Every Company Needs a Good Map

I have a stack of books that I intend to read. Actually, it is several stacks. One of the books that has waited patiently is Collapse: How Societies Choose to Fail or Succeed (2005) by Jared Diamond. There is a nice article on him and Collapse from last year in the Houston Chronicle. In this book, sort of a follow-up to, Guns, Germs, and Steel, UCLA professor Diamond proposes that there are 8 major factors that lead to the collapse of a society.

1. Deforestation and habitat destruction
2. Soil destruction
3. Water management
4. Overhunting
5. Overfishing
6. Effects of introduced species on native species
7. Human population growth
8. Increased per-capita impact of people

What does this have to do with business growth and change?

I believe that people behave in generally the same manner yesterday as they do today. We may wear different clothes and have access to different tools but we are still driven by the same needs and desires.

So, here is how I see "Collapse" applying to business...

We choose to fail or succeed earlier than we are often cognizant of. The structure we choose for our company, our management style, and the market we approach. One of Diamond's observations is that societies that succeeded did so by establishing a long-term view of their existence. Those that chose to abuse their environment may have endured for centuries but not millennia, 100s of years but not 1000s. It was not as important that the leadership was by decree (Top-Down) or by consensus (Bottom-Up) as it was important that the long-term view was taken. Diamond discusses several instances where improper land management led to an inevitable collapse when there production of food was no longer viable.

The same can be said of a business. If a business is set-up to hope for a quick build and sale, it will not last long if that sale does not happen. Skilled M&A people can see this and avoid such enterprises or they wait for the collapse and get the technology for a bargain. Short-term thinking does not always fail, but it is rarely a model for success.

Bosses who abuse their staff, customers, or business partners are like those who misuse their resources. For a while new staff, customer, and partners can be found. Eventually the reputation, the turnover rate, and level of customer dissatisfaction become well known. Recently I saw a program that discussed the growth and decline of the coffee industry. As the number of competitors dropped the pressure to provide high quality coffee declined. This opened the door for a resurgence that could only come from outside - Starbucks. The insiders were too focused on profits, stock price, and marketshare (short-term), that consumption had dropped almost 50%.

There are analogous situations for the other issues Diamond highlights but this is a blog not a book. I encourage you to consider how you can work on your long-term goals of a sustainable business by reviewing these issues and analogies.

If you would like to contribute to this discussion by highlighting one of the other factors I would be happy to post your submission a guest contributor.