By Stuart Umpleby
Research Program in Social and Organizational Learning
The George Washington University Washington, DC 20052
URL: http://www.gwu.edu/~umpleby
September 7, 1999
Prepared for the “Before Y2K”
Conference held at
The George Washington University, September 10, 1999
Abstract
Although the year 2000 computer crisis is unsettling in that it creates great uncertainty, for social scientists it presents a unique opportunity to test theories and methods. This paper is one of several papers in which social scientists predict what they think will happen and why. At a second conference in April 2000 we shall compare the predictions with events. Those engaged in efforts to increase awareness and to prepare organizations are being asked to describe what they did, why they chose the methods they chose, what they expected to happen, and how their expectations were confirmed or refuted. Furthermore, this might also be a time to reflect on the proper role of universities in encouraging the general public to prepare and to reflect on the experience. By taking an experimental approach to y2k, we could greatly increase our understanding of social systems.
This paper discusses a number of theories from
several fields which shed light on some aspect of the y2k phenomenon.
It also contains a set of predictions based largely on widely referred to y2k
assessments, and a report on my expectations both confirmed and refuted.
RELEVANT SOCIAL SCIENCE THEORIES
Psychology
The theory of cognitive dissonance (Festinger) helps to explain why people have been slow to act on the y2k threat. Y2k is a threat unlike any we have experienced before. The closest parallel might be the use by the Romans of lead pipes for carrying water. Never before has the technology which we rely upon for a high standard of living threatened to bring about global social, economic, and political disruption. Cognitive dissonance will also be a factor after January 2000, for those people whose forecasts of the future did not come to pass.
Solomon Ash conducted experiments on social stress. For example, in a classroom of students he drew three lines of different lengths on the board. He told everyone in the class to say that the line of middle length was the longest. He then brought in a student who had not been given these instructions. He went around the class asking which line was the longest. The original students in the class all said that the line of medium length was the longest, and 70% of the time the naïve student went along with the group. Only 30% of the time did the student not in the original group say that his or her classmates were mistaken. This theory is relevant to the way that governments are dealing with y2k. Governments are putting the most optimistic face on y2k status reports. These reports are diminishing the credibility of those who are advocating that citizens and communities prepare. They are also creating doubt in the minds of activists that preparation and community participation are in fact needed.
Irving Janis’s (1982) work on groupthink shows that once an authoritative position has been defined, the members of an organization are reluctant to speak diverging views. Albert O. Hirschman’s book Exit, Voice, and Loyalty defines the alternatives that are available to employees whose views differ from the authoritative view.
Gregory Bateson’s theory of “double bind” can be used to explain the dilemma of those who feel that y2k will be more serious than official estimates. If an activist speaks out against the official line, he or she risks being labeled as crazy or a troublemaker. If the activist does less than he thinks is needed, then he is increasing the danger that disruptions will threaten his family and community.
In addition to academic theories there have been efforts by y2k activists to characterize the way different people react to y2k. Sally Strackbein has suggested that there are “tree people” and “forest people” from the saying, “Some people cannot see the forest for the trees.” Tree people focus on the details of fixing computer code. Forest people worry about societal implications. My conversations about y2k have led me to believe that there are three distinct time intervals for which people choose to prepare. A small group of people attempts to assess the threat and then chooses to prepare for the worst, as a precaution. A second group acknowledges the threat and then decides to prepare for about three days of disruption, since that is easy to do. Finally, most people decide to wait and see what happens. For this last group, y2k may change only the verb tenses: From “that could not happen” to “this cannot be happening,” to “that could not have happened.” My impression is that many people will be struggling to understand y2k even long after it happens. Attempts to persuade these people to seek to understand y2k before it happens are largely fruitless.
Management
It is commonly observed in writings on organizational behavior that good news travels up the chain of command faster than bad news. A variation on this phenomenon is that reports tend to become more optimistic as they travel upward. Many consultants have observed that assessments of y2k readiness become more pessimistic as one goes down in an organization.
In the field of software engineering, according to Ed Yourdon, Barry Bain wrote his dissertation on why software development projects are usually late. Many possible causes were investigated – organization of the projects, the personality or training of the manager, funding, planning, etc. Overwhelmingly the most important factor was when the project started. That is, projects which start late, finish late.
Fred Brooks (1995), known as the “father of the IBM system 360,” wrote a book with the title, The Mythical Man-Month. In this book he proposed “Brooks’ Law” – adding people to a software development project delays it. Since the deadline of January 2000 is fixed, currently the violation of Brooks Law is the nearly universal “solution” to the year 2000 computer crisis.
The literature on strategic planning does not easily encompass y2k contingency planning. The strategic planning literature assumes the infrastructure will work. It assumes that the number of consumers, suppliers, and competitors will remain approximately the same. Attention is usually focused on maintaining or increasing market share, not with providing a minimum level of services in the event of major disruptions.
The vast majority of the management literature is aimed at optimization. By squeezing even a small expense out of a large process, operations researchers can save a company millions of dollars a year. Comparable attention has not been given to resilience – the ability of an organization to respond effectively to unusual disturbances. Just in time inventory practices is just one example of a highly effective optimization method which can lower the resilience of an organization.
Political Science
Political leaders have not done all they could to warn the public to prepare for y2k disruptions. The most widely cited explanation for this policy is that public officials fear “public overreaction.” Other explanations are that officials fear a loss of confidence in the economy, which would mean that less money would be available to make repairs. Other explanations are that political leaders fear a loss of control, or they genuinely believe that there will be little disruption and that most equipment will be fixed in time.
One of the intriguing y2k phenomena is the wide variety of ways that the official spokes persons “spin” the status reports. The most common pattern is for a report containing alarming information to have an optimistic, calming executive summary. Another government action to shape opinion has been to shorten the time period for which people are advised to prepare in the event of a disaster. Until recently U.S. government agencies have advised citizens to prepare routinely for three days to two weeks of disruption in case of natural disasters such as floods, hurricanes, earthquakes or tornadoes. These websites now recommend preparing only for three days in the event of y2k disruptions.
One way of dealing with uncertainty about what will happen is to define a variety of scenarios. Peterson, Wheatley, and Kellner-Rogers (1998) have used two dimensions to define four possible scenarios. The two dimensions are few failures vs. many failures and social coherence vs. social collapse. Michael Marien (1999) has defined two additional diagrams. In each diagram one dimension is few failures vs. many failures. In Marien’s first diagram the second dimension is no other major disturbances vs. some other major disturbances, such as a worldwide financial crisis. In his second diagram the second dimension is minimal global preparation vs. coordinated global preparation. Such diagrams help to organize the range of possibilities that planners need to consider.
Y2k may easily threaten domestic public support for the political parties currently in power. Ed Yourdon (1999) has suggested, “y2k community groups represent an embryonic populist movement that could become the foundation of a major shift in political power if y2k goes badly.”
Economics
Joseph Tainter’s (1988) book The Collapse of Complex Societies suggests that as societies become more complex, additional complexity produces diminishing returns. Eventually the added complexity cannot be sustained and the society collapses. As a society collapses, it falls back to a previous stage of development. If there is not support at the previous stage of development, the society falls back to still earlier stages of development.
There has been speculation over whether y2k will produce inflation or deflation. Most likely that it will produce inflation in essential goods, and deflation in luxury goods.
The usual positive feedback of economic growth will be reversed. Rather than increasing amounts of investment, employment, and consumption, instead we shall probably see increasing numbers of business bankruptcies, greater unemployment, and reduced demand for goods.
Karl Mueller (1998) claims that y2k is the first really serious crisis of an information society, a crisis that is global, severe and not transferable in time.
George Soros (1994) maintains that gaps between perception and reality appear from time to time in both financial markets and political systems. When a gap becomes large, one can predict that the gap will not continue indefinitely and that perception and reality will eventually come closer together. Currently y2k and non-y2k views of the future are far apart. As this gap closes, there is the possibility of a collapse of financial markets and a collapse of confidence in governments.
Present economic theory assumes a return to equilibrium following a disturbance. When people with an economic background speak about y2k, one hears statements such as the following: “If there is a problem, someone will devise a solution, since there is an economic incentive.” “The managers of corporations are bright people. They will not let their organizations fail.” Contemporary economic theory assumes that there is time to devise a solution to a problem. The “relaxation time” or the time to return to equilibrium or the time to devise a solution has not been an important variable in economic theory. Y2k may increase attention to this variable.
Cybernetics
Several ideas in the field of cybernetics -- the science of control and communication in animals, machines, and social systems – are particularly useful when studying y2k.
The law of requisite variety, first postulated by Ross Ashby, says that the amount of regulation that can be achieved is limited by the variety in the regulator. It is a simple but fundamental principal of wide applicability. In the case of y2k it means that the amount of equipment that can be repaired is limited by the number of people available to do the work and the time available. If the time or number of workers is insufficient, the task will not be completed.
The principle of self-organization, also articulated by Ashby, says that every isolated, determinant, dynamic system obeying unchanging laws will develop organisms adapted to their environments. Y2K as a stimulus has produced a remarkable amount of self-organization. Families are planning together in ways they have not done before. New community groups have been formed and alliances and coalitions have been established. Task forces have been organized within companies and government agencies. Several new organizations at the federal level have been created. There have been regional meetings of country y2k project managers, and the United Nations has also organized meetings. Although new organizations have been organized at all levels of society, cross-level communication, for example between community activists and federal officials, has at times been difficult, no doubt due to different priorities.
The idea of self-reference – that statements reflect
the point of view of the observer—has been a key element in y2k discussions,
primarily in the form of self-fulfilling or self-defeating prophesies and the
idea that beliefs, real or imagined, are real in their consequences. At
the present time some federal officials are very concerned that even if there
are no significant disruptions, runs on banks or grocery stores could be very
disruptive. Other variations of the self-reference theme are the following:
1) If dire forecasts are made, people may feel more motivated to fix equipment
and make preparations, with the result that actual outcomes are not as bad as
anticipated; 2) Statements by officials that all is well and there
is no need for concern can create complacency and inaction resulting in more
disruption than might otherwise have been the case. The interplay between
reality and perception is widely discussed within y2k circles and is an important
contributor to uncertainty.
PREDICTIONS
In the U.S. the readiness of the various economic sectors
has been assessed at intervals for over a year by the U.S. House of Representatives,
the U.S. Senate, the General Accounting Office, and the President’s Council
on Y2K Conversion.
The Small Business Administration has surveyed small businesses, and the Securities
and Exchange Commission has required publicly traded corporations to report
on their progress in achieving year 2000 compliance.
In the US it now appears that banking, insurance, and financial services are
the best prepared, since they started several years ago. The Senate report implies
that millions of people in the US may be without water. In some areas
the telephone system will fail, some areas will experience electric power blackouts
or brownouts, and petroleum will be in short supply. About 40% of small
businesses have not started and do not intend to work on y2k before systems
fail. Many state and local governments have not yet started. The General
Accounting Office has estimated that about one third of federal government mission
critical systems will fail. The Senate report says that the health care
system is particularly poorly prepared. Nevertheless, government leaders
are saying that the nation is well-prepared for y2k.
Internationally the Gartner Group has surveyed corporations around the world, and the World Bank has surveyed governments around the world. Italy started its year 2000 program in January 1999. Many other governments have not yet started. In many countries in Latin America, Asia, and continental Europe only the largest companies are working on the problem.
Worldwide it seems possible that thousands of people could die due to the failure of water and sewage systems, cold, hunger, and civil disorders. As business activity is restored, there may be a massive transfer of wealth from non-compliant to compliant companies and countries. The number of business and personal bankruptcies will hit a record high. Governments will fall, and more radical groups may come to power. Some nations may break up into regions, at least temporarily, since communication and transportation will be greatly encumbered.
There will be humorous events as well. Currently almost all assessments are self-assessments. One result is that the number of “mission critical” systems is dropping while the percentage of mission critical systems repaired rises. Ed Yourdon has suggested that “mission critical” may come to mean, systems which are fixed. Hence, in January 2000 the federal government may report that all mission critical systems are ready, but the government is not functioning.
What will the business environment be like in January 2000? A business holiday may be declared to give businesses more time to fix affected equipment. Where phones are working, help desks may be overwhelmed with calls. Errors in orders, reports, and checks can be expected and, indeed, are already occurring. After inventories are used up, there will probably be shortages of some parts or supplies. Delays in receiving shipments can be expected. Employees may be unable to travel to work. Those who do show up may be distracted by family concerns. Some companies, which are behind in their y2k programs, are already being denied loans by banks, which are concerned about the ability of non-compliant businesses to repay their loans.
In many communities, organizing is already occurring
(e.g., www.novay2k.org). Local groups have formed into associations to
share materials and strategies (www.coalition2000.com). Meetings with
local officials are being held at regular intervals. Neighbors are teaching
each other how to store food. Churches are holding meetings to develop plans
to care for the old and sick. The President’s Council on Year 2000
Conversion is now arranging “community conversations” across the country
(www.y2k.gov/community).
EXPECTATIONS CONFIRMED AND REFUTED
The reports that have been published on how much equipment has been repaired roughly correspond to what I expected would happen. The U.S. has done about as well as I expected on fixing equipment. Many countries have made less progress than I assumed they would.
By September 1999 I expected that there would be more public discussion and more coverage by the press. Furthermore, I have been surprised by how many front-page articles have been written on the subject without it becoming a widespread topic of discussion in press conferences and on talk shows.
There is a general lack of understanding of embedded systems. People think that their PC will not be affected, because it is rather new. They think that they might have an error in a telephone bill or a bank statement might need to be corrected. They are not thinking that they might not have water or electricity for a period of days, weeks, or even months. They are not thinking that their employer might not be functioning.
I thought there would have been more leadership in terms of public statements from political and corporate leaders. I thought that by now quite a few companies would be claiming that they were compliant. It seems the fear of being sued has been a major inhibitor. Stock markets have remained strong longer than I expected. The apparent inability of people on Wall Street to understand y2k has been surprising.
The low level of discussion on college campuses -- whether initiated by faculty, students, or administrators -- has been a surprise.
For about two years a great deal of effort has focused on assessment, by Congress, the President’s Council, the World Bank, the State Department, the Gartner Group, etc. Attention has now turned to contingency planning and preparation, or, in the case of the US government, to statements that unusual preparations are not required. I thought the shift of focus to preparation would come sooner, in 1998 or earlier. In general it seems that people act when it feels comfortable to act, rather than according to a time frame defined by the problem itself.
Coping with the year 2000 computer crisis consists of two tasks – repairing or replacing equipment and making contingency plans. One cannot plan wisely unless one knows what to plan for. So, assessments are essential to effective contingency planning. However, most assessments have been self-assessments. Perhaps not surprisingly, they have frequently turned into language games. Optimistic executive summaries are attached to worrisome reports. For example, an executive summary may report that no problems have been found with nuclear reactors, but the body of the report says that the assessment of nuclear reactors has not been completed.
The internet has proven to be a great asset. Useful information can be shared very quickly. This has been particularly helpful since the commercial media seem not to know how to report on a hypothetical disaster (Samuelson, 1998).
Tom Atlee, a y2k activist, has said, “If life is
a journey to discover who we are, then y2k is when we find out.”
It seems certain that the coming year will be unusually educational.
REFERENCES
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