A View from The Prairie, 2020

January 2020

Stability and Disruption

So often we want a stable environment. However, humanity has experienced far more chaotic environments than stable ones. Often, we have a period of stability and then an "avalanche" of everything breaking down. The latest trend in venture capital is to invest in "disruptive" companies such as Amazon and Uber. We do better when we plan for both stability and disruption.

Brexit Opportunities

England is in the middle of breaking free from the EU. It happened at least one time before (in 52 AD). Brexit is part of the global "let us go back to how things were before". But that is not possible and offers opportunities and grave risks.

Fraud in the Art Market

In the past, churches in Europe were filled with "relics" and churches competed on how many they held. Folks would go on pilgrimages to visit these churches. Have you ever wondered how these were acquired? When the Europeans showed up in the Middle East with money looking for "relics", they ran into the problem that not many actually existed. But there were hundreds of craftsmen willing to make fake relics for them. Today is not much different. Art fraud exists throughout the industry. Where there is a market, there are fakes. Over time, fakes drive out real.

Solve Wicked Problems

There are many "Wicked Problems" out there. A "Wicked Problem" is one where we can't know all the parameters, all the ramifications, or even all the ways to solve it, but are problems that real people have. There are formal definitions of "wicked problems", but the best way to describe them are that they are the result of other problems. Thus, there are no clear solutions, no way to tell if we have properly solved them, we may have conflicting information about the problem, and no way to do a test case first.

Command or Leadership?

Panic buying, people hiding in their homes, and yet, others totally ignoring all the containment rules. What we see are two different reactions to governments attempting to control a situation. It all comes down to whether or not people believe the leaders and their message. We see the same things happen in business - people following the leaders or doing their own thing. We can choose to command or to be leaders. History shows that it takes more time and effort to be a leader, but the results often are better. Leadership is built upon a foundation of honesty and integrity.

Organizations and Diversity

A recent finding is that companies with more diverse boards are generally doing better than the rest of the companies. Part of the reason is that the diversity is bringing needed difference of opinion to top management. It doesn't work to simply add token outsiders to a board. The goal is to have a diversity of ideas and experiences that are heard and accepted.

Recovery Challenges

With how fast the world economy collapsed, there are those who hope that the recovery can be just as fast. However, the recovery will be slow and different from anything we have seen before. Those organizations that thrive in this new environment will be those that are constantly experimenting, the loosely coupled, or those that can survive on just the basics. Instead of comparing the situation to a speed bump on the highway, this is more like what happens with a major hurricane.

Resilient Organizations

When the world is falling apart, the organizations that survive draw on their resiliency, not any of their other strengths. So, what is resiliency in a business sense? It is built on the trust that the people have in the business. It is based on a deep acceptance of reality, a belief that the organization has enduring values, and the ability to improvise and change on the fly. All of these are needed in the current situation.

Hang together

After signing the Declaration of Independence, Benjamin Franklin supposedly said that "we must, indeed, all hang together or, most assuredly, we will all hang separately." That saying has passed down as an affirmation of how we need to work together as a nation or the nation will fail. The same is true in business. It is especially important when everyone has fears.

Fears are common today. The pandemic is striking seemingly at random. As we isolate, the fears get worse.

Survivor Pride

When some of the first colonists reached the Americas, they found recently empty villages. Others met the Native Americans and watched them die of imported diseases. We know of "survivor guilt" which happens when people watch others die in a battle or epidemic and they lived. The other extreme is those who see others die and figure that since they lived, they must be someone special and deserve special rewards. This is "survivor pride".

Mixtures are More Resilient

Purity is nice, but a mixture is more resilient. For example, the Parker Solar probe would have burned up if it were made from pure elements. Pure substances are almost always less resilient than a mixture. In business, the same is true: a mixture of people while less efficient, is more resilient. Many businesses say they value diversity, but do not have the structures in place to achieve the diversity they want. Part of the problem is that diversity costs and the benefits take time to be realized.

Separation and Solitude

During the current situation, a lot of workers are working from home. That generates some separation. Some are in solitude and others are surrounded by their families. The challenge is to make sure that the teams continue to work together and the cross-team interactions happen. There are costs and benefits from all this "work at home".

Fog of Covid War

Writings about war always mention the "fog of war". This fog comes from a lack of information, wrong information, and the mental slowdown that happens when dealing with sudden surprises and situations not planned for. Right now, we can find a lot of people suffering from a mental fog because of the current situation. We suffer from a lack of good information, a lot of misinformation, and surprises. To cope, we are forced back to our basic beliefs, our planning, and how well we can learn under stress.

Leadership Pulls Together

In times of trouble, leadership pulls the team together so that we have a consistent and coherent response to that trouble. Divisions often sink the organization. Great leadership pulls enemies together for a common goal.

Dance and Turn

We can watch ice dancers race, turn, and pivot as they try to make beauty on the ice. Each individual or team has a different set of moves and different music that they dance to. Businesses all over have the same opportunity to race, turn, and pivot to find new ways to profit during times like now when what has worked in the past no longer works. The next few years will continue to have rapid changes because of debt, generational changes, and more. We will have to continue the dance for years. Yes, we are in rapid changes.

Be the Best Version of Yourself

We all are getting tired. We slack off, give up hope, and stop trying for the best. Sometimes, it can be so easy to just go with the flow of those around us even when that flow is harmful or winds up at the wrong place. We are called to be the best we can be. But we are human. We fall down, we fail, and we don't meet the hopes of those around us. But as we strive for the better, our failings fade away.

Order is an Illusion

We want order in our lives. We flee war and disruptions. Our businesses operate far better when everything is static. But order is an illusion. Instead, we have periods of order in a very disordered world and that order can quickly break down. The more complex our world gets, the more fragile it becomes. We do better to accept the chaos, ride the waves, and look for how to profit in disorder.

The Value of Failure

Many people who have built successful companies have a history of failure prior to this success. They claim that they would not have been able to build this success without those prior failures and learning from them. Failure we learn from has a number of benefits: failure tells us what doesn't work, failure prunes distractions from our focus, and teaches a number of valuable lessons about what really counts in business. Most people need to fail and a new business mantra is "fail fast, fail often".

When will the party end?

Are we having fun yet? A waggish saying is "A fool and his money are some party." But what happens when it is someone else's money? Who stops the party? A number of businesses have been having parties on someone else's money. Many of them won't be able to make money when money flow is stopped. Some are trying to balance selling short term and buying long term which means they are taking on a lot of risk.

Character Counts

What is most important in business? A while back, the motto was "Greed is Good." And we were left empty both in spirit and in wallet as the market crashed. To reclaim what is noble in business, we have to go back to first principles and acknowledge that there are higher values than making a lot of money. Living by values develops character and our character counts.

Are you listening to truth?

We want to find truth - especially truth about the future. Yet, very few people want to speak truth to power. People have trouble telling the truth because we filter events through our beliefs and often will believe lies. We need to listen to truth to be on the right side of events. Leaders who listen to lies take the organization down the wrong path.

Never Stop Learning

This year made it clear that our markets are constantly changing. What our customers need changes every year, but this year has been more dramatic. While many have called for a return to yesterday, we can't go back. Companies that have tried to hold on to the old ways are going under. Never stop listening to the client's real need.

Time to Let Go

No matter how highly we value something, there always comes a time when we have to let go. We start companies but have to let go of doing all ourselves in order to let employees grow. We push ideas and have to let go to let others implement them. We have children and have to let go so that they can spread their own wings. We always have to let go in one way or another.

How to tear apart an organization

Sometimes, we get to watch an organization tear itself apart. It can be tough to watch when we care about that organization. Yet, many times, we are powerless to prevent it as the people in charge are doing the actions that would tear apart any organization.

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