Right now, the capacity to pay attention, make sense, act and change ahead of the curve is the holy grail of most organisations and if it is not, it should be.
Posts Categorized: Strategy
My hypothesis is that a humanity traumatised by pandemic, facing existential environmental impacts, and that is experimenting with various exponential technologies needs a better approach to strategy. An approach that can yield the crazy ideas that are needed.
What may look like a people problem is often an environment, situation, or system problem. Organisations are brimming with misdiagnosed problems. Just as a caged bird is so close to the bars that it does not know it is in a cage, we too do not recognise the structures that surround us. Rather we just find ourselves conditioned to behave in certain ways.
In his brilliant book The Laws of Human Nature, Robert Greene writes in praise of what he calls ‘reality groups’ – groups that are infused with a functional and healthy dynamic arising from their ability to maintain a tight relationship with reality.
Running the business is grounded in the here and now. It depends on data from the past. And it can be a relatively comfortable space because it deals with known facts. In contrast, changing the business is about the world outside the organisation and about the future. And the world outside is much bigger and more complex than the organisation – to the extent that it is essentially unknowable.
Marginal cashflow tells you how much working capital you require to achieve an additional € in sales. If the working capital requirement is greater than your gross margin you will run out of cash. Your business might be profitable but volume is detrimental to your survival. This is what ‘growing broke’ feels like.