The terrorists who attacked the Paris satirical media organization Charlie Hebdo hoped to silence its voice. Instead, 3 million issues were printed following the attack, compared to 60,000 before the attack. Welcome to the Law of Unintended Consequences. Is this law a reflection of human nature or economics? Is there a mystical comic figure guiding our planet? Or, more likely, do unintended consequences emerge from the reality that every action in a system sets in motion a reaction? What I grasp from observation is that when you push something too far you always generate an unintended and undesired response. A former Oscar Mayer executive told me that the company’s manufacturing leaders, in trying to pull cost out of its ham deli products, created luncheon meat that tasted more like water than ham. When sales plunged, the product managers regained their power in the…
Business model innovation when predictions can’t be trusted
I spent this morning with 14 business owner/CEOs confronting decisions made more challenging by our increasingly uncertain economy. As seasoned entrepreneurs, they’ve mastered measuring risks, making decisions and executing them successfully. Yet the decision-making prowess that generated high business values will not generate tomorrow’s success. How they approach decisions needs to change in today’s turbulent economy. We made a list of key known attributes of the economy – e.g., deficit, trade gap, aging of the population, high unemployment, China’s rise – and a list of unknowns, this list dominated by policy questions. How will the US resolve its deficit issues? Will China rebalance its economy towards domestic consumption? Will Greek and possibly other European debt defaults create another 2008-type recession, this time originating in Europe? Will US consumers regain their mojo or will growing income inequality (equal to Mexico today and the US…