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!").

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

Snap Shot of the Future

A client of mine asked me for a quick snap shot of the future. This is what I gave them:

Thinking and writing about the future is a lot like groping around in a heavy fog. Shadowy images appear and are identified as objects familiar to the observer. As the shadows draw closer, what the objects appear to be often shifts and are named something else. When a shadow is touchable, there is often no name for the object because it is new to experience.

So, when asked for a snap shot of the future, I can only express in the words I have now, how that picture appears to me, and the viewer, through the lens of their experience, has to understand what the picture means.
With that preamble, what do I see?

Disruptive innovation: Sustaining innovations improve the performance of existing services. Disruptive innovations generally result in worse performance. However, they bring to the market a different value proposition than had previously been available. Disruptive technologies almost always result in the demise of the leading organizations. The information technologies have resulted in a lot of sustaining innovations in the past, but they are now introducing disruptive innovations in almost all industries.

Complexity: Things now are more complex. This isn’t just a truism. I’m using complexity in the mathematical sense. In a complex system, there is no correlation between cause and effect, but the past matters. Complex systems are in non-equilibrium. A small change can cause no result or a massive change. Within complex systems, you cannot predict the future. The best you can do is describe statistical probabilities of an effect, if you have a long history on the system. As most markets and people are complex systems, complexity is a threat to the destruction of a lot that we take for granted.

Systems: Everything will be perceived as a system. Old systems of organization (people, work, information etc) are being replaced by new systems. Of particular importance is the emergence of systems of intelligence (as new ways to organize information) and open collaborations (as new ways to organize people and work). Both of these are threats and opportunities.

Perception: Our perceptions are being shifted by the technologies we employ. This is resulting in new conceptions of reality. We’ve had three major epochs of perception in the western world – pre-literate, literate and now post literate. In the literate society, the visual sense dominated. The characteristics of a post literate society will in some ways be similar to a pre-literate society. What drives the similarities is that a pre-literate society was shaped predominately by the hearing sense while the post literate society is driven by both the hearing and visual senses, but the visual sense information is being processed like the hearing sense. One of the major perceptual changes is that we will sense everything as field (mathematical). (An example: Instead of perceiving a group of people as a network with interconnections, we will view them as system that creates a field.) Describing the characteristics of something driven by the media is not an exact science. It is impossible to escape the impacts of the media themselves in attempting to describe their impacts. We are truly inside the jar and trying to read the label. However, organizations and individuals that do not attempt to perceive the new reality will become irrelevant.

I also gave them some information about how each of these could impact their organization.

Disruptive Social Innovation

Powerpoint presentation by the Disruptor's for the session 'Disruptive Social Innovation' - Chain Reaction 2008

The Disruptors

View SlideShare presentation or Upload your own. (tags: chainreaction08 disruptive)

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The original by Karl Fisch & Scott McLoud.