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Strategic Planning – Malthusian Catastrophe and Success in a Recession

Strategic Planning Expert Robert Bradford

Strategic Planning Expert Robert Bradford

Reading an article about Darwin this weekend, I couldn’t help but think that evolution and business strategy have a lot of interesting parrallels.  One that struck me relates to a couple of fascinating stories – the first about the horrible rise of the deer population on a resort-covered island in the Carolinas after hunting was banned.  Of course, the deer had a huge population explosion, and then began to eat everything – including some very expensive landscaping.  It was not unusual to see the corpses of starved deer, and groups of 3-4 could be seen bravely eating geraniums out of window boxes.

The 19th century English political economist Thomas Malthus commented that populations can experience what is now known as a “Malthusian Catastrophe” of runaway growth when there is an increase in food available.  Since resources are rarely infinite, such explosive growth often leads to this kind of problem.  The same can be seen in business – when money is easy to come by in a given industry – or using a given practice – the population of companies exploiting that resource explodes.  Two excellent recent examples are the dot com boom and bust of the 1990s and the more recent real estate boom and bust.

How can we use an understanding of these pressures to succeed during a recession?  We should be aware that everyone – individual consumers, employees, companies – is looking to graze in the window boxes where there is still money to be had.  In the late ice ages, isolated wooly mammoth populations evolved to be smaller, more efficient, and able to survive on less food when faced with similar catastrophe.  Human beings, on the other hand, under the same pressure, developed the use of tools and language to enable their populations to feed on a wider range of foods.

Will your business be a mammoth during this recession and become smaller to survive?  Or will you develop capabilities that broaden your markets?  Ordinarily, I’d strongly recommend a tight focus, but I can see that for some businesses, learning to feed on different resources may be an appropriate strategic option.  I’d be very interested in hearing what is working for people in either circumstance.