This is an important question, but not popular.
Everything in nature operates in cycles, including us and our businesses.
Like us, businesses can hope for a good end, or a bad one. Moreover, for our businesses, we can choose.
When, where and how.
A good end might involve all stakeholders missing it fondly, remembering the good times, appreciating what it did for them and their community whilst recognising it was time for it to go.
A bad end might involve all the pain of administration, the angry creditors, the surprised, distressed employees and a gap in the High Street or Business Park like a missing tooth.
Every business plan has a heading “exit strategy”, and that will normally involve excited imagery of an IPO, or a Trade Sale, with happy investors. In reality, most exits are nothing like that.
Any responsible business could plan for it’s own demise. A sort of terminal contingency plan for a good end. We don’t, largely due to the mixed blessings of limited liability. It is much more profitable for investors to leave the scene of the accident.
Business failures are as destructive as they are because of the collateral damage caused by lack of preparation and awareness. They were costing the economy over £33bn in 2016. I can only imagine what 2020 will look like.
for all the King’s Horses and all the King’s Men (and everyone else)
Covid has turned many things upside down.
I recently wrote about how we might start thinking about how we choose our own leaders.
I’m now suggesting that we might want to think about our businesses in a similar way. What might that mean?
- That the subject of endings becomes a respectable topic. A business can only adapt so much. At some point in time, it ceases to make best use of the talent available to it. It may be much easier to create a business that has a strong digital profile than convert one with analogue culture and skills.
- That learning and development becomes central. Both business and those in them need to keep their skills and capabilities at the forefront. Training for skills when their absence is noticeable is way, way too late.
- Learning to have conversations that matter. That a business fails is rarely a surprise except to those inside it. Wilful blindness and a tyranny of tolerance ensure that. Using critical thinking and external perspective to check health is as vital as it is painful.
I suspect that we are now entering an important phase. for the last three months, in many ways we have been holding our breath whilst the Government propped up Humpty 1.0 model of “infinite growth” for the disproportionate benefit of a small minority.
We are now watching as all the King’s horses and all the King’s men try to put Humpty back together again. It’s not looking good. Humpty 1.0 had been wobbling for while, rocked by a series of crises and a decreasing moral legitimacy.
There is much talk of “Build, Build, Build” and “Build Back Better” (This Government does like Alliteration) without any specifics or even vision as to what “Better” might look like.
Those heavily invested, financially, organisationally, and connectedly would clearly like an improved version of 1.0, but with maybe a little more yolk, a little less white and a stronger shell.
The rest of us would perhaps like to see something different. Multiple Yolks perhaps, and something less fragile. A better risk assessment. Sitting on top of a wall? Really?
It’s going to require courageous decisions, and the curiosity to see where the opportunities might be.
We will have a large number of talented people out of work as a result of 1.0’s mishap. That said, the skills they have, the ideas, and the connections are still there.
With Climate Change already very present, the opportunities in the regenerative economy are inconveniently huge (see John Elkington’s “Green Swans”) for Humpty 1.0. It makes chunks of it not just obsolescent, but obstructive.
The challenge now is for us to connect them, and that will require some real changes.
The more I look at it, the more important and complex the idea of Balance is, and the more vital to understand its implications for each of us.
I’ll make Balance the subject of a second part to this post tomorrow.