The progressive business model.

“It's not possible to deduce the performance of a business by looking at the shine on the Chairman's car”

Business has been around for ‘ever'. The modelling techniques have not changed over the millennia so what is it that defines the model?. The subtle headline may give a clue that it is progress that dictates the business model, progress, which includes efficiency and profitability. Over the long millennia, we have learned a lot of lessons, some quite simple and some very complex, and together the sum total of all those lessons in ‘how not to do it', outline the actual model of ‘how to do it'.

We learned, in the early stages, that added value has to be provided. Stones for making tools had relatively little value, whereas crafted tools and weapons were worth much more. In fact, the more input in terms of added value you can contribute, the more chance you had of being able to trade at a profit. Added value could come from all sorts of efficiencies from economies of scale, use of waste and specialised knowledge. If an individual had what can be called the business edge, he really did have an advantage and he could be very successful. That is, until the competition learned more about the edge. The pendulum of success might swing toward the competition if they were to be able to gain the edge and combine what they knew with what had been learned by others. Of course, no one wants to loose the edge and the trader in the position of losing it will naturally want to regain it. Perhaps through further efficiencies or reduced profits or even sometimes, underhand means, the edge will rally backward and forth between various key players. The undercurrent of what has happened is that progress has occurred. The early traders in stone tools would not trade very well in the much sharper modern world. We have learned our lessons.

These lessons have come at a price and the price has been innocence, in the process of learning the lessons, we have totally lost our innocence. We have become sharp, attentive to the potential for mistakes and eager to get bigger, better, more responsive, more profitable and a million other things besides. Broadly, this is what progress is about, the nuts and bolts of modern life which is run at a pace that would make our ancestors eyes water. I'm not sure what early man would have made of a man that cannot make flint tools nor do many other practical things but who makes his living on buying and selling tools which have yet even to be made and may not ever actually be made. The possibility that there would be another man, making a living solely gambling on whether the first man will trade at a profit or loss and being able to make a profit for himself irrespective of the outcome would have been mind boggling. But there has to be someone somewhere actually making the tools. I know this is a gross oversimplification of how modern business works and I reject comments that the reason it is so is because I do not understand how business works. The story will over the next 40 years unravel and in doing so provide an understanding of how man has been the victim of his own success and that none of it could have been avoided because it is instinctual in the make up of man. The destiny of man was set at the creation of man and that in itself suggests something rather different to our current collective understanding. If man was in such a strong position to deal with any problem to enable it to reduce, he would have done so before he decided to go the course he has.

So, the short lesson in business tells us what?. It tells us that man is greedy and feels he is worthy of everything he is able to provide for himself irrespective of how much it injures or hurts those around him. It tells us that he will lie and cheat to get himself into a position to manoeuvre those around him and that the reason he does this is because he feels he has a better understanding of the situation and more rights than those around him. It tells us that he believes in himself above all else. It is probably true that most of this is done to provide security for himself and those around him but the security is subject to the same rules as the progress in that it has to become more complex as time passes.

If we were looking for a solution, we could look at how we might affect the resources we rely on to proceed. Those resources as diverse as raw materials on one hand, to food and the availability of labour on the other will not be inexhaustible and certainly will not be sustainable. We could turn the clocks back to a time when these problems did not exist and set our goals for some form of stasis accordingly, but how would that be possible. We cannot even contemplate the possibility of a reducing population yet we acknowledge that this alone will present the biggest challenge to us over the next 40 years. The first argument would be over how to reward the reducing population. When we introduced nuclear energy, there was an enormous vacuum within that specialisation and there was much incentive to learn because the people who learned in the early stages became very powerful. This was only possible because competition broadened our horizons. If we planned a reducing world population, how could we manage a simple area like safe production of nuclear energy.