Since the Second World War, the West has witnessed unprecedented economic growth. Emerging economies too have followed suit, some now ranked as the top economic powers of the world. Industrialisation, technological advancement, economies of scale and increasingly efficient approaches to profit maximisation have led to what we see today – the good and the not so good.
We live in a world of paradoxes. While the drive for economic growth is often rooted in a desire to improve the well-being of the stakeholders that the organisation or economy seeks to serve, there have been winners and losers. There have been great benefits and also great costs.
The currently prevailing view of the purpose of business is this: to provide goods and services to meet the perceived needs of the customer in order to generate profit for shareholders. The more the customer consumes, the better, as more goods and services are sold, and hence more profit gained. This is what we refer to today as ‘consumerism’. Consumption-based growth has become the driving force of economic growth, which in turn provides employment, providing income for consumers to consume more, in turn fuelling more economic growth.
Organisations, executives, employees and investors who hold on tightly to these out-dated business approaches that served us well in the past will find life harder and harder, swimming against an ever-increasing torrent of dynamic change. It is organisations and individuals that recognise the need to adapt and transform that shall flourish by pursuing opportunities within turbulence.
“Seeing a turbulent world through threat-tinted glasses invites the dysfunctions of threat rigidity – centralized control, limited experimentation, and focus on existing resources – that stymies the pursuit of opportunity.”
Business has learned a considerable amount from the past, with the positive attributes of the firm of the past remaining important as we shift forward to a new paradigm that balances quantity with quality, operational excellence with value creation, the short term with the long term, self-focus with system-focus, and stability with dynamism.
Our current prevailing approach to business has led us into the current reality of a debt-laden society, debt-laden economy and debt-laden environment. Business is part of the problem, yet business is also most definitely part of the solution.
Business is a powerful force for transformation; it is now time to make it a force for good. Each and every one of us in business has the potential to be a change agent for the positive adaptation that helps us as individuals, as organisations, as economies and as a global species. Each of us can freely choose to be part of the problem or part of the solution.
The Nature of Business: Redesigning for resilience, by Giles Hutchins (Green Books, 20 September 2012)
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