Seasons and Cycles

Whether nature or business, we are governed by the need to adapt to cycles. We welcome each one, knowing there are things we need to do to profit from the next cycle.

Much as we might like it to be different, there is no perpetual summer, and we can’t go from spring to spring without doing the work in autumn and winter.

So why, I wonder do we think business is different? That with a bit of twiddling, we can live perpetually in summer?

The collapse of Thomas Cook is as iconic as it was inevitable. It’s easy to see in retrospect that it needed to recognise that it was autumn ten years ago, and that it was in winter five years ago, but the investors wanted to wear their shorts by the pool, and the managers, instead of telling truth to power, did their best to provide, probably knowing it was futile, but hey, it wasn’t their business……..

Itinerant gardeers can move elsewhere, but the land isn’t going anywhere, and nor are those who value it.

Right now, both meteorologically and economically, winter is coming. We cannot continue to sit by the pool as the climate changes, inequality increases and societies fracture under the pressure.

Perpetual growth on a planet with finite resources is an oxymoron, and their is nothing wrong (in fact everything good) to be done if we stop taxing the system in pursuit of the unneccessary for a while.

It’s a time to prune, dividends as well as trees. To sit together round a warm fire and plan for spring. We cannot make it happen faster, but we can be ready when it comes.

Winter is a season, not failure, and not a problem

Planning as pain relief

Everything has always been connected to everything else. Whatever happens in one area eventually (and often unpredictably) affects others.

Up to now, we could cope with the complexity by ignoring it. Our plans were sufficiently robust, and the pace of change relatively slow such that we could fool ourselves into thinking we were in control.

The system has caught up with us. It feels rather a though someone has taken “change” out of the slow cooker and popped it into the microwave.

Nothing has changed really, other than our awareness of the things we did not pay attention in the past making their presence felt.

It means we need different metrics. The stuff we have measured ourselves by (GDP, Growth, Market Share) we now understand to be a very small part of what we need to measure.

The future is only frightening if we measure it the way we used to, not by what matters.

Plans need to share the stage with a broader understanding of where they fit into the scheme of things.

Beyond the SME Hype

There’s a great piece of research just released by NESTA. In essence, it has four messages:

  1. Most startups were not particularly special from an economic point of view.
  2. Many good companies go out of business.
  3. Existing businesses were by far the biggest contributors to economic growth.
  4. The British economy became significantly worse at allocating resources to the best businesses over the period.

This ties in with other data. Including the fact that the best “high growth” businesses are not start ups – they are, on average, 18 years old.

I think it suggests a message; if you’re going to start a business doing what is already done, it’s a high risk. In the end, scale wins. You may have a better offer, a better service, even be better looking – in the end though, the slower, more boring, uglier businesses at scale are likely to get you.

If you’re going to start a business, launch something new, then make it NEW. The attrition rates may still be high – but if that worries, you probably shouldn’t be reading this. Go NEW – you’ll learn more, meet more interesting people, and have more fun. The risk of failure is not to be feared – it’s part of the price of doing NEW stuff, a part of the process, and recognising it early – before it becomes a problem – is a key element of good business model design.

We all have something inside us we want to make real. There has never been a better time to do it.