The Secret of My Suce$s may not be Michael J. Fox’s best-remembered film, but it contains a critical message for doing business in today’s uncertain environment. Released in 1987, when the US economy was slowing and the year of the Black Monday stock market crash, the movie is set in a major corporation that has begun retrenching and firing people. Our young hero takes advantage of the situation: officially working in the mailroom, he occupies a recently vacated corner office and begins taking daring initiatives on behalf of the company on the authority of his bravado alone.
As expected, the masquerade is discovered, and everything he has built begins to unravel…until he convinces a few critical people to believe in his counterintuitive plan for recovery. Rather than cutting costs and retrenching, he argues that the company should be expanding aggressively and investing. Competitors are retrenching, and he argues that this leaves a lot of empty terrain to be occupied.
According to the dominant economic orthodoxy, this is madness. And yet, it just might work.
One of the important features of the modern economy is that it is built on confidence. The value of currencies, stocks and even physical capital is not limited to tangible features. It also depends on demand and, ultimately, desirability. The less people believe in the potential of the current situation, the more they retrench, and their pessimism literally destroys economic value. Conversely, high levels of confidence foster investment, expansion and creation of value.
Telling ourselves a new story about the economy
In “Cognitive Biases in Times of Uncertainty“, John Hagel explains why this is so. The narratives we tell ourselves influence our vision. If we focus on a risk-averse narrative, we will see threat everywhere and focus on short-term gain. On the other hand, if we focus less on risk and more on opportunities and reward, the world looks very different. Here are just a few examples:
- Social entrepreneurs are often just people who have stopped looking at human underdevelopment as a problem and have started looking at it as opportunities for entrepreneurship. From M-pesa mobile-phone-based cash payments to promoting products by sparking debates about how women’s bodies are portrayed, social entrepreneurship takes many creative forms.
- We’ve all received the e-mail listing the bad predictions made about a long list of success products and people, from the personal computer and telephone to the Beatles. The people who made those predictions had the wrong mindset to properly evaluate the situation.
- The creation of the Economic European Community in 1957 was a daring reframing of a devastating problem: recurrent wars between France and Germany (1870-1, 1914-1918, 1939-1945). Robert Schuman, Jean Monnet and Konrad Adenauer and others had the vision — and political courage — to argue for a rapprochement of France and Germany based on the joint administration of the raw materials of war (coal and steel). In this era of short-term politics, it is easy to forget how precious the past 67 years of peace in Europe are.
- Regardless of how you rate Barack Obama’s presidency, it is difficult to deny that his hopeful “Yes, We Can” narrative was a major factor in his 2008 election. His politics directly confronted the fearful, risk-averse attitude that had been pervasive in US politics since September 11, 2001 and his personal history was symbolic of the capacity to overcome the fragmentation of American society. Barack Obama was much more than a man or a politician: he was a positive narrative that helped millions of Americans imagine a different and better future.
So what are you doing to use the economic crisis as a springboard for success? At Prospero, we help organizations cultivate change as a source of value creation and innovation. We can help you improve your stakeholder relations to move from conflict to collaboration. We can help you reframe your mindset to see how to unlock the energy and enthusiam of your employees. We can help you think differently about your strategy to identify untapped opportunities. Contact us today about speaking at a conference, conducting a workshop or serving you in another way customized to your specific needs.
We agree with Albert Einstein that “We can’t solve problems by using the same kind of thinking we used when we created them.”