From Growth To Survival And Then Who Knows?
Hidden Harmony Within
As a teenager I had the habit of asking myself odd questions. One of the most enduring of those “questions to myself” involved asking if there was some possible mathematical order to hideously complex physical phenomena like smoke rising from a cigarette. My question remained unanswered for decades until in 1987 I stumbled on Edward Gleick‘s now famous book, Chaos Theory. All was mind-bogglingly revealed. There was order in all chaos. Over the years I have continued to be fascinated by the concept of chaos theory, “strange attractors,” and their application to a myriad of things, particularly computer graphics and stock market behavior. Later, I also discovered interesting links to human behavior and economics, which had been discussed and published decades earlier at the beginning of the 20th Century. I am talking about Joseph Schumpeter and “creative destruction.” The Economist magazine dedicates an editorial page in his name, and the New York Times has recently written on the importance of his ideas on capitalism. Essentially, Schumpeter insisted that “Economic progress, in capitalist society, means turmoil.” We have that situation now in spades. It is also clear to me that he was arguing that chaos is good fertile ground for the creation of new enterprises never before envisioned. He was saying that chaos in the economy was necessary for normal orderly progress. The trick is to figure out where to look.
Schumpeter’s point has been proven repeatedly. His idea’s relevance to 21st Century entrepreneurial creation, revolution, and destruction seem to be as relevant as ever to the current global economic crisis. Add to that the recognition that the rate of change in the corporate life-cycle has accelerated exponentially in the last few decades. Corporations like IBM and General Motors are of a group that has taken decades to arrive at later corporate maturity. Now compare and contrast the current situation, where unicorns that have spent Billions, yet not made a penny, are nevertheless facing possible extinction on the scale of Lehman Brothers $691 Billion failure. Recognize that GAFA and Big Tech generally, with their vast resources, will be “accumulating” their advantages in markets. We have already seen announcements in this regard. Big may get much bigger, and become a serious threat to entrepreneurs. It is yet to be seen if it will be a big factor out of your control, or whether monopolistic trends will be reigned in. I predict that social entrepreneurship will become a major new economic growth factor. It’s a strange new world out there, but one that Schumpeter would have embraced nonetheless.
A Glass Half Full
My point here is to emphasize that the current turmoil and chaos is more of a glass half full than a glass half empty, even though half the water has sloshed out. Simultaneously the challenges of exploiting the opportunities are greater than ever seen before. The half-full glass also implies that there may not be enough luck to go around. It’s a double edged sword situation, that only a few small entrepreneurial companies may be positioned to exploit. The key to succeeding will be a combination of strategic vision, real hands-on leadership skills, the resources to survive, awareness of the rapidly changing environment, nimbleness, and a shrewd sense of when to take calculated risks. Only a select few will have it all. Many will fail and fall by the wayside.
Winners, Losers, and Being Human
To be sure there are going to be winners and losers. As happens in extremely difficult times, for many of those failing and losing, it will happen through no fault of their own. Before she passed, my mother shared with me some of her memories of the Great Depression. It was ugly. I also remember that she had the habit of not throwing things away. The refrigerator was our family “science project.” She also habitually turned off lights. These things were legacies of her experiences in the Great Depression that stayed with her for her entire life. As I look forward from my vantage point, I want every entrepreneur to survive and to come out on the other side to succeed and/or re-invent themselves and their companies. I also know realistically that is not likely. So my takeaway from all of this is that we all need to relearn the life lesson that “greed is not good,” and that caring for others, and social responsibility are our primary duties as human beings. To do otherwise, jeopardizes the social order we need in order for our global economy to thrive.
David Mayes
I would like to hear your feedback on my thoughts. I am available via contact us on this website, or by scheduling a time to chat by clicking here: Livestorm Meet.
