europe [16]. Being ‘liked’ has become a completely new industry and influencer is, in all seriousness, a non-disparaging job title. Anyone can make their content accessible worldwide with relatively simple means, and celebrity and career depend only on the penetration of one's own appearance.

Why then do people feel threatened by globalisation? Because globalisation, the permanent, unfiltered flood of information, overwhelms people in its massiveness. Information, thoroughly researched or freely invented, pelts us and we have to decide what is relevant for us. And since not all people are interested in facts, but want to stir up emotions, threat situations are constructed to move people to act in one direction or another, to manipulate them. There is a huge difference between a real and a perceived threat. The perceived threat is diffuse and can be fuelled by a catalyst. Some people have a vested interest in setting themselves apart from others, attributing or denying certain qualities and abilities to others, and fuelling fear of the stranger. By demarcating oneself, one can project one's fear onto the demarcated and conveniently have someone who is then to blame for everything, whom one can get angry with, hate and, if one is completely disinhibited, against whom one can then direct violence. Irrespective of the fact that in this way one causes great suffering to other people, one's own threat situation will not change. Shared suffering is double suffering.

As seen above, digitalisation is exponential and happens globally and without borders. Local economic systems simply no longer make sense in the digital economy because locations are irrelevant. As long as you can get online, where you are and where you act doesn't matter. Never before has it been so easy and normal to obtain goods and services worldwide. Never before has so much information been available to us for direct use - in text, image and sound. Today's mobile data usage and our ability to access all information on the move at any time was unthinkable just ten years ago. Holding a mobile meeting with people from all over the world has become an indispensable part of everyday business life, but it is also a new development.

The protection of the locally delimited is not only abandoned, but necessarily dissolves in the course of the globalisation that accompanies digitalisation. To resist globalisation means to resist digitalisation. It is to be feared that an organisation does not have enough strength to permanently resist. Those who are unable to adapt to constant change will probably no longer be able to meet the demands of the market. However, the legendary physicist, statistician and pioneer in the field of quality management William Edwards Deming gives encouragement here: "It is not necessary to change. Survival is not mandatory." [17]

DISRUPTION

„The risk is incidental compared to the possibility to posses the great truth of the unknown.“

DR. HANS REINHARDT

The infrastructure for new products, services and business models is growing exponentially. Moreover, access to it is easy and inexpensive and available worldwide. Companies are being founded that do nothing more than bring together existing services and service providers. AirBnB brings together people who provide accommodation by the day and those who want to privately book a room or flat for short trips, holidays or business trips. AirBnB is the world's largest hotel company without owning a single hotel. It's a similar story with UBER - no fleet of vehicles of its own. Completely new business models are emerging here because direct communication between potential customer and potential provider or seller can be established quasi in real time, but anonymously. The partner with the data earns - and that is the platform in the middle. The largest digital trading companies are platforms through which goods are sold from their own warehouses, but also through affiliated merchant shops. Here, the platform operator has such market power that he can impose an above-average commission on the trader, but at the same time enforces the highest customer service. Anyone who does not react in an absolutely customer-friendly way, who does not handle complaints and exchanges quickly and without complications, is thrown off the platform and practically no longer has access to the market. A brutal practice, but one that no customer should complain about.

But the possibility of subordinating oneself as a trader to a platform operator also offers undreamt-of possibilities. For example, the entire logistics and payment transactions can be handled worldwide by the platform operator, so that small businesses in particular can concentrate only on their products. As a platform, existing services can be merged into a new one, behind which stands a completely new business model. This can shake up entire industries. UBER is the largest taxi company in the world without its own taxi. Airbnb is the largest hotel company in the world without a single hotel. Amazon, on the other hand, is currently testing the concept of physical retail shops in order to now establish digital concepts in the analogue world. Amazon recently started offering prescription drug shipping in the US, has introduced health insurance for employees and employs its own team of doctors. Why are they doing this? Will there soon be Amazon hospitals for Amazon health insurance customers? To understand this properly, you need to understand what is meant by disruption.

I remember the heated discussion about which was the better system: VHS or VIDEO2000. VIDEO2000 tapes had two sides, so they could be turned over, and thus had twice the playing time. Furthermore, the picture was probably better. Or was Betamax the ultimate? Betamax had the coolest name and at the latest since Back to the Future, everyone knew how small and stylish a (JVC) Betamax camcorder was.

In the video stores there were three key rings hanging under the film cover - one in red, one in green, one in blue. Red was the VIDEO2000 copy, green VHS and blue Betamax. Under many films there were no blue tags because the films were not distributed in Betamax format. The green trailers were practically always gone because everyone had VHS and only the red ones were available in abundance. And I was lucky that a mate actually had a VIDEO2000 machine so we could rent the films in VIDEO2000 and then copy them to VHS (yes, yes, sue me). He was always a bit unlucky because we would then play his copy back from VHS to VIDEO2000. The picture noise increased a bit, but we could watch Aliens up and down in January '87.

Then came the laserdisc - as big as a long-playing record, as glittery as a CD. Although the picture was scanned with a laser, it was still stored in analogue. Only the sound came in AC3 format, i.e. a digital 5.1 surround format. The picture quality corresponded to an excellent VHS copy, which, however, did not deteriorate with frequent playback due to the optical scanning, which could not exactly be said of VHS tapes.

Lucasfilm released Star Wars THX remastered on laserdisc in 1995 - for the last time in this version. If only I had known back then what that meant and why George Lucas kept talking about episodes 1 to 3 in the interview on the disc - I would have been spared a lot of grief. Anyway. The laserdisc always led an underrepresented coexistence next to the VHS cassette until the DVD was introduced. Better picture, better sound, handy format, easy to use - VHS and laserdisc were ousted from my shelf relatively quickly. And a few years later there was a format war between HD-DVD and Blu-Ray disc, in which the Blu-Ray ultimately prevailed. With Blu-Ray as the source format, HD also arrived in Germany; in the USA it had been established for some time with the broadcast of digital HD TV channels. Why am I telling you all this? Because none of these are disruptive technologies.

From the VHS tape to the Blu-Ray disc, from the vinyl record, the music cassette, the CD, the DAT tape via the minidisk (oh how I loved the minidisk), all these are evolutionary developments in small steps. The leaps only seem big when you compare the time intervals of the product statuses. In LEAN thinking [18]this kind of development is called KAIZEN. It takes place slowly but steadily in small steps. There is no sudden displacement, but rather an orderly replacement. Disruption, on the other hand, is KAIKAKU, to stay in Japanese terminology. KAIKAKU is a big bang, a sudden radical change that solves a problem in a radically different way.

Netflix started as a mail-order video store. You rented films on DVD and then received them by post a few days later. This was followed by a subscription model and finally the crazy idea of streaming films. Today, streaming service providers have completely supplanted video stores. Although the film rent in the few remaining video stores is significantly lower than online, they eke out a purely niche existence. And the streaming market is highly competitive. Alongside Netflix, Amazon Prime and Apple, the fourth major player, Disney, joined the fray in 2019. The few European streaming offerings, on the other hand, are sinking into insignificance, especially because the aforementioned players offer high-profile in-house productions that are intended to attract and retain viewers on the respective platforms. The cinema and video industry has been hit unexpectedly and hard by the streaming services and there is virtually no chance that the ‘market will recover’. The prolonged closure of cinemas during the Corona pandemic exacerbates this trend. Film releases are either postponed or happen right away on the streaming platforms.

Classic analogue television is still being kept alive. Even if a large part of the programmes broadcast are also streams that come in the guise of classic television. From today's perspective, there is no reason to let the television programme dictate one's daily routine. When I was a child, dinner was at 7 p.m. so that nothing would get in the way of the day's news at 8 p.m.. My children are not ready to accept this concept - why should they?

The first industry to be hit hard, however, was the music industry. At the end of the 1990s, the mp3 format developed by the Fraunhofer Institute became established, which made it possible to compress music data in such a way that there was practically no audible loss. The mp3 format makes use of the laws of psycho-acoustics. There are frequencies that we hear but do not perceive. If these are filtered out, this reduces the data stream, but does not lead to any consciously perceptible change in the music. 1 MB of music data corresponded to about one minute of listening.

And since the introduction of ADSL increased the data bandwidth, larger files could be transferred faster. This is what made the wonderful service Napster so quickly popular. Users, when online, make their mp3 library available for download and in return can download mp3 files themselves from all other users. For the first time, it was possible to simply download individual songs and listen to them in real time. Special rarities and illegal live recordings (bootlegs) were suddenly available. Speaking of illegal: unfortunately, this exchange business completely bypassed the interests of the industry. I could live with that, but unfortunately, of course, it also completely bypassed the interests of the artists. I can't live with that so well. It was simply intellectual theft. What did the big music publishers do? They screamed for tougher law enforcement, ran commercials showing teenagers being arrested from their nurseries and started selling music files online that were so restrictively protected that it was completely unattractive to buy them. The protection went so far that you were only allowed to copy the file you bought to a maximum of five players. This felt like buying something you could not freely dispose of. The paying customer was thus placed under general suspicion.

It was Steve Jobs who saw the potential and the new opportunities. He signed innovative contracts with the big music publishers, selling every song for 99 cents and raking in a margin of 30 %. That was the first nail in the coffin for the classical music industry. The Swedish company Spotify was the first music streaming service a little later - pay once a month and then listen as long and as much as you want. Those were the other coffin nails and the coffin and graveyard of the classical music industry to boot. Today, charts are no longer determined by sales figures but by downloads.

Okay, but is that all so bad? Sure, a few people who used to press CDs have lost their jobs, but we as an economy will put up with that. Or will we? I'm not so sure. As an economy, you can withstand it if you can offer booming industries and disruptive technologies in return. Then structures change and people adapt to the demands. But if the key industries are gradually swept away and no real innovations come along, then you won't be able to maintain your status.

When was the last time you used a Siemens mobile phone? Or seen one? In the 1990s, Siemens was one of the biggest mobile phone manufacturers after market leader Nokia - not Samsung or Apple.

The German computer magazine CHIP published an article on 23.12.2007 about the top 10 mobile phone candidates - the article is more than worth reading [19]. Of 30 models presented, eleven came from the market leader Nokia [20]. The devices are aimed at phone users, music listeners, mail writers and mobile office users. There is a specialised device for every interest and user. In the same year, the Apple iPhone 8 GB was introduced for the first time. A single model on which one can load applications and thus adapt the device to one's individual needs. The iPhone is the first mobile phone with a full touch display completely without a keyboard. The reaction of the former CEO of Microsoft Steve Ballmer has become legendary [21].

After the concept developed by Apple was surprisingly accepted and Samsung very quickly adapted it for itself, Microsoft tried to breathe market power into its Windows Phone in an alliance with the former market leader Nokia. Nokia had sold its entire mobile phone division to Microsoft in April 2014. Windows Mobile market share fell from 2.8% in Q4 2014 to 0.4% in Q2 2016, and support for Windows 10 Mobile was dropped altogether in July 2017. Blackberry, a manufacturer focused on the professional mobile phone market, suffered a similar fate.

There are many other examples. Where, for example, have the German consumer electronics companies that were the world's sound reference until the 1980s gone? Loewe, Metz, Saba, Grundig? Or what happened to KODAK, once the world's most important manufacturer of photographic equipment and films? Kodak engineer Steven J. Sasson invented the first digital camera for Kodak back in 1975. In 1991, the "DC-100", the first digital camera, was brought onto the market - not quite suitable for the masses at that time for 25,000 DM (12.500 EUR). In 1992, KODAK launched the KODAK Photo CD, a pioneer in the digital photo sector, but was still completely focused on analogue photography. Thus, the decrease in sales in the analogue sector caused the company noticeable difficulties because it did not understand how to put the new technology on a sustainable footing.

What all these companies have in common is that disruption, KAIKAKU - a big bang - a sudden event that changes the rules of the game, has robbed them of their economic foundations and they have not been able to react to it.

Of course, disruption is nothing new. There has always been creative use of new technologies to solve old problems. Today's capital of the Brazilian state of , was the most important centre for the production and trade of rubber in the Brazilian Empire. Around 1890, the village in the jungle became a prosperous city, and the magnificent buildings of that time are still a reminder of its former wealth. The rubber tree only thrived in the climate of the Amazon until British botanists succeeded in growing 200 plants in a greenhouse in London, and a total of eight plants were established in Southeast Asia. The entire rubber population there today can probably be traced back to these eight plants. When the German Reich was cut off from rubber during the First World War, Fritz Hofmann produced so-called methyl rubber, which ushered in the rise of synthetic rubber.

Around 1910, the price of rubber began to fall until Manaus sank back into insignificance. The rise and fall of a village on the Amazon. Which part of this story is KAIKAKU and which is KAIZEN is hard to say. What is decisive, however, is that the change in the economic environment made Manaus' rise possible. The image of managers lighting their cigars with banknotes dates from this era. Success, however, apparently made people blind. After all, if you are so successful, you can't have done anything wrong. That may be true, but blindness also closes one's eyes to the changing environment. And we will take a closer look at the fact that luck is far more often the key to success than genius. Those who do not perceive the changing environment or are not able to adapt to it quickly will not be able to exist in the long term. It's as simple as that.

Disruptive events have always happened and groundbreaking new ideas have displaced old business models. What is new is the frequency of change. Elon Musk's activities over the past ten years alone give a good impression of how change happens. The German car industry was very convinced of itself. Managers were praised when electronics could be installed with maximum efficiency. The saving of a memory chip at a price of 0.20 EUR means a saving of 200,000 EUR when selling a million models. Alternative drives were largely ignored by the German car industry. Tesla introduced the Model S at the IAA in Frankfurt in 2009, the Model X was launched in 2015 and the Model 3 started in 2017. The Model Y was introduced in 2019. The model designations alone would be an affront to the conservative German car industry: S - 3 - X - Y.

On 01.07.2020, Forbes announced that Tesla is the most valuable car manufacturer in the world [22] - more valuable than BMW, Daimler and VW combined. Shortly before, on 30.05.2020, the Falcon 9 rocket of Musk's company SpaceX became the first private company to bring astronauts to the International Space Station [23]. SpaceX's declared goal: to build a colony on Mars. And the Hyperloop concept, also conceived by Musk - a magnetic levitation train with minimal friction travels through a quasi-vacuum in a tube [24] - is also being promoted by the Dutch company Hardt [25] in addition to Virgin Hyperloop. The train is supposed to float through the tube at 700 kilometres per hour, thus enabling the speed of flying on the ground. From 2025, goods are to be transported on test routes, and - if the authorities play along - people from 2028. The journey from Amsterdam to Düsseldorf is supposed to take 30 minutes in the Hyperloop.

Self-driving cars will be around in a few years, self-driving trucks anyway. This will change the requirements for the general infrastructure, cities and service areas. But also the vehicle design will be completely different - you don't need a sleeping cabin in a self-driving truck anymore. Smart cars can drive in clusters and accidents on the roads will probably decrease drastically. And when humans are no longer overwhelmed by having to control a highly motorised machine in real time, perhaps the many speed limits on the motorways can be lifted. A machine can drive a vehicle at 200 km/h with concentration for hours. This will require the further development of artificial intelligences capable of machine learning. These will be available within this decade. And these professional pattern recognition machines will also find their way into medicine and the pharmaceutical industry.

Steampunk thinking prevents both far-sightedness and clearsightedness. Nobody in Germany dares to enforce a general speed limit for motorways - they probably fear an armed uprising. No matter what arguments are put forward, less fatal traffic accidents, less environmental pollution, better traffic flow, the emotional fear of the basic right to drive oneself and others to death at any time cannot be overcome with rational arguments. And so it is with the idea of being driven in a car by an artificial intelligence and having no influence on the course of the journey. Among steampunks, this too meets with the greatest disapproval. The fact that AIs will drive much safer and more consistently for much longer and that higher, steady speeds will therefore be possible more safely contradicts the steampunk selfperception. So will we follow the suggestions of artificial intelligences? Will we trust them?

In time, yes, most certainly. Who checks the result of a calculator today?

AGILITY

„I got a threshold for the abuse that I will take. Now, right now, I'm a fuckin' race car, right, and you got me the red. And I'm just sayin', I'm just sayin' that it's fuckin' dangerous to have a race car in the fuckin' red. That's all."

VINCENT VEGA

Anyone who has not yet recognised buzz words in digitalisation, globalisation and disruption will groan at the latest at agility - or AGILE. Since the early 2000s, software and IT teams have been confronted with the most diverse theories of agility (please don't confuse this with AGILITY, which is a dog sport, although the difference is not always obvious). Scrum, SaFE, LeSS, mOre, Spotify, Design Thinking, Google Sprinting, Holocracy and LEAN Startup - all designed to make the organisation faster, more productive and more efficient. I conducted a series of interviews with Agile coaches in 2019 to find out the most commonly cited motivations for Agile transformation in organisations. The results were devastating.

Management notices that old mechanisms no longer work as well as they used to. Competitors have new ideas and create an attractive image for themselves, while their own development cycles take too long [26]. A few years ago I worked for a logistics company that had been bought by a global player. The company hoped to enter the Northern European market with this acquisition. In order to use synergies, the entire online business was to be ported to the platform of one provider. So in 2013, the requirements for the product were collected, in 2014 primarily software was developed in the headquarters in Spain and then the live launch in Germany was requested for the beginning of 2015. My job was to carry out a project audit because the IT manager was very uncertain about the development status. In addition to countless errors in the source code documented in Catalan, the lack of a mobile commerce connection was primarily fatal. When the requirements had been collected, the sale of goods via mobile devices had been irrelevant and was therefore not taken into account.

Two years later, the company was already making 30% of its turnover on the mobile online channel. If the software had gone live, 30 % of the turnover would have been lost almost immediately - and since online is the only sales channel for the company, this could have jeopardised the continued existence of the organisation. Although technically everything was done correctly, the planning and organisation method was not able to react to changing circumstances. This causes uncertainty among the usually very self-confident company and organisational leaders. The world is changing and somehow the traditional mechanisms of management, corporate governance and product development no longer work.

For a good ten years now, it has been impossible to escape the monotonous, almost sacral chant of agile propaganda. You must become agile, you must become more agile, you must remain agile. The perfidious thing about this canon is that it is true. Agility is the only answer to continuous change [27]. But there is a huge difference between being agile and introducing agile methods. In fact, a completely new branch of consultancy and business models have also developed from introducing agile methods. Advice is given on the best method to use, the knowledge of a method is trained up and down, and then its introduction is accompanied by coaching. And if it doesn't work in the end, then the mindset in the organisation is not right [28]. Without the right mindset, nothing works. And so the dance starts all over again - with the next method and the next consultancy.

So what is actually meant by agility? Agility describes a form of organisation that is not only able to adapt quickly to dynamic changes, but also systematically perceives these changes in the market [29]. An agile organisation thus has a distinctive sensory system, similar to a network of nerves, which enables it to perceive and process impulses and stimuli directly at the point of occurrence. At the point of occurrence of the stimulus, a decision is made on how to react to it. So there is no central control centre that needs all the information because it also makes all the decisions. Instead, there is directional intelligence that leaves the achievement of goals and execution to the network of specialised knowledge. An organisation that preaches team performance but intensifies individual success, a process-oriented organisation that derives its strategic impulses from market forecasts and employs dedicated decision-makers in the hierarchy, is by its nature rather not an agile organisation.

And this is precisely where the problem lies. If such a process-oriented organisation - I'll take an insurance company as an example - finds that its insurance products are no longer attractive, the online offering is non-existent and the cost structure is too high, then it doesn't help to introduce Scrum in IT. Training individual teams on certain methods may help the teams, but it does not help the organisation to train the sensory perception described above. The transformation of an organisation into an agile organisation always means a transformation for the central steering body. You are agile or you are not. You are either fat or thin - but not both at the same time.So what is actually meant by agility? Agility describes a form of organisation that is not only able to adapt quickly to dynamic changes, but also systematically perceives these changes in the market [29]. An agile organisation thus has a distinctive sensory system, similar to a network of nerves, which enables it to perceive and process impulses and stimuli directly at the point of occurrence. At the point of occurrence of the stimulus, a decision is made on how to react to it. So there is no central control centre that needs all the information because it also makes all the decisions. Instead, there is directional intelligence that leaves the achievement of goals and execution to the network of specialised knowledge. An organisation that preaches team performance but intensifies individual success, a process-oriented organisation that derives its strategic impulses from market forecasts and employs dedicated decision-makers in the hierarchy, is by its nature rather not an agile organisation.

And this is precisely where the problem lies. If such a process-oriented organisation - I'll take an insurance company as an example - finds that its insurance products are no longer attractive, the online offering is non-existent and the cost structure is too high, then it doesn't help to introduce Scrum in IT. Training individual teams on certain methods may help the teams, but it does not help the organisation to train the sensory perception described above. The transformation of an organisation into an agile organisation always means a transformation for the central steering body. You are agile or you are not. You are either fat or thin - but not both at the same time.

In an agile organisation there is no need for managers. Managers are administrators, they manage situations. In an agile organisation, this responsibility goes back to the experts who have the greatest expertise regarding the situations - that is why they are experts. In an agile organisation, the experts decide within the scope of their expertise. That is what they are hired for. If several experts work together, whether cross-functional or mono-functional, they form a team. No one has to tell this team how to solve the tasks assigned to them, they are the experts and they organise themselves. By the way, apparently nothing is more demotivating than having to be told how to do things as an expert [30]. Nobody has to explain to me how to clear the table and put the dishes into the dishwasher. A reminder to clear the table is quite sufficient.. So there is no need for administrators, for middle managers with personnel responsibility to control those who work. The first and immediate requirement is the trust of the organisation in its people - and vice versa. An expert will only take responsibility for her work if this is also accompanied by freedom of decision. After all, to be responsible for something about which one is not allowed to decide is simply to be to blame. Nobody wants that.

Management is not needed here, but leadership. Leadership personalities are those who inspire teams, departments, individuals to be imaginative and courageous. Leadership inspires, leadership prepares the pitch, leadership helps prepare for the next game, but leadership does not kick the penalty. After the whistle, the team acts autonomously and shapes the game - not the leadership. Power mongers, people for whom personnel responsibility seems to be a desirable step in their personal career, and narcissists are wrong here.

LEAN thinking, founded in the 1950s as part of Taiichi Ono's Toyota production system, radically places the customer at the centre of interest. If requirements and needs are short-lived and in a state of permanent change, then the only constant is the customer - i.e. the consumer of one's own service or products. So it is not the marketing department that develops sales plans and surveys needs analyses, but the customer is involved in product development as early as possible, initially with prototypes and later with preliminary versions. This is especially easy with digital products. Tesla is a digital product that is in constant contact with its customers and makes new functions available via the touchscreen in the centre console.

Taiichi Ono [31] coined ‘Genchi Gembutsu’ as a basic principle in LEAN - real location, real thing - the attitude that improvement and change can only be recognised and derived through direct observation of a situation from administration to production to customer wishes. Why do I keep quoting LEAN principles from the 1950s? Because LEAN thinking is the basis for agile organisation. Simplification of processes, reduction of complexity, avoidance of waste, focus on the most important work, orientation towards customer benefits, clear orientation towards customer needs and constant striving to become even better.

That is the basis of all agile methods. Only then come the tools. So when the insurance company mentioned above wants to introduce agile methods in order to react to the change in the market, it really only means the tools. We introduce time boxes, every visit to the toilet is now a sprint, the obligation to wear a tie is abolished, the jovial first-name form of address is established, requirements become user stories and specifications are now called backlogs. Brave new world - because productivity will probably drop.

Agility is not about introducing a fancy tool, wearing trainers and having a ping-pong table and table football in the hallway (which cannot be used because of the noise). Agile organisations are those that provide for flexible structures. Hierarchy does not serve to patronise, control and monitor, but to pave the way, enable and empower. In the agile view, management is not a superior, but simply another function. Experts sit in all areas of the organisation, and as such they respect each other as equals. If we now imagine a round of experts, with complementary expertise, pursuing a common goal - how would they behave?

This is the ‘agile mindset’. It's about teams working together collegially, developing the appropriate problem-solving strategies based on their problems and adapting them as needed. Everyone who can contribute to solving the problem is involved, especially the customers who give value to the work in the first place. In such a productive, collegial atmosphere, the futility of a dress code quickly becomes apparent - hence the sneakers. If you enjoy spending a lot of time with colleagues, you can't just work all the time. But common breaks also promote creativity - hence the table football. Coaches and table football, Playstation, comic shop and sleeping corner are the result of agile organisations, not their trigger.

Whether every company actually has to become agile in the above sense may also be questioned. Adaptability, changeability and decisionmaking ability also occur in patriarchal organisations. Wolfgang Grupp, head of Trigema, defines his role as an "all-embracing decision-maker" who has to be available at all times and must be able to answer every detailed question from his organisation. This means that he alone is responsible for recognising and reacting to change. This is not agile, but it works well - and thus has a very strong raison d'être. At least during his lifetime - no one can take over his role later on because his detailed knowledge spans decades. So whether this type of leadership can be maintained in the case of a company succession may also be highly doubted. Even if this form of leadership works well today, it does not seem to be a model for the future.

OUTCOME VS. EXPECTED VALUE

„Justice is only a roll of the dice. A flip of the coin. A turn… of the Wheel.“

DR. DEALGOOD

The dice offer justice, if we are to believe the prosecutor, judge and executor Dr Dealgood. But is throwing the dice really justice? Let's assume we are playing with two dice with six sides each, which are to be thrown simultaneously. It doesn't really matter how we arrange the bet now, as long as we are clear about the natural frequencies of occurrence of events. With two dice we can throw 6 times 6, that is 36 combinations. How many of them are doubles? Which is rolled more often - a 4 or a 10? Which sum is rolled most often? The best overview of the expected occurrence of the events, the probabilities, we get by looking at natural frequencies. For our two dice, this looks like this.

Which sum is rolled most often?

Natural frequencies with two dice

Viewed in this way, some facts quickly become clear. Of 36 combinations that can be rolled, six are doubles (highlighted in grey in the picture). The probability of rolling a double is therefore 6 out of 36 or 6/36. The most frequent sum that can be rolled with two dice is 7 (outlined in black in the picture). It occurs six times, while 6 and 8 only occur five times each. The probability of rolling a seven is therefore 7 out of 36 rolls, or 7/36. The probability of rolling a 6 or an 8 is equal to that of a double (namely 6/36). And we also see that it is just as likely to roll a 4 as a 10, since both results occur three times each in 36 rolls. The extremes in our distribution, i.e. the sums that occur least frequently (one could almost speak of rarely) are the 2 and the 12 - there is only one combination to roll each of them. The two rarest events with a probability of 1/36 are also doubles. .

If we look at the emerging pattern, we recognise the Gaussian normal distribution that is forming. This is world-famous, once adorned the German ten-mark note and is the standard means of evaluating and predicting our world. It forms around the mean value 7, the arithmetic mean, on the dice and adopts an absolute equal distribution. So if I were to make a bet on which number will be rolled next, I should take 7, as it occurs most often. This is easy to try. Let's assume we are offered a bet where we win if we roll two sixes. Then the probability of winning is 1/36 - out of 36 rolls, I should roll a double six once. But our bet goes even further. We actually get to roll the dice 36 times. If one of our 36 rolls is a double six, our bet is doubled. The natural frequencies chart above shows us that we can expect a double six once in 36 throws. If we play 36 times with a probability of winning of 1/36, our chance of winning statistically increases to 1, or 100%. Of course we take the bet, it's a sure thing. Or is it?

I am waiting for the Double Six

Diced Doubles

If I roll a double six, my bet doubles. So I bet EUR 10 - and lose. I rolled 36 times and didn't roll a double six. Hmm, what do I do now? If I bet EUR 10 again and win, then I have just compensated for the loss from the first round. So I should bet 20 euros, because then I win 20 euros - and that's in spite of the lost bet of 10 euros from the first round and a win of 10 euros in the second round. So we play again - this time I bet EUR 20, because I want to get back the lost tens and win. Again, no sixes. That can't be, but the dice are okay. Third round: In the first round I lost 10 EUR, in the second round 20 EUR, to be even again I have to bet 30 EUR. But it's so unlikely that I won't win again that I bet 40 EUR to at least collect the original sure win at the end. And against all expectations, I lose again. A total of 70 EUR. What happened? I rolled the dice 36 times in each of the three rounds and did not roll a single six.

The bell curve tells me that in 36 throws I can expect to roll every double once, including a double six once. In three times 36 throws, each double should fall three times. There should be a uniform picture, a discrete distribution, and not such a mountain. I lost my bet on a double six three times in a row, although I relied on statistical correlations and didn't decide from my gut as usual. Are my dice perhaps broken? Or have I not quite understood the concept of normal distribution after all?

Let's say I am standing in front of a river that I want to cross. It is 25 metres wide and a sign says that it is 25 cm deep on average. Great, my rubber boots will do.

Great, Rubber Boots will do

Average river depth

Luckily I can just about free myself from the 2.25 metre deep hole in the middle. However, my boots were already full at the 40 cm and 60 cm deep points. Why? Because the average also suggests an equal distribution - but in fact things are made equal that are not necessarily equal.

However, a linear equal distribution of the river's depth to its width does not do justice to the actual profile at all. The profile of my fictitious river with an average depth of 25 cm is shown in the following graph.

The boots are running full

Real river depth

Equalisation and normalisation lead us to completely misjudge risks and make nonsensical decisions. The Gaussian bell curve represents a mathematics of certainty that makes us risk-blind. Risk here explicitly also means opportunities. The Gaussian bell curve namely assumes a linear equal distribution. It presents us with the depth of the river as a calculated average of the different depths per metre of width. We add up all the depths per metre of width (here 625 cm) and divide the sum by the total width (here 25 m). The result is an average value of 25 cm.

A distribution gains significance with the amount of data. If I roll the dice really often, then the distribution will be as seen above. A hundred throws are simply too few. So if I have no idea, does the orientation on a distribution help me to make a decision? Let's say two people meet in a company - we have no idea who they are. We only hear that they earn a million EUR together. Wow, half a million EUR each, that's really a lot. The normal distribution suggests equal distribution and the statement that each earns 500,000 EUR on average is mathematically perfectly correct. But is that really likely? Only 0.1% of taxpayers have incomes of EUR 500,000 or more - about one in a thousand. Meeting someone like that by chance is not very likely - and two even less. So it seems more likely that one of the two earns fifty, sixty or seventy thousand EUR per year - which already puts him in the top 10 % - and the other the rest. Gaussian does not help us here because the normal distribution obscures the view for a possible weighting.

Let's look at a packed sports stadium. Let's assume that there are 12,000 people in it. Can we calculate the average income of the stadium visitors? The law of large numbers applies. The larger my population is, i.e. the number of people I look at, the more correct my result will be. So we can calculate the average income by asking everyone what they earn and dividing the total by the number of people surveyed. But what if Bill Gates comes too? With a fortune of 125 billion euros, he is one of the richest people in the world. Does his presence have an impact on our assumption? Yes! If there are 12,000 people in the stadium - and Bill Gates - and each of those present had, say, 100,000 euros in assets, then Bill Gates alone would have a fortune 100 times greater than all the other people in the stadium put together. Or just as much as one would expect in 100 stadiums. Wealth is not normally distributed and grows exponentially. The application of the bell curve leads to a completely wrong assumption.

The Gaussian normal distribution describes the behaviour of a very large population. However, it assumes that the distribution is uniform - it does not consider outliers. For that we have to use other methods based on the average. But more about that later. An equal distribution in an unequal world offers no orientation and is often not a good decisionmaking aid [32]. This is because the normal distribution does not take into account that both the die and the number of dice change. It makes a difference whether I first play with two dice and then with three. We will probably notice that relatively quickly in the course of the game. But how long does it take before we notice that one of the two dice suddenly has seven sides? The VUCA world changes the shape of the dice, the exponential world changes their number in play. The mathematics of certainty, the stochastic from school, does not prepare anyone to make decisions in an uncertain world. Business economics consistently ignores constant change - ceteris paribus. Models are calculated under the condition that everything remains the same. Where, please, in economics does everything remain the same? [33] We need a mathematics of uncertainty. We need the ability to think statistically. And we need to question traditional methods, decisions and patterns again and again - they lose their validity. We have to get away from the illusion of the exact result. We have to get away from the madness of chasing annual targets and we have to start formulating expected values that are so wisely chosen and situationally elastic that they can be adapted to changing preconditions at any time.