Reflections 27th April

Growth versus Extraction

“To grow a vine is to embrace uncertainty. Each season whispers its secrets, and no two years will ever tell the same story.”

Jean-Claude Berrouet

Extraction has driven our economy for decades as we have extended supply chains to breaking point, replacing relationships and partnerships with algorithms. We have come to believe that there is always someone who will make what we want more cheaply, whether through production efficiencies or simply crude cost-cutting. Anyone who has worked in the less than ten per cent of the UK Economy involved in farming and manufacturing knows this well. They have seen margins relentlessly squeezed by large corporations, who are happy to use their purchasing power to switch suppliers at a moment’s notice to wherever what they want can be bought more cheaply, with barely a nod to the impact on the supplier or their community.

Extraction is always easier, less risky, and more profitable than growing things until - suddenly - we find all the value has been extracted, and like the last pressing of the grape, what is left has no goodness in it.

It has killed real innovation stone dead. Instead of growing the business, society, or country, those in charge start to squeeze it. Short-term value extraction trumps long-term vibrancy. The result is that they aim to make ever more of much the same, more efficiently and lose sight of the fact that to harvest, we have first to grow, and that to grow anything, from vines to businesses, we have to embrace radical uncertainties.

“Radical uncertainty cannot be described in the probabilistic terms applicable to a game of chance. It is not just that we do not know what will happen. We often do not even know the kinds of things that might happen.”
― Mervyn King, Radical Uncertainty: Decision-making for an unknowable future

Risk is a feature of any system and cannot be avoided. Whatever we do, the risks we hide from will find us eventually.

Watching the Trump Administration thrashing around trying to undo the consequences of the actions taken by corporations in search of short-term profits as the world globalises is like watching the Russian roulette scenes in The Deer Hunter. Politicians and Companies forced into all-or-nothing gambles in pursuit of an illusion of performance, with no control over the odds and no acceptable outcome, just varying degrees of catastrophe or survival by chance.

We find ourselves being led by those who, under pressure from “the markets”, are like the prisoners in the film, gambling in conditions of radical uncertainty, but with the bonus that it is the people who work for them who get the bullet.

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What can we do when we can’t get the information we need?

“The information you have is not the information you want. The information you want is not the information you need. The information you need is not the information you can obtain. The information you can obtain costs more than you want to pay.”
― Peter L. Bernstein, Against the Gods: The Remarkable Story of Risk

The next few years will be interesting, to say the least. Trump is not the problem - he is an opportunist riding the waves of discontent to his advantage in the same way as the other populists (including our own here in the UK). If he were to disappear tomorrow, the problem would still exist.

Which means life will be unpredictable. As the ripples spread out, the world looks likely to “relocalise”. Relationships will change, supply chains will reconfigure, and so will the way we work, affecting the many jobs in the middle of organisations that rely on administering and servicing areas that may reduce volume or be done by technology. The reality, we just don’t know.

What seems likely, though, is that as extraction models become exhausted, there will be an increasing need for growth driven by originality, imagination and creativity.

There is a simple chart, from Berhana, I have used before, and its elegant simplicity warrants using it again for the message it carries:

I believe the dot, in between where the old is dying and the new is emerging, is where the action will be, as obsolescent organisations, as well as many of those with irrational valuations, find themselves being hospiced, whilst those with ideas and energy will start to move into the space they vacate. Again, quite how that will happen and who will be involved are difficult to know.

It is enough to be aware that we will be affected. This does not feel like a “normalisation” of the current economic model, it feels more like a seismic shift. We have created technologies that will do much of what we have shaped our societies and education system to deliver - cheap labour to service capital.

Now we must turn to those capabilities, attitudes and dispositions that have always had a relationship with exploring uncertainty - the arts and humanities that we have sidelined for so long as we prioritised a narrow definition of performance.

Of course, they exist in our current organisations; they have just not been welcomed or valued because they question and challenge dogma and orthodoxy, and those who hold them rarely make it to the top of organisations built for performance.

This means it is time to look again at our networks and move away from the mimetic noise of LinkedIn to find conversations that challenge us to step into who we are rather than who we think we are expected to be. Somewhere those aspects of us that we have submerged can surface, breathe and find a home for whatever happens next.

We can recognise we’re ready as we are.

There’s a pernicious aspect to our education and training system - it carries a message that we’re never good enough; that there is always something - a qualification, experience, a job role - that will make us ready for what we want.

When things were as they were, a few short years ago, there was an element of truth to it. In linear, bureaucratic, hierarchical organisations, career paths, job descriptions and appraisals were valid, but in the conditions we face, much less so. Out-of-date dogma is a dead weight, no matter how comfortable and reassuring.

We are entering a time of heretics and artisans - people who challenge dogma, and craft new ways of working. Creators and Makers who start their work where AI finishes, not latter-day Luddites. We will find them in the “quiet before” - in the networks forming in the emergent system, probably in the same way as the workshops and ateliers at the start of the industrial revolution, and in the spaces like the Café Guerbois where the new schools of thought that drove the Enlightenment were born.

There are no signposts.

“Caminante, no hay camino, se hace camino al andar.”

“Traveller, there is no path, the path is made by walking.”

Antonio Machado

We just have to start, in whatever way we wish.

Every Wednesday at 5:00 pm UK time, a group of us gather to share ideas and explore the possibilities emerging outside the walls of "old magic" organisations. If you'd like to join us, drop me a line.

Things I’ve liked this week

Margaret Heffernan

wrote a great article this week that resonated. I particularly liked the linked piece Plato for Plumbers. Well worth reading.

8.9ha News. Alongside Farming today, this has become a regular read. The resilience of agriculture, as well as the way the sector is treated by a mindset dominated by businesses with very different and less consequential forms of asset is instructive.

JP Castlin

is on form again this week - a great post of Experimentation. (The best bits are beyond the paywall, and worth it)