Open Letter to CEOs

Dear CEO

It's tough being a CEO today. In many ways it's more like being a football coach. Here today, gone tomorrow. Customers, shareholders, suppliers, employees, unions, global competitors, millennials all shouting for your attention. All the while the global economy is threatening to go into meltdown while others yell disruption and tell you that robots will soon take over not just your company but the entire planet.

Yes it's tough. We know. Here is a little more sobering news.

Research has shown that organisations scale according to a very precise half-life of ten years. This means that half of new companies today will be gone in ten years. And 97% will be gone in fifty years.

There are good reasons for this. Essentially in a competitive environment economies of scale become the driving force creating a Darwinian landscape of survival of the fittest. This type of growth is termed sub-linear which practically means competition drives down costs and margins and shakes out the less efficient at the same time.

Here is the paradox. Intuitively you know about the survival threat of competition. (Perhaps you did not know about the half-life rule and thought that any company that worked hard could grow indefinitely?) When you are faced with declining profits - and let's be brutally honest here - what is your first knee-jerk reaction? That's right, cut costs. And if that doesn't work have a fire sale of the family jewels.

There is just one problem. This strategy doesn't work. Efficiency is never the key to the 3% Club. Your best bet is to cash in your chips while they are still worth something and escape to Panama or somewhere similar.

Liquid Intelligence is the Key

Members of the 3% Club do something special. Firstly they understand that the foundation for long term survival is the product of intelligent thinking and intelligent action. Secondly they understand the need for a dual strategy, the one to drive efficiency and the second  to drive evolutionary capability. Thirdly they know that intelligence is both power and beauty and it needs to be able to flow freely between the two strategic pillars.

Qualifying for the 3% Club

If you are serious about your organisation gaining access to the most exclusive and prestigious club on the planet, we can have an interesting chat.

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Sunday, 29 November 2020
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