Trophic incoherence in business strategy, preliminary thoughts.

Umair Haque recently wrote a column on business strategy that, in his style, seeks to disrupt conventional models of business activity in order to create a more meaningful economy. I highly recommend it.

http://blogs.hbr.org/haque/2010/11/strategy_can_do_better.html

Below is the comment I posted to the column. Some people seem to like it.

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There’s a usefulness of thinking through these issues within a model of trophic food chains. At the bottom are the plants which capture and provide the initial conversion of energy into matter. These are marginal community interactions where we can locate phenomena like beauty, purpose, and people. These are the small interactions that we engage in within our communities and from which derive larger, more concentrated but limited forms of value. Herbivores emerge within the context of plants and, for the most part, let the plants be better at being plants. By constraining a degree of growth by eating and defecating them, certain resources go back into the soil for them instead of becoming depleted. We can think of this in part as local community businesses. The local hardware store is responsive to the community it is within and, by providing significant services like hammers and nails, allows the community and its members to more effectively do its thing.

Further levels, from first-tier predators to apex, perform similar actions and further concentrate resources into richer and more powerful form. We can think of this in part in terms of sunlight that gets concentrated and converted into carbon in plants which, if buried in appropriate conditions, converts to fossil fuels. Oil is usable and convertable to many things, one of which is jet fuel. Each stage is a leveling up that concentrates and increases the relative capability of the resource. It does so, though, by reducing the degrees of freedom or the types of things it can become. Carbon can become many things, although it can’t run jets in its raw form. Jet fuel, refined and processed, has the power to run jets. But it can’t really level down to raw oil and become something else.

Further-converted energies are more powerful but more entrenched. What is more, they are responses to problems in the level below from which they derived, but not necessarily to anything further down the chain. Each level reduces the degrees of freedom or the dimensions of value. Each of us are capable of doing many things. Microsoft or Apple is only interested in a very limited set of what we can or want to do. As another example, wolves don’t particularly care about grass. They just care if there are rabbits around to eat. The wolves are entirely dependent on the ability of the grass to feed rabbits, though. They just don’t realize it. This zombieconomy takes this even further by asserting that all the wolves need to care about, and take care of, are wolves. Everything else is just assumed to happen. But if you don’t regenerate the soil by letting wolves die and decompose, moving resources back to the base, the system starves itself. The alienation of and within our communities is representative of this.

Established institutions, intent on maintaining themselves through a model that has devalued everything below, risk a lot by questioning their assumptions, which is why they simply try to pull harder. These days they risk even more if they don’t, however. If we’re to pull out of this, and we are more than capable of it, the task is to first and foremost reinvigorate the communities through which all other forms of wealth are derived. The ecology of our economy has shifted, and extinctions are likely to result unless they can adapt. But replacing wolves with tigers is hardly traumatic, particularly if those tigers are more responsive and recognize their indebtedness to the rest of us. In this process, we need to work to ensure this happens. Importantly, though, we need to be sure that we don’t let the zombies of established economic and governance institutions limit what we are capable of by what they think we are. They want our brains, but we’re also our hearts.

Heh.

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