2016 is shaping up to be extremely difficult! If you believe in the most pessimistic scenarios for 2016 recently presented in a special edition of Bloomberg, or browse the Saxo Bank’s 10 shock predictions about 2016, you might end up resolving yourself to leaving planet Earth and finding refuge with the Martians. Forecasts around the black hole of repeated financial crises, wars and terrorist threats certainly lead to pessimism and uncertainty. Fortunately, this is not the purpose of this article.
In such times, we must above all resolve to perform pro-actively in an ecosystem of ‘creative destruction’. This famous expression, coined by the Austrian economist Joseph Schumpeter, has made him a pioneer in predicting the regularity of crises, in cycles of 3-60 years depending on the type of crisis. Several studies summarize this dynamic that has shaped our existence for millennia.
Destruction can be caused by several examples of events such as financial crises, political regime changes, bankruptcies, wars, or even natural disasters. Without destruction, human motivation to rebuild, innovate, secure & boost is never as intense…. The conviction we must then all have, despite all the pessimism, is the need to know how to destroy in order to create afresh and better on stronger foundations. In times of crisis, it is often necessary to review paradigms and assumptions of success and failure. It is becoming more and more appropriate to raze the existing to build new models. Dare start from scratch, adopt the greenfield approach as an opportunity to get rid of brakes and burdens that would otherwise continue to restrict growth.
This approach is widely taken by seasoned real estate developers, who often avoid renovations of old works as the economics and complexity of demolition -reconstruction are often more attractive than conduct business within necessarily binding constraints which limit growth and are risky to handle. Destroy-to-build applies to humans’ thoughts as well as their actions and strategies. It is essential to think differently and recognize that it is often necessary to abandon certain thoughts to create new ones. We must admit that we may have been operating under severely wrong assumptions and that we cannot always believe what we think.
Creative destruction is not just a philosophical utopia. It is the audacity to undo the existing and remodel it on sounder foundations. Managing the complexity of personal, professional or business crises requires the will to separate ourselves from what is holding us back. A pillar of this audacity is agile management of change. Providing support for audacity is the key to transforming or recovering projects and businesses in trouble. This must be based both on the right levers of transformation, which often deserve monitoring, and on reinforcing internal expertise with contribution and guidance of external consultants providers of innovative and clever solutions. These provide the advantages of benchmarking, and, crucially, have the emotionally detached point of view of the organization required to dare suggest pioneering approaches.
Finally, we must recognize that confidence in the future is also reflected in an inescapable part of our existence as individuals but also as organizations: Our deep and / or intimate attraction to symbols of success. Warren Buffet aptly and often says: “Tell me who your heroes are and I’ll tell you how you’ll turn out to be.”. This quote pushes us, in normal times but even more so in times of crisis, to select or renew our set of heroes, because it is from our projection of and admiration for what our ancestors or symbols have done and undone that we will be able to innovate. An important resolution for 2016 is to choose heroes who will make us into the best that our life deserves!
By Farid Yandouz