The rain hit the tall, cold windows behind me.

London's a great city, but when it rains, it's bleak.

The waiting room of the company was crammed with teams pitching business proposals. We were all wearing dark suits and ties and carrying the indispensable-for–management-consultants Tumi laptop bags. A chance observer would've thought they were in a room filled with Agent Smith clones from The Matrix.

I tried to steady my breathing. Waiting for my turn to pitch the eight-figure competitive proposal that my team and I had worked on for months was racking my nerves. It's incredible how the result of so much effort can depend on just a few minutes…

An annoying sound dragged me out of my thoughts. I looked down. My bag had slipped onto its side, and my phone was vibrating its way out onto the floor, vexing all the other Matrix clones around me.

Angry with myself for having forgotten to turn it off, I grabbed it, determined not to allow it to distract me from my task. I looked at the screen and furrowed my brow.

There were 17 missed calls from Abraham, my best friend whom I grew up with. Strange. This had to be urgent.

Wanting neither to disturb those around me nor to let them hear anything that might be too private, I slipped outside.

The rain was pouring, but a narrow porch served to somewhat shelter a small crowd of smokers, all huddled together and desperate for their dose of nicotine. Fighting my way out of the heavy cloud of smoke on the one side and avoiding getting soaked on the other, I edged my way to a quiet, half-dry corner where I could make the call. Though, when it ended, I wished I'd waited to talk with my friend until after my meeting.

"Hey! What's up?" he asked in a strange voice.

"I'm in London, pitching that project, remember? Is something wrong?"

"Yeah. I mean, sorry to bother you but…I'm not sure what to do in this situation, so I guess now is as good a time as any for news like this."

"What news?"

"Turns out I've got cancer. Terminal one, they tell me. And I only have a few months to live."

Every droplet of rain that fell from the edge of the porch and landed on one side of my head felt like a bucketful of iced water. My friend kept talking, but I didn't hear him. Nor did I hear the rain or my teammates yelling at me from behind to get back inside.

My friend. My best friend who was a self-made emergency room doctor, who put himself through college and med school, who was burdened with $200,000 in student debt and a new mortgage, who had two baby girls and a wife who could not work since she had to take care of the kids… This friend was going to die. In a few months' time!

After telling me that he'd decided to try some chemotherapy, just in case, and arranged to see me when I was back in the U.S., Abraham hung up.

I went back into the office building on autopilot. During the 15 minutes I had to make my case before the company representatives, I could not help but be distracted by this news and an overwhelming feeling of absolute hopelessness.

Back in Boston, I saw my friend. He looked terrible and told me he felt even worse, as he had already started the long and excruciating chemotherapy sessions that were to last for weeks. But, thank goodness he was still with us when they ended.

But, when Abraham's post-treatment results came in, it was determined that he was falsely diagnosed in the first place. He did not have cancer, the chemo was unnecessary, and he was going to live.

What!? I was, of course, ecstatic about the news, happy that my friend was fine and that his family was safe, but how was this possible? With all this new technology and advancements in medicine, how could such a thing happen?

Being who I am, I could not let this go. The absurdity of the situation and its traumatic consequences for my friend and his loved ones nagged at me all the time, distracting me at work, at home, and even at the gym. I had to get to the root of it.

When I dug deeper, it turned out that misdiagnosis of cancer is a very common occurrence to this very day. Many factors lead to this, including heuristics.

An example of Bayesian probability called "the base rate fallacy" or "the false positive paradox" is a good illustration. Let's assume that we had a virus that affected 0.1% of the population. Now, let's say that there was a test that detected infections with an accuracy of 99%. If someone you know tested positive, what is the probability that this someone would actually have the virus?

If you think like most of us, your answer will be 99%. But it'd be the wrong answer.

The right mathematical probability is 9%. That's because the 0.1% infection rate of the population has to be factored into the equation. And, to increase the accuracy of the result, you'd have to repeat the test. (Which makes you think about your PCR's future results, doesn't it?)

My investigation took me down a rabbit hole. It felt as if the more I read, the less I knew because one subject led to ten others. Factors at play were all over the map. At one point, I hit rock bottom of the Dunning-Kruger effect: the cognitive bias that makes us overestimate our competence in fields about which we know frightfully little or absolutely nothing.

The fixation on this problem tortured me for months. But, in the end, this whole endeavor led me to something good, something that turned out to be of major importance. It was, in a way, the Holy Grail: it held the key to what I was searching for all along, not only in relation to the absurdity of my friend's misdiagnosis but also to the way I approached my business. But, like most consequential things, it was hiding in plain sight, waiting for me to reach out and take it.

The idea came to me as I encountered a little-known risk management strategy that has been applied by a few successful hedge funds and investment banks for decades, called "tail-risk hedging." It turned out that the successful hedge funds and investment banks were those that took zero fat tail risks. But those who took such risks often perished, and this was especially during the 2008 crash.

This exposed me to a whole new field called "complexity theory." To this very day, most Strategy and Management Consultants are typically hired to address or solve a particular issue — approach problem-solving for organizations and businesses by assuming that organizations are linear systems. In linear systems, the traditional approach, called "reductionism," is to break down large problems into smaller ones, solve them individually, and then assemble them back together as if in a single linear system.

Although reductionism has its merits, it is no longer an adequate method of assessing and facilitating organizations. My friend's experience opened my eyes to how wrong this approach had been. The reason is that organizations — and modern ones in particular — are not linear systems but complex systems, which means that they have to be studied, analyzed and interacted with differently.

The main idea behind complex systems is that the ensemble behaves in ways not predicted by its components. The interactions matter more than the nature of the units. Examples of complex systems are the climate, the human brain, and the global communication network. Another one is ants. Studying individual ants will rarely result in a clear picture of how an ant colony operates. To achieve that, one needs to analyze an ant colony as a whole, as an entire ant colony, and not merely as a collection of individual ants.

Another example of a highly complex system is the human body. Having so many components and all of them essential, means that one or a number of them may malfunction and therefore affect the whole in a bad way. One such problem is depression. People diagnosed with depression are often treated with medication. Sometimes this works, but not always. This is because, in complex systems, a one-size-fits-all solution isn't the best option. If the cause of someone's depression is some chemical imbalance in the brain that can be addressed with medication, then this solution may work. However, the cause of depression may be rooted in other things, such as trauma, drug or alcohol abuse, side effects from other medications, poor diet, underlying health problems, or a combination of multiple factors.

When I learned more about this, I started experimenting with systems thinking as an alternative and enhanced method to traditional management practices. The results were astounding. Not only was I able to secure and achieve better outcomes in my work as a Strategy and Management Consultant, but the achieved results were also more stable.

What happened to my closest friend shocked me — first negatively in rainy London and then positively on American soil — and made me dive deeper into the world of complexity theory and power laws. This changed my life. It not only altered the way I address challenges in my own life, but it also transformed the way we, as a boutique consultancy, shape and offer our services. We modernized our systems, improved our services, and refined our strategy for the way we advise our clients, taking into account the complex systems of their businesses and their environments.

If you're curious about implementing systems thinking in your organization, I suggest you check out my other articles to learn more:

How to Apply Systems Thinking in Running and Managing a Business

How to Think in Complex Systems

References

Penn, E., & Tracy, D. K. (2012). The drugs don't work? Antidepressants and the current and future pharmacological management of depression. Therapeutic Advances in Psychopharmacology, 2(5), 179–188. https://doi.org/10.1177/2045125312445469