If one thing is for sure in business it’s that nothing is for sure in business. Simply put, it’s volatile: markets wax and wane, decisions go awry, regulations change, opportunities are missed, products flop, consumers get fickle, new technologies disrupt, start-ups innovate, brands flatline, and a new Top 10 list gets published every month by HBR, Fast Company or Forbes with advice for today’s CEOs on how to successfully think, plan, act or dream in the face of volatility.
Last year around this time, the debate du jour in business magazines and blogs was culture vs. strategy. Like most published debates in business – penned as they often are by consultant types eager to charge those same CEOs $300 an hour for proprietary methods and guidance on strategy or culture – the conviction and clarity of the two positions were pure obfuscation.
As any self-respecting post-Fordist theorist has known since defending their PhD thesis, few things in business other than the most basic of tactical decisions are as simple as either/or. Business is in a constant state of flux because capitalism itself has a tendency towards crisis, change and instability. It also has a tendency towards stabilizing social institutions, rules and norms. Like Shiva, it giveth and it taketh away.
This ebb and flow comes down to what post-Fordists and their friends refer to as Regimes of Accumulation and Modes of Regulation. The first refers to systems of production and consumption – how we make, sell and purchase goods and services. The second refers to explicit and implicit laws of society that shape the first, determine its form, and structure how we live economically – and socially. In this model – known as Regulation Theory – every Regime of Accumulation will reach a point at which the Mode of Regulation will no longer support it. For any number of reasons, the sustainability of the old system bottoms out. When that occurs, a new cycle emerges from the ashes of the old model.
Under this model, all business can expect to fail at some point in time. Don’t believe the hype? Just ask the family behind Kongo Gumi. Established in 578 AD, Japan’s leading architectural firm and builder of many famous Buddhist temples and castles was, in 2005, the world’s oldest company, boasting annual revenues of $70 million. The following year it went into liquidation and its assets were scooped up by the Takamatsu Corporation.
Given that buildings and Buddhism are more sustainable than mining, dish soap, high fructose corn syrup or DVD rentals, the lesson is obvious: because time and change catches up with everyone, every CEO should be preparing for failure and thinking about how to bounce back from it.
To do that requires more than heeding the monthly advice of the Top 10 lists and the usual admonitions of persistence and perseverance, self-discipline, focus on your strengths, counter adversity with resilience, honesty is the best policy and, of course, applying the supposed hardness of strategy or the fuzziness of culture. Instead – and while recognizing that those admonitions are all good advice – it requires answering three simple questions: Why? What? And how?
Question one, part one: why is your company a company? If your answer is something along the lines of shareholder value, stop reading and return to last year’s Top 10 lists. Chances are, you are doomed to the post-Fordist apocalypse faster than most of your peers. Shareholder value doesn’t answer the ‘why’ of a company’s existence; it merely accounts for the financial engine that proves it still has a grasp on some degree of sustainability, however temporary that might be.
Question one, part two: Why are you the CEO at your company? If your answer is something along the lines of ego, respect and/or personal profit, you might just have stumbled on the reason you’re in need of a bounce back in the first place. Maniacs are for asylums. Respect is for hip hop. And a desire for personal profit is something your janitor shares with you.
To correctly answer this two-part question and return from that inevitable abyss from which echoes the possibility of every bounce back, the CEO must grapple at an existential level with the question of ‘why.’ Part one demands an examination of a brand or business’ core purpose and meaning. If you do not have a purpose or meaning beyond profit – something that speaks to serving humanity, society or culture – then your sustainability rests on very shaky ground. Part two demands a reflective assessment of one’s value and path in life. If you do not have core values that frame your purpose as a CEO – to lead, to serve, to help, to teach – then your employees and organization likely view you as a character somewhere between boss and high school jock that kept his starting position in adulthood. Like why, the question of What also comes in two parts. Part one should be easy to answer: what do you make? The correct response is the real, not aspirational. Here, products that might soon lead a company towards the precipice of the post-Fordist abyss are those that have become or are becoming unsustainable thanks to unbundling (get just what you want), substitution (trading physical for digital), integration (all together now) and health or environmental concerns. As such, staging a bounce back means that you consider not only a consumer insights and design directions that loudly and proudly announce you are back with something needed and relevant but also what might spark the next Mode of Regulation that cancels your attempt at accumulation. In short, make sure you don’t bet the farm on camera film.
Finally, in seeking to answer the ‘how’ of a successful bounce back, every CEO will be faced with the longest and most challenging laundry list of questions. How do you motivate employees, tap their creativity, define a strategy, tweak your supply chain, break old habits, speak in new ways, own a concept, start with consumer value and end with renewed shareholder value?
The answer is to begin at the beginning. Only by defining and following your gut on the meaning and purpose of your brand, your own meaning and purpose as a CEO, your own core values and how the answers to those questions shape new ways of thinking and doing to guide your ‘what’ and ‘how’ will you be prepared to better weather the social, cultural and economic power of the Regulation Theory and the next wave of businesses it will plunge into the abyss.
This article originally appeared in Summer 2013, The Bounce Back Issue