Your Linear Life is Over

“I think if there’s any habit we should consider breaking, it’s confidence about what’s going to happen in the year to come,”                                                               - Bruce Feiler

Living the Linear Life is a Thing of the Past

What is a Linear Life?  A Linear Life is one where everything is a simple, straight line moving from A to B. But in 2020, we discovered that nothing is linear anymore. We became painfully aware that our supply chains, our healthcare systems, our political systems and other critical systems are fragile and broken. Now it’s easy to blame COVID, but it’s wrong. If anything, the pandemic and our reaction to it, just accelerated our discovery of our existing issue.

An example… In America, we have about three times the retail space per capita of any other developed nation. The “retail apocalypse” began before COVID, was accelerated by COVID and will continue after COVID. If you’re able, go to a large, indoor mall in your city. You know, one of those temples to purchasing power built in the 50’s, 60’s or 70’s. If the mall is doing well (which according to CNBC means they won’t shut down this year), for lease signs probably covering the windows of a fourth of the stores. Perhaps one of the three or four “anchor tenants” (i.e., big department stores) has already closed. If the mall is not doing well, then perhaps two of the anchor stores are gone, and another is in bankruptcy. 

Quoting Bruce Feiler again, “The linear life is dead. It’s been replaced by what I call the ‘nonlinear life.’ And the nonlinear life has many more disruptions, twists, turns, setbacks, upheavals, crises—what I call ‘life quakes.'”

That’s not to say you can’t make plans or set goals, but don’t expect things to unfold perfectly as you’ve predicted and be prepared to pivot. The question now becomes, how does my company move on from the Linear Life?  Resiliency! We can usefully define resilience as a company’s capacity to absorb stress, recover critical functionality, and thrive in altered circumstances.

HBS has a great list of factors that make resilience hard to measure, much less achieve… 

·      Companies are designed to maximize shareholder value. Most public companies don’t even have try to measure resilience.

·      Most companies, pubic and private, are too focused on short-term goals. For the public companies, it drives executives’ pay and career longevity. For private companies, just try getting a bank loan if you had a loss last year (even if it was to retool your company for long term success). 

·      Most companies are focused on creating & executing stable plans. Business trends are treated as just that, long-term, immutable trends that won’t change during the planning period. 

·      For their planning process, most companies imagine themselves as an island, to be optimized independently of the world in which they live. 

In Scott Adams’ words, “Systems Instead of Goals!”  We need to build into our firms’ systems that allow for:

·      Interdependence between our companies and our supply base, customer base, government environment, and social systems.

·      Complexity, uncertainty, multi-timescale perspectives have to be our new baseline. They cannot be simplified out of our planning. 

So, what do we need to embed into our firm in order to become resilient? It’s not easy, but here are six attributes of resilient companies:

·      Redundancy – more, perhaps smaller, facilities spread out over wider areas

·      Diversity – I’ve spoken about multiple supply chains a number of times 

·      Modularity – Can a single system fail without bringing the entire enterprise down?

·      Adaptability – Evolve via experimentation, use the champion / challenger strategy for key systems

·      Prudence – aka Murphy’s Law… If something can go wrong, it eventually will.

·      Embeddedness – aligning your goals and your systems with the systems around you.

Here’s the bottom line… you need to assume that normal isn’t anymore. You need to communicate with and work with your suppliers, your vendors, and your customers/clients.

Embed your company into those upstream, become their preferred customer. Embed your products/services into the lives of your customers and clients. 

If you need help, call us!