‘Not drowning but waving’: Businesses must change to survive in a changed world
The smooth running of commercial markets depends on consistency of consumers’ behaviour; the major problem facing business everywhere now is the rapidly changing consumer mindset.
YOU could be forgiven for thinking that business is drowning given today's myriad problems. But, unlike the victim in Stevie Smith’s famous poem Not waving but drowning, business doesn’t drown. But it sure is waving right now.
All businesses face headwinds from time to time and many have to change fundamentally or go bust. For those that survive, it is a universal truth that whatever their rescue mode, other people will have helped. Sometimes problems can be overcome by changing the purpose of the business. At other times they need support from shareholders, from competitors, from governments.
The smooth running of commercial markets depends on consistency of consumers' behaviour. When something upsets that, margins get artificially bloated or battered. Forecasting, which depends on continuity, goes awry, and demand, production and distribution chaos incites competition.
Hope amidst the gloom
I have reversed the title of Smith’s poem in the hope that we can glean some optimism from the gloom and that the signals in the waving can be read helpfully.
Every business has a purpose. Those who say that its purpose is to make money miss the point. If a business’ sole purpose is to make money, it would be in gambling, the sex trade, pornography and all the businesses that create the conditions for mob behaviour and inhuman lack of law and order.
Some businesses get close to that sort of extortion. Managing them requires the bosses to lead lives we mostly don’t want to be associated with. They may succeed in producing wealth but they don’t allow a life pattern that we wish to copy or that we could be proud of as a testament to our efforts to make humanity a better and fairer place. ‘Honest’ may seem a dated aspiration to some; fortunately, the majority still want to be able to add it to their list of achievements.
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Wealth became important as the measure of a business person’s success switched from fulfilling the primary purpose of the business to competitively creating wealth for an individual, for a family or for someone / some trust other than them. As this began to happen the competitive aspect of business started to include the repression of the competition, often seen as labour working for the organisation or others with the same purpose.
Collusion between the successful businesses encouraged the limitation of competition - it is sometimes easier to stifle competitors than to beat them. Governance demanded that such restrictive practice was unfair and it was outlawed when it became noticed or rife. The net result of a partly-governed society is widespread disparity of personal resources as we have seen in the last century. The governance of business has had some success but not always what was intended.
Disruptive problems
Problems that were latent in the last century have become seriously disruptive. World population growth, with its threat to food and energy supplies, has precipitated the need for every country to acquire more land - now clearly the most important form of tangible wealth. Close proximity living is producing illnesses capable of wiping out major tranches of the race. The climate is turned hostile by the demands made on the planet's resources.
World finance is heading for the brink of collapse due to over-mortgaging the future. Systems of living together - politics - each want to dominate what is one day likely to become the world model for governance. Despite all these threats, humans seem to have little greater wish or ability to live harmoniously together than when occupying rival caves on a mountainside.
The major problem facing business everywhere now - even where businesses are flourishing as a result of the recent disruptions - is the rapidly changing consumer mindset. Across the span of societies, from the wealthy to those near or at starvation point, consumers are both better and worse informed than they have ever been before.
The internet and the mobile phone have precipitated the greatest change in the distribution of information that humanity has ever seen. Unfortunately the data transmitted can be true or false. Simple information like the prices of products and services is available instantly to all within reach of a receiver whether personal or communal.
Google opens the Pandora’s box of everyone’s life. More complex information would be equally available but for the fact that the length of the messages people are now prepared to read and comprehend has been greatly reduced.
Mischief managed?
Mischief makers use the same media as everyone else to transmit false information. Their skilful adoption of creative promotional ideas and language lulls many people into a false sense of security. This leads to the widespread fraud and bank theft now wrecking so many people’s peace of mind and daily lives.
On a less dramatic but more invasive level, watch the number of commercial messages today quoting the phrase “up to 99 per cent more/off/less”. It is, of course, a meaningless phrase but it has a ring of scientific proof that can mislead so easily. It is no improvement on the old ad-man’s “Tests prove…”.
‘Fake news’ is now such a large part of our lives that we are beginning to lose trust in any statement not authenticated by increasingly forgettable cross-checks. Just when life ought to be becoming simpler and more enjoyable it is, for many, becoming more complex and rather less fun.
What can be done to improve this spiralling situation? And who should do it?
Existing territorial rivalries pit different regions of the world against each other. Ideological differences are reflected in countries competing to be the richest, fastest growing, smartest, most sporting… and so on.
Attempts at world cooperation such as the original League of Nations, the United Nations, the World Health Organisation and many other bodies aiming at being cross-border cooperative ventures, have made stirring efforts to make us think like a single humanity. For all the progress achieved, we are nowhere near behaving like that yet. Political cooperation has not reached the point where the threats of climate change, financial ruin, overpopulation and nuclear war should have driven us.
Education and business to bring the world together
The medium-term need is, of course, education. Our education system is simply not equipped to bring about the level of intellectual development needed. An increasing world population makes it difficult to see how that can be remedied unless two things happen.
First, the question of today's purpose for education is thoroughly re-examined and the resources needed to fulfil a very different role are made available. Even if this is achieved the time it will take to filter through will be at least one generation - twenty-five years.
Second, the system of governance not for a country but for the world needs to be put on a basis where everyone regards himself or herself as responsible for electing capable and decent people to see the fair play now lauded by many and ritually ignored, often by the same people.
What is the role of business in all this? It is to realise that businesses are the only truly effective international organisations. Where individual countries' governments must compete to win the votes of their electorates, businesses may compete to serve humanity as a whole.
But businesses are also run by people and need proper discipline to prevent fraudulent behaviour. Indeed, the whole concept of capitalism needs to be rethought. If you watch how the business world is gradually becoming responsible for handling the major threats to humanity you will see that this is already starting to happen.
Governments should encourage this and not shy away from this new role that business has to play. It is the section of society with some of the best brains, with the wealth needed for the job and with the motivation to get on with it economically.
Business isn’t drowning, but we would do well to heed its wave.
The writer is founder and chair at Terrific Mentors International
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