Monday, June 15, 2009

The Beginning of the End of Business As We Know It

Umair Haque, Harvard Business Publishing

What business are we in? Thanks to Ted Levitt, that's the question most boardrooms ask to kickstart some insight. Today — fuggedaboutit.

Here's the question every boardroom should be asking instead: is this the beginning of the end of business as we know it?

Yeah, I know. End-ism is over-rated. But perhaps it's worth considering a point for a second.

Perhaps talking about discussing, studying, or even thinking about business is less and less meaningful. Why? The economy is now in a state of total institutional collapse. Obama blew it. The numbers won't show it for a while, but the incentives for anyone to invest — rather than speculate — just died.

Business needs an institutional infrastructure — relatively voluntary exchange, some level of ownership, some measure of expected honesty, some kind of market efficiency, and investment with a horizon greater than nanoseconds.

None of these exist anymore. And they're not, barring a miracle, coming back.

So what we are left with are the institutions not of economic democracy, capitalism, or socialism — but of feudalism. In feudal systems, "business" doesn't exist. Patronage does.

That's exactly what's happening, for example, here.

Can we escape this death-with-a-whimper? Perhaps. Perhaps by innovating who we are — now just what we do, what we offer, or who we serve — we can build a better kind of business. I call that stuff behavioral innovation — you can check it out here.

Maybe it's all a bit less dire than it sounds. But my gut — and my analyses, usually fairly accurate — tell me the opposite.

Feel free to challenge, disagree, criticize — fire away in the comments. But do so thoughtfully (not: "business is gonna be around because it always has been, dude!").


Umair Haque at BRITE '09 conference from BRITE Conference on Vimeo.

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