Michael on ‘The Problem of Business’ …

Nearly all of business education–even at postgraduate level–is misguided, even misleading. It is, for the most part, faithfully based on a false premise–that the problem of business is growth. When, in fact, the problem of business is survival.

Most business leaders spend their time and energy on solving the wrong problem. Yes, of course, growth is critical in business but the MAIN PROBLEM is that most business fail to survive long enough to grow.

Of the Fortune 500 class of 1974 only 22 of those businesses still survive. These are the big companies. The failure to survive of smaller companies is ten times worse.

Since Darwin explained the reasons 150 years ago, we know that it’s not the strongest or the largest that survive but it’s those best prepared to cope with change.

On this BIG PROBLEM of survival, most business executives are shockingly ignorant and deplete in their formal education. They know little or nothing useful about the science of strategic darwinian thinking. They venture forth naked and ill-equipped in their approach to the chaos of the marketplace–the whirling, howling, cacophonous wilderness of the global marketplace with its ferocious fads, toxic wastes, and vicious moods, its callous explosions and cruel extinctions putting capricious end to the blind and righteous rivalry across pointless medieval double-entry boardrooms.

Extravagant expenditures of directors’ time and energy are squandered on the talmudic reading of balance-sheets and P&Ls, like the obsesive pre-scientific study of entrails, when less than one director in a hundred could give an intelligent, educated account of what strategy it would take for their business to survive in the fast-changing environment of the next decade.

Experiment: Ask any director you know to demonstrate their strategic understanding of darwinian evolution and to show how s/he uses that knowledge to safeguard the future of the company in the faster-changing environment of the marketplace. If you get a clear, articulate response it will be a surprise.

Is there any business school in Australia that insists their graduates understand the strategic business application of the darwinian imperative? Are there any of the endless ‘case studies’ churned out by business schools devoted to darwinian business strategy?

Do let me know if you find one.

One thought on “Strategic thinking: On solving the wrong problem

  1. Michael, great post. There’s a great slide in one of Tom Peters recent decks that quotes General Eric Shinseki, former US Army Chief of Staff that says “If you don’t like change, you’re going to like irrelevance even less”. Nothing holds more true in this internet age. 2 guys in a garage can take on a large, all powerful, global behemoth. In fact they did. That was 9 years ago. Now their search engine is a part of most of society’s DNA. And just 2 years ago, a little video sharing site was created – You Tube. Facebook is next.

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