Entrepreneur’s Diary #93 – Efficiency Versus Resilience

Change and Transformation

As I see it, the technological and social developments of the last decades have caused a drastic change in our world. We actually live during a phase of turning of ages which will perhaps be as relevant as the beginning industrialization or the realization that the earth is in fact not a disc but rotates around the sun.

And this turning of ages is accompanied by a high degree of abrupt change. It is a change that concerns our private lives as much as our social and economic interactions. And especially those social systems that have an economic purpose –called enterprises – and are so very important for us humans are particularly affected by these changes.

For instance, I am reading things like more than half of the top thousand enterprises of this world are seriously in trouble and will perhaps disappear during the next few years. And since I witness quite a lot, I take this information rather seriously.

So what exactly did change? In the past, “being efficient” was the most important factor for success. To a huge extend, efficiency was supported by the massive use of fossil energies kept deliberately cheap. Yet, it also affected humans, causing an “economization” of our business and social procedures.

However, the age of efficiency is nearing its end. For many people, the continuing increase of efficiency caused an absurd “rat race situation”. Humans have literally been formatted by marketing (I am citing Michel Serres). Consequently, we humans en masse follow an allegedly forced target setting that tells us our happiness can only be generated through mass consumption and we make having as much luxury as possible our highest priority in life.

If that is not what you want, you have to change. If you want to survive change, you will – voluntarily or by force – have to undergo a transformation phase. And I am sure it will be more fun if it does not happen by force, but rather on purpose and proactively.

That is why companies that want to survive will have to develop more and more resilience. In Wikipedia, you will find a definition for common “Resilience” and for “Resilience in Management“. I find the metaphor of the “tilting doll” which will always right itself very attractive. Mind you, with this I certainly do not mean the American meaning of “weeble wobble but they won’t fall down”.

We need resilience, because efficiency alone will no longer suffice.

However, efficiency also meant that, for the producer, remaining competitive basically was guaranteed through “asking for a lower price”. “Asking for a lower price” is not helpful when it comes to sustainable survival. On the contrary: having to produce and deliver at less and less cost is a poor cycle. It is no fun and also makes us very replaceable. There will always be someone else who can offer it at an even lower price – you become replaceable and eventually you will be replaced. And this is how the basic rule develops: someone who is replaceable will be replaced.

We will gain resilience by opposing replaceability. The only way to do this is “being different”. And the transformation towards “becoming different” is necessary in order not to have to become cheaper. This will affect our service.

But how to know where exactly we need to be “different” in order to remain successful? This can certainly not be planned or even calculated! Consequently, we must try out the change. And trying out inevitably means that not everything we try will work. Which means that “trying out” will be an important investment into the future.

And it will only be successful through creativity, fantasy and passion.

(Translated by EG)
For more articles of my entrepreneur’s diary, click here: Drehscheibe!

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