Thursday, January 15, 2009

The recession as an opportunity to create a better world

Recessions are part of a cyclical change. But we seem to forget that. Peter Schiff's early warnings about overconsumption, debt, low savings and underproduction was ridiculed and laughed at. We can now see that Schiff was right. Good for his career. Bad for us. Or is it?

Umair Haque writes about the same overconsumption as Schiff. Haque goes a step further by stating that "We're addicted to consumption". This addiction is driven by the push marketing/sales culture in our present business paradigm, the industrial paradigm. A paradigm that is based on what Riane Eisler calls "dominator systems".

The industrial age represented the mechanical universe and the organizations were patterned after the dominator model:
  • fear-based
  • characterized by rigid hierarchies of domination
  • an ethos of conquest (including the “conquest of nature”)
  • a high degree of institutionalized or built-in violence
  • male domination
  • and contempt for “soft” or stereotypically feminine values
The industrial organization was made for another era, when control, efficiency, order and predictions were the foundations for success. Here is the paradox. The world we live in is completely different from the industrial age. Still, we rely on the same principles for organization today as we did 100 years ago.

The recession does not have to be the worst thing since "New Coke". Crisis also breeds opportunity (Business Week). Andrew Carnegie started building his empire 1873, in the beginning of a depression. Hewlett and Packard started their operations during the Great Depression. What is needed in order to capture the opportunities are courage and innovation.

I believe the world has an urgent need for two kinds of innovations;
  • organizational innovations that release us from the decaying industrial paradigm, and
  • business model innovations that focus on real value creation
I believe these two breeds of innovation are closely linked. Organizational innovation may not be a prerequisite for business model innovation, but it can certainly pave the way for radically new business models.

In order for this to happen we need courageous leaders. Leaders that are brave enough to pioneer the emerging paradigm, while their peers will ridicule and laugh at them. Just like Peter Schiff's "peers" did a year ago. But look who's laughing now.

My hope is that the recession will not just be misery, bailouts to preserve the old power structures and economic waste but that we will see pioneering leaders emerging, leading the way to a better future for mankind and our planet.

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