Role of FutureMapping in Crisis
Crisis (noun )
1. a stage in a sequence of events at which the trend of all future events, esp. for better or for worse, is determined; turning point.
2. a condition of instability or danger, as in social, economic, political, or international affairs, leading to a decisive change.
3. a dramatic emotional or circumstantial upheaval in a person's life.
a. the point in the course of a serious disease at which a decisive change occurs, leading either to recovery or to death.
b. the change itself.
5. the point in a play or story at which hostile elements are most tensely opposed to each other.
In more general usage, word “crisis” means “challenge-and-response situation or scenario” or even “breakdown or breakthrough in an established system of behavior or belief.” [Crisis - Modern Concepts Of Crisis, Contemporary Definition And Usage, Bibliography, http://science.jrank.org/pages/7604/Crisis.html]. Based on this understanding, we can define the “industrial / market crisis” as “disruption in normal course of events in the industry or market.” “Disruption” means a substantial decline of customers’ demand for industry’s product.
Three Causes, Three Types of Crisis
Crises occur in every industry with “surprising” inevitability. There are three distinct causes for crises. Accordingly, the mechanisms and natures of these three types of crises are different. [This categorization of crises was described in Paul Vainshtein’s article Crisis for Dummies in Strategic Management magazine, 01(05)2009, Russia]. However, manifestations of these crises are similar. As a result, it is easy to confuse one for another. Then, people seek for ways to overcome the crisis in the wrong place.
First root cause of crisis is a force majeure. It could be, for instance, hurricane, earthquake, or war. Customers affected or frightened by such event stop buying products that aren’t needed for immediate survival. As soon as force majeure condition ends and pre-crisis “status-quo” is recovered, people begin buying these products again, and crisis ends.
Second root cause of crisis is a substantial mistake in decision-making. “Substantial” means that its unintended consequences are widespread and difficult to overcome. Customers affected by wrong decision stop buying. Both right and wrong decisions, however, are in boundaries of the same paradigm. Hence, as soon as this mistake is discovered and corrected, customer begin buying, and the normal course of events is recovered. End of crisis.
The crisis of third type happens when current paradigm exhausts its “improvement potential.” Such crisis happened in wireless communications when paradigm of pager achieved its limit of improvement. There was no further improvement of pagers beyond text messaging. Customers stop buying products that don’t improve their satisfaction. New paradigm, cell phone, knocked at the door. As soon as breakthrough innovation hits the market, customers start buying it, but they would nevermore buy the outdated, old-paradigm products.
The crisis caused by paradigm shift looks indistinguishable from crisis caused by large-scale wrong decision. Only detailed analysis can determine which one is currently going on. However, their solutions are absolutely different. The recovery of consequences of large-scale wrong decision is within the same paradigm. The recovery of paradigm shift is “out of the box” of current paradigm.
Accordingly, the same behavior during such crises produces absolutely different results. There are two distinct courses of action the company could take during the crisis times. Company can either continue producing the current products or turn to breakthrough innovation.
Company that continues producing the current product should accumulate inventory during the crisis. If crisis was caused by wrong decision, it ends with surge of unsatisfied demand for product. Company sells its inventory at large premium and recovers its losses. However, if crisis was caused by exhaustion of old paradigm, this inventory won’t be sold, and company loses big time.
Company that turns to breakthrough innovation should properly go out of the box and risk with absolutely new product. If crisis was caused by wrong decision, customers will seek for an old product when crisis ends. Breakthrough innovation “comes ahead of time,” and company loses its business. However, if crisis was caused by paradigm shift and breakthrough innovation meets new expectations of customers, then such company becomes the market leader.
FutureMapping is capable of ahead of time distinguishing of these crises. Moreover, if crisis-at-hand is caused by paradigm shift, FutureMapping can efficiently pull any given industry from crisis.
Every further use of term crisis in this book means crisis caused by paradigm shift.
Paradigm-Shift Crisis: Tragedy or Opportunity?
Crisis is the turning point when current trends don’t work anymore. Crisis is an unstable condition that involves impending improvements of the industry itself, in its infrastructure, culture, and approaches.
Crisis is emotionally stressful and damaging to everybody whose life has been related to the success of current paradigm and whose efforts cannot succeed anymore.
Crisis is the point in the story or, rather, drama of entire industry when a conflict between former successes of current paradigm and its recent failures reaches its highest tension and must be resolved via tectonic paradigm shift. This is the moment in history when everything that was efficient and productive in the past becomes inefficient, counterproductive and even destructive – and people cannot understand why… Moreover, they cannot believe those who explain why – simply because these explanations, even very clear and logical, are counterintuitive.
Then, the new people come: those who don’t take such explanations as total nonsense, those who understand the reasons why old empires fall, and who can see the lighthouse on the horizon, envision the light of new, emerging trends. They become the New Leaders.
Want to be the New Leader? Then, open your mind to the light of the new paradigm and turn a deaf ear to those who explain why it’s “total BS,” counterintuitive and false. They simply don’t know what they’re talking about: their minds are rooted deep in the past. The better they know the old ways, the more they have achieved in that past, the less probably they can be converted to the new vision, to the new paradigm.
Is crisis inevitable? Yes, of course, it is. Like a wildfire that takes away the old, obsolete trees and bushes and cleans the space for the young, new ones, the crisis takes away the obsolete companies and industries and cleans the space for the young, innovative, aggressive new businesses. Crisis is an inseparable, inalienable portion of Mother Nature’s “plot.”
Can crisis be overcome? Yes, of course, it can, although in the midst of crisis it is difficult to see light at the end of the tunnel. Human history knew thousands crises, including as tough ones as the Deluge; they were overcome and left behind. Why the one your industry experiences should be different? There are three ways to take any crisis: give up, try to survive, and take it as an opportunity. The latter is for New Leaders. Their weapon of choice is FutureMapping.