I think it is safe to say that we are all experiencing some sort climate change. I am not just saying that because it is one hundred and four degrees here in Texas. It is mid-August in Texas. It is always one hundred and four degrees in Texas in mid-August. Remember Climate is what you expect. Weather is what you get.
What is interesting about this year in Texas is that we had almost four feet of rain in the first five months of the year, and now it hasn’t rained since then. That is a little odd. We have had something of a drought for the last few years where all of the water resources were way below normal. Most municipalities had instituted water conservation rules because of it. Needless to say, there were a lot of dirty cars because we could not wash them and a lot of brown lawns because we could not water them.
We then had a short period of a few months where it rained a lot and filled all the reservoirs to literally over flowing. Everything got green and lush. Most importantly, the golf course fairways were lush and the greens were soft. Life was good. And now we are back to no rain, a drought, but with full lakes. And on top of that it’s August and really hot, again. Go figure.
There are many that would like to point to man as the cause of this perceived global climate change (global warming). I am not entirely convinced of this causality since the geologic record across hundreds of thousands and millions of years indicates that we have had multiple periods of global glaciations (ice ages) followed by significant periods global warming in the past. I’m pretty sure that man didn’t cause these as he (we) weren’t around for most of them. It is possible that man is potentially affecting or exacerbating this cycle with carbon emissions and the like but with a data sample of only a few hundred years (against a historical record of millions of years), as I have said, I am not sure I am entirely convinced.
Be that as it may, this entire introduction regarding environmental change brings up the topics of how do you recognize environmental change, and how do you cope with that type of change. As always there seems to be some significant parallels between what is going on (and has gone on) in the environment and what businesses are facing on almost a daily basis.
Darwin in his “Origin of Species” postulated that organisms either adapt to their environments, or they go extinct. This is pretty interesting stuff when you remember that he figured this out by looking at some little birds in what are now Galapagos Islands. This is now a basic tenet that we all seem to agree on.
It is those that adapt to their changing surroundings that survive.
About ten to eleven thousand years ago North America experienced a period of rapid warming associated with the end of the last glacial period. During this time lions, cheetahs, mastodons, and various types of bears that were present in North America went extinct. It is interesting to think that there were lions, cheetahs and mastodons as little as a few thousand years ago in North America, and that they are now extinct. That is a veritable “blink” of an eye in climate or geologic time.
It is believed that several of these species were unable to adapt quickly enough to the changing environment associated with the post glacial period warming and began to die off. It is then thought that other species in that particular food chain (predators and such) also began do die off as they could not quickly enough adapt to utilizing other prey. The net result is that they are gone, and we only know about them here because of the bone and fossil record.
When we look at what is going on in the various markets, not only in the Americas, but globally, we see similar adaptation and extinction events occurring. Businesses and organizations must be quick to recognize shifts and changes in their environments and be agile and flexible enough to be able to adapt to them.
This adaption – extinction pressure requires businesses and organizations to continually perform a balancing act between their desire to codify and stabilize the activities and functions that allowed them to succeed yesterday into a repeatable format, and the ability to be flexible and change these activities and functions in order to meet the new demands of the environment (and the competition) of tomorrow.
There is an old joke that if you are a member of the group that is being chased by a bear, that you don’t have to be faster than the bear. You just have to be faster than the slowest member of the group.
This idea works for a while, until the bear has caught all the other members of the group that are slower than you. Now you had better be faster than the bear, or able to figure something else out. Just running, like you always do is no longer good enough. If you don’t change, you are probably in line for the next personal extinction event.
All this leads to the rather simple position: Changing environments require businesses and organizations to change.
We have all heard the platitudes that organizations have with respect to change and their ability to change. They have to plan on change. They have to react to change. The only constant is change (a particular favorite of mine). This is all well and good. They may or may not do these things. It appears certain that if businesses cannot accept and come to grips with the idea that the way they are doing things today will not be good enough “to outrun the bear” tomorrow they may not get to see the next “tomorrow”.
Climate change may involve the possible change of tenths of a degree across tens or hundreds of years. It is not constant or consistent, as demonstrated by the fact that average temperatures have actually declined slightly in the last few years. It seems the past changes were small and slow, but it was enough to send multiple species into extinction, rather rapidly when looking at things from a climate and evolution time frame point of view.
Such is not the case in business.
Over the last few days the Chinese government has “officially” devalued its currency, twice. In global warming terms this is the equivalent of announcing tomorrow the world will officially be five degrees warmer and good luck to all you seals, walruses and polar bears. This move in China fundamentally alters a business’s ability to move products from other countries into the world’s second largest market by making them significantly more expensive, and at the same time makes products manufactured in China far more competitive in other global markets by making them significantly less expensive.
A business that finds itself on the wrong side of this type of import-export governmental cost equation manipulation has a very short time to change its model for doing business. Maintaining that a company is flexible and that it prides itself on its ability to change isn’t any good here. When there is a recognition that the environment has changed, there needs to be the accompanying recognition that in reality the bear is now running faster.
The only thing that counts in a situation like this, or just about any other situation where a business is confronted by a reality that is in conflict with its current operating model is, does the leadership recognize the new environmental reality, and do they have what it takes to get to the new required business reality? Discussions, meetings and attention to process improvement do not “change” the need for a new approach to doing business when you find yourself in a change or extinction situation.
Sometimes the changes in the business environment occur like they just did in China. They are blatant, easily recognized and either drives a business response, or extinction. However sometimes they are more similar to the changes associated with global warming in that they have occurred slowly, and somewhat erratically and inconsistently over time. There will be those (like me for instance) that recognize and agree that an environmental change is occurring but differ on the attribution of its cause, and there will be those who deny that any change has actually occurred.
It is very clear though that in either case there comes a business morning where you wake up to an unseasonably hot day, and smell bear breath over your shoulder. What you change and how you change will then decide which side of the adaptation – extinction equation you are on.
I think Darwin would be agree.