Future Ready Now: Here comes the Extinction Event
SIgnals
To know what a Future Ready Business is, the first thing we need to know is what it’s not. Especially since so much of the daily news we consume is obsessed with the biggest of the dinosaurs, so much so that they miss the signs of impending collapse. Here’s a few recent stories that signal to us that a profound transition is underway.
Rethinking… Economics??
Before we get into this article, I think we need to really understand who this is coming from:
Angus Deaton is the Dwight D. Eisenhower Professor of Economics and International Affairs, Emeritus, at the Princeton School of Public and International Affairs and the Economics Department at Princeton University. He is the 2015 recipient of the Nobel Memorial Prize in Economic Sciences.
Much of the late-Industrial Era economic justification for how businesses have been run came directly from the work of economists like Dr. Deaton. Supply-side economics, shareholder primacy, trickle down and similar theories that have driven “Greed is Good” assumptions came first from economists in elite business schools. Dr. Deaton has probably taught his share of future Captains of Industry.
And this is published by the International Monetary Fund, for crying out loud. That’s not exactly Mother Jones.
Dr. Deaton is not just embracing new ideas, he’s taking apart some of the most fundamental theoretical foundations of the neoclassical economics that have ruled business schools for decades. Consider:
Efficiency is important, but we valorize it over other ends. Many subscribe to Lionel Robbins’ definition of economics as the allocation of scarce resources among competing ends or to the stronger version that says that economists should focus on efficiency and leave equity to others, to politicians or administrators. But the others regularly fail to materialize, so that when efficiency comes with upward redistribution—frequently though not inevitably—our recommendations become little more than a license for plunder.
We are often too sure that we are right. Economics has powerful tools that can provide clear-cut answers, but that require assumptions that are not valid under all circumstances. It would be good to recognize that there are almost always competing accounts and learn how to choose between them.
Economists’ enthusiasm for technical change as the instrument of universal enrichment is no longer tenable (if it ever was).
So, that’s an old academic questioning some of the basic assumptions he’s taught for generations. So what?
This is huge, that’s what!
Deaton is knocking out the intellectual foundations of how we have practiced late 20th century /early 21st capitalism — the underpinnings of the Industrial Era. Without these assumptions, most of how the Industrial Era has manifested in our lifetimes becomes much harder to justify.
I don’t have any illusion that one little article is doing to upend the old system, but it’s a chink in the armor — and one of many emerging chinks, as one of my favorite books, Econocracy, makes clear.
And I don’t think the emperors are going to stop riding around any time soon, but it is starting to look like they forgot their britches.
WFH transforms employment, even if the boss don’t like it.
This article from February 2024 focuses on Australia, but the findings are powerful — and they indicate that corporate efforts to reimpose the Industrial Era command-and-control mechanisms that business leaders grew up with no longer fit, at all. No matter how hard they fights to get people back into the office, this looks like a long-term losing proposition.
More of us have been in paid work this past year than ever before. A big part of that is because more of us have been able to work from home than ever before.The proportion of Australians in paid work climbed above 64% in May last year, and has stayed there since. At the same time, unemployment has hovered around a half-century low of 4%.
In April last year, female unemployment fell to what is almost certainly an all-time low of 3.3%….
Making workers return to the office for jobs that can be effectively done from home would unravel the economic benefits that have been achieved.
Fewer people, especially women and parents with young children, would put themselves forward for work. The pool of skills that employers are looking for would shrink. And job-matching in the labour market becomes less efficient.
The result would be more Australians unemployed, and more Australians dropping out of the paid workforce, than if we had continued to embrace working from home.
The death of shopping
https://www.vox.com/money/23831438/shopping-retail-theft-target-walmart-macys-losses
Here’s a case of the emperors losing their pantaloons that no one would have predicted when I was in high school:
Whether it was spritzing on perfumes in a department store or fantasizing about a more organized home in the seemingly endless aisles of Bed Bath & Beyond, shopping was once a far more pleasurable experience than it is today. It was both a social and languid activity, an opportunity to connect with a friend or explore our materialistic desires in contented solitude. Retail therapy, we called it….
Understaffing, inventory problems, and heavy-handed theft prevention measures are hardly new to the retail industry, but the problems have become more commonplace in the last few years, when the dial of frustration and discomfort turned higher. Yet the through line of why shopping from beyond the comfort of your home feels so miserable now has less to do with the pandemic’s disruption and everything to do with retailers unable — or unwilling — to invest in stores, including the labor that makes a shopping trip go smoothly or not.
Despite what companies may want you to think, nearly every issue you encounter while shopping is a result of bad working conditions for retail employees.
That is as good an example of businesses getting stuck in a dysfunctional model as any I know. At this point, they’re solving their hunger by chewing off their own arm, instead of rethinking the model to make it more valuable to the customers they need. And the store closings and plummeting share prices only reinforce that their emperor isn’t just missing his pants, he’s lost his horse.