Change the System? Or See Opportunities?

Over the last one hundred years, there have been numerous attempts to change our political and economic system. In the early 1900's, there was the Progressive Movement. The 1930's saw some changes. The 1950's saw other changes. Every time that we ran into any trouble, there has been a push to change the system. With the current troubles, we see more calls for change.

A recent book by Umair Hague, The New Capitalist Manifesto, offers more than a simple call to change. Unlike many of the previous voices, Hague calls for a reevaluation of what it means to be capitalistic. Unlike many idealistic movements (that ignore human nature), he recommends that we revisit what it means to be in business when the underlying business climate is changing.

Our world is changing. We were in a period of time where industrial and intellectual advances gave us an economy that seemed unlimited. We have been in an era where we didn't need to worry about the total life cycle costs of our resources nor about running out of them. However, we are running into limits today and some say that we have reached the peak of oil production for the world.

Western Civilization has gone through energy crisis after energy crisis going as far back as the switch from wood to coal. Each time, we have had periods of intense innovation and creativity. However, in each crisis, a number of companies have disappeared.

What Hague's book does is to point out new ways of approaching corporate management so that corporations can deal with the new situation we find ourselves in. He suggests that we need to identify how we can profitably operate in a world where limits exist. In each of his examples, companies have gone beyond looking at the short term financial viewpoint to seeing how a shortage can yield a competitive advantage.

When properly approached, a shortage can yield more than a simple short term advantage. The classic short term advantage is when you are the only owner of something that everyone else needs. However, that always fails at some point in time.

As a strategy, recognizing that a shortage is happening can mean developing alternatives to that shortage. It could also mean designing products or services that do not need that shortage. Or when there is a shortage of buyers, seeking out new ways to make things so that they would be available to more people.

Shortages can be an opportunity for creative exploitation.

Do you know where the pipes are?

During the Egyptian crisis, the government in Egypt managed to pull down the Internet. The way that they did it is interesting because it illustrates some of the risks that we take without realizing it. The government was able to pull down the Internet because they had managed to keep the number of pipes into the country low and they knew where those pipes were. Most of the international traffic went through one building in the heart of the country. The government was able to stop all traffic flowing through that one building and thus, stop the Internet from functioning.

Even though we think that different parts are not interconnected, often, under the covers, they wind up being interconnected. For example, in Egypt, the reason why the local traffic stopped once the connections to the outside world were stopped is that much of the local traffic still relied upon outside servers for some basic functions such as converting the .com into the proper IP address. While basic internet communications within the country had not been stopped, the ability to find where to send that basic communications was lost.

Disasters often have secondary results. We don't know when the interconnections have been broken in ways that will prevent us from operating. The same thing happened in Texas in the recent cold snap when multiple power plants went down because the cold had put such a demand for natural gas that the power plant couldn't keep operating. What was designed to work properly in extra hot weather failed in the cold.

Japan had far more redundancy and so lost only about 100 out of 6,000 prefixes due to the earthquake and most traffic was slowed down by 10%.

Risks:

If you are using solid state drives, be aware that the current drive technology does not allow the drives to be totally erased. Even after trying many techniques, up to 75% of the prior material can be accessed.