Unsustainable Actions = Collapse
Note: This is not about global warming
If the actions we are taking are not sustainable, they will lead to collapse. That is the simple law of the universe that we struggle to fully comprehend because life occurs now and the results of our actions occur later.
Unsustainable actions, if left unchanged, will always result in collapse. It’s the safety switch built into all of nature. If an animal population grows too large, they begin to starve; If a plant takes over an area and pushes all other plants out, a disease or insect will wipe it out. The only question is, how long can an unsustainable action continue, unchecked, before this inevitable collapse?
We humans believe we can outsmart this universal law despite there being no history to prove this to be the case. Businesses collapse, societies collapse; negotiations, treaties and borders, whole sectors of the economy, personal relationships, governments, and on and on and on, all collapse under the weight of persistent unsustainable action.
What we have been able to do is delay collapse. Whether quantitative easing, genetically modified organisms or pouring money into customer acquisition, we can engineer delays in the collapse. With enough money and manipulation, we can sprint through the perils of unsustainability to reach the oasis of homeostasis.
We must realize this is a sprint and that the terrain we are navigating is perilous: But we don’t need to be stressed out, running around with our hair on fire. Think more like a special forces team moving through an unstable urban environment: Their mission is clear, their moves deliberate and coordinated, and they conserve resources while moving quickly and acting decisively. If they do encounter danger, they keep moving, keep making decisions so as to avoid becoming pinned down and requiring additional resources they either don’t have or which would risk greater exposure.
We need to go in with a plan: We must have a clear objective and, to the best of our ability, script the path. Sure, no plan survives the war; but to move in a deliberate and coordinated fashion requires everyone to know where we are, where we are supposed to be and where we are supposed to be heading. With this kind of clarity, making adjustments is quick and efficient.
We need to communicate: To get a 360-degree view of the landscape we’re moving through and to make those adjustments while remaining in sync, we need to over-communicate. It’s rare to see a team communicate too much, and it’s nearly impossible for new teams to do so. Using data as if it were night-vision goggles to identify obstacles or opportunities that are not clear to the naked eye, the team can remain on the offensive and avoid costly mistakes.
Companies in or approaching an unsustainable state often aren’t operating as just described, because everything is ok today; there is money in the bank account, we are getting new customers, we have great employees, the investors are happy. But…
What are the underlying fundamentals saying?
What is the cost of customer acquisition?
How many new customers are coming back?
What is our SKU efficiency and is it improving?
What product, ad or page is performing best (or worst) and why?
What is our margin by channel?
How effective and happy are our employees?
What is the burn rate on our investment capital? And is it slowing or when will it slow?What is the economic environment and forecast?
What are the macro trends in our market?
Where is the point of homeostasis?
It’s the underlying data that gives us the clues we need. Impending collapse shows up in the answers to the above questions before it shows up in topline sales. It might be sunny, but the barometric pressure might be dropping like a rock.
If you choose to operate in an unsustainable manner, then best to act accordingly.
Originally published at Full Stream Group.