Wake up and Smell the Real World | Business Complexity series
As we sit in the wake of recent elections, with many of us diving into analysis of what this all means for the future, it reminds me of how easy it is to get lost in the game and forget our connection to the real world. At our peril.
Whatever industry, stage or type of business you’re in, right now as you think about 2021 and ‘building back better’, we need to wake up to the notion that the status quo is really rather dodgy from a commercial perspective. If we seek to restore our current business model, we build in more risk, not less. If we go on the defensive, we build in more risk, not less. If we adopt an inside-out view we build in more risk, not less.
Flipping the switch to invest in creating a different future not only reduces our risk exposure, but taps us into into new value and revenue opportunities. This is particularly relevant if your business model is becoming more redundant by tech changes and the future of work.
When I’m down at Tech Futures Lab teaching systems thinking to my Masters students, we always start off with a little “wake up and smell the real world” exercise. It helps to get perspective on how so much of the world as we experience it, has been designed by human beings for human beings. So when it gets deconstructed and falls apart like the pack of cards we’ve seen it to be this year, it gifts us the opportunity to reconstruct it, but differently.
It’s really a matter of whether you want to lead into this or let your competitors get there first.
In any Design-led process of business transformation, we start with discovery. As systems thinkers, this discovery phase involves exploring the real world and unpacking the complexity of your business eco-system as it relates to the social and environmental systems at play. It’s a little bit of heavy lifting, but the pay back is big. It reveals countless redesign opportunities for future business value and provides the foundation for designing a stronger, more robust business model.
Why?
Because we are living in a market that has not yet priced in the real world.
But it will. And soon.
Just right now the EU is considering a new law to ban the sale of products linked to deforestation and ecosystem destruction. If this goes through, the market impact is far reaching. Policies like this are happening.
So the sooner you consider the real world, the stronger your risk and future revenue position. And the longer you maintain status quo thinking in your strategy, the riskier your business model becomes.
It’s like parenting when you find yourself questioning the education system your children have to contend with. You know that some of the old school thinking isn’t going to help them in the real world. You know that it doesn’t fully recognise your children’s latent talents or out-of-the-box thinking. It’s easy to see the construct for what it is. And it’s easy to do a workaround to build up your children’s strengths for how you think the future real world will be for them. You’re future focused. You’re real-world led.
It’s the same for business.
This sits at the heart of Kate Raworth’s wonderful doughnut economics. It’s embraced by economists, scientists, and future thinking business leaders embrace it too.
I love the words of Yvon Chouinard, the founder of Patagonia “every time I do something right for the planet, I end up making money”. This is what we did when I led the business transformation of Ecostore from hippy fringe to mainstream cool. It’s what so many leading brands today are doing, like Allbirds, Ethique, Thank You, Wishbone.
This means understanding and grounding your business from the bottom up not the top down. In Te Ao Maori, this echoes the principle of Maramataka. Consider time and place. Consider all the costs, all the waste that might not yet have a market currency attached to them. Not yet. But soon.
The power of systems thinking is it helps us understand, and capitalise on, the complexity of a business eco-system. It helps us understand i) real world impact and the impact of ii) time and iii) scale. In the work I’ve done in transforming businesses and redesigning business models over the last 25 years, I’ve found each of these three things is intrinsically tied to value creation, value erosion and risk, so it’s well worth exploring.
Understanding this is critical if you’re rethinking your strategy, redesigning your business model or launching yourself as an entrepreneur into the world today. Failure to account and respond to the complex real world will come unfortunately at your peril.
Sure, when you lean into the real world, you’ll uncover the tension of competing needs. But here’s the magical thing; the greater the tension, the greater the structural integrity of your business model, and the greater your antifragility[1].
——
Given your business exists in an ecosystem, how much of your business strategic thinking looks to the wider context of the real world? How much does your business model consider the perspectives of all the real world stakeholders it touches?
---
Thank you for taking the time to read. If you want more on business model transformation, feel free to use my free tools page for useful models, tips and examples. If you want to chat about your business model, or how Design Thinking 3.0 can help you face into 2021 stronger connect with me.
—-
[1] Tension is at the core of the Tensegrity method I have developed to transform businesses. Tensegrity is a design principle coined by Buckminster Fuller. The strongest and most robust systems operate when all parts are working collectively, in a balance of tension. This can be seen best in nature from the structure of human DNA and cells, our skeletal, muscular and myofascia system to spider webs, birds’ nests and trees. Tensegrity structures use the least material, are the most effective and provide the greatest resilience over time. They stay in flow. Nature favours tensegrity systems the most.