The Ecology of Business: Entrepreneurship as a force of regeneration
"Can business be truly a force for good?" This question has been at the core of my exploration of the regenerative paradigm in recent years. Reflecting the mood of our times, my LinkedIn feed is often filled with dire warnings and urgent pleas for change such as "Our house is on fire," and "We're running out of time." All too often, businesses find themselves depicted as the villains of these narratives.
At the same time, amidst the negativity, a new vision of the future is slowly emerging. As it is becoming increasingly clear that our relationship with nature needs a radical overhaul, there are many signs that we're in the midst of a profound transformation of our worldview. One in which we reconnect to our interconnectedness with all of life, instead of viewing ourselves as separate from nature.
Historically, such shifts in understanding are not uncommon. For instance, Philipp Blom's 'Nature's Mutiny' illustrates how the Little Ice Age shattered age-old religious beliefs, eventually leading to the Enlightenment era. This era championed rational thinking, but it also intensified the idea that humans were separate from and dominant over nature.
The reductionist viewpoint that emerged during the Enlightenment, focused on simplifying complex phenomena, falls short when dealing with living, interconnected systems, such as climate systems, ecosystems, or society itself. As a result, we're seeing a surge in the recognition of our world's complexity and the importance of holistic understanding. This viewpoint encourages us to focus on the intricate network of relationships, rather than isolated components.
In essence, this perspective celebrates complexity. I am convinced we are entering the age of complexity—an era where we learn to thrive in it rather than fear it. After all, complexity and life are intrinsically linked. Instead of seeking to control it, we should strive to nurture it. Especially in business.
And business is no stranger to complex landscapes. This complexity has only amplified over the last few decades with intricate global networks becoming more fragile, technology advancing at unprecedented rates, and an accelerating push for planetary conservation.
From time to time, 'black swan' events like financial crashes, pandemics, or wars disturb the status quo, throwing us from one crisis to another. It shows us that too often, we operate under the illusion that we can foresee and control the future, setting up structures as though we exist in a stable, predictable world. But when unexpected events occur, they throw us into chaos.
Yet there are also businesses that thrive in unpredictable ambiguous environments.Prime examples of these are startups, which typically embrace complexity by their very nature. They are keenly aware that they are operating in a complex ecosystem of customers and other stakeholders and embrace the uncertainty, recognizing it as an opportunity to establish a market foothold.
They show us that embracing complexity provides extraordinary opportunities. As described earlier, The world around us isn't dead and mechanically organized; it pulses with life and creative intelligence. Consider the effortless functioning of our bodies or ecosystems — all operating without conscious interference. This inherent intelligence isn't exclusive to natural systems; human organizations such as companies exhibit the same properties.
A startup is nothing less than a company being born into existence and that process is organic.This recognition can mark a significant shift - from viewing economics as a 'rational' science to acknowledging it as an 'ecological' principle. Businesses aren't predictable machines within a static world; they are complex organisms within dynamic ecosystems. Once we understand this, we can begin to thrive amidst complexity, rather than being intimidated by it.
Through my experiences at Templafy, Borg Energy Storage, and now Spotr, I've witnessed firsthand how startups are continuously searching for and/or nurturing their unique identity and mission in the marketplace. This awareness forms the foundation for their self-organizing capability - one of the core properties of a living system. The mission and purpose of a business are the lifeblood that fuels it with vitality and energy.
Upon discovering its unique role within the broader ecosystem and translating it into a compelling product, a startup begins to unfold its potential. In the startup world, this phase is often referred to as achieving product-market-fit, when a product that truly resonates with the market begins to gain traction. This stage is typically followed by series-A funding, which aims to consolidate the startup's market position, as we are currently experiencing at Spotr for example.
Once a company transitions from being a promising idea to a reality that actively engages with customers, employees, and investors, the collective effort creates a synergy that is greater than the sum of its parts. This evolution often attracts customers, employees, and investors, making the startup a source of creative emergence and innovation power.
This process transcends rational decision-making and taps into deeply intuitive and existential aspects of business. It harnesses the inherent creativity and adaptability found in living systems that can't be planned or designed rationally. The success of a business lies in its nestedness within a larger ecosystem. This is what sets many startups apart from large enterprises, and enables them to outcompete them regardless of the billions their competition might have invested in branding and innovation.
Truly successful businesses serve something bigger and create value for customers and society that goes way beyond the value its reaps for its shareholders and employees. That's why the most successful businesses are disruptive; they not only deliver a product to the customer, but they also shape society itself (think Microsoft, Apple, Amazon, Google, Tesla, etc.).
Entrepreneurship carries a deeply revitalizing force within it. Great businesses are able to regenerate the community they are based in or the industry that they are serving. They often pioneer cutting-edge technology, which makes them the front runners of human evolution. Without entrepreneurial innovation, it's hard to conceive of a thriving future.
But as companies grow and expand, they often drift away from their essence and core identity. As organizations mature and scale, they tend to ossify in rigid structures and systems, losing touch with their original identity and their larger mission. Once this connection is lost, businesses lose their regenerative capacity and turn into mechanical, transactional organizations.
This usually transpires when firms abandon their original mission and adopt profit maximization as their main objective. When shareholder value begins to overshadow all other stakeholder interests, these large corporations, once celebrated for their disruptive innovation, can gradually transform into forces of environmental and social extraction.
So, to answer whether businesses can truly be a force for good, we need to distinguish between two types of business. The 'entrepreneurial business', characterized by dynamic entrepreneurship seeking to make a meaningful impact, and the 'corporate business', often represented by larger, established firms that may have lost touch with their original mission in pursuit of profit.
In the coming decades that sense of entrepreneurship that brought all successful businesses their success in the first place will be of vital importance for them to survive. In the future, their license to operate will depend on how they interact with the broader ecological and social systems they're part of. If not enforced through regulation, it will be driven by customer demand.
This transition will come easy to entrepreneurial business people, whether they work at large or small companies. But it will be hard to adapt for entrenched corporate bureaucrats. To thrive in complexity one needs to be able to reinvent themselves fundamentally. This is what regeneration is about, self-renewal, always in relationship to the wider context which is served.
Entrepreneurs serve as living examples of how complexity and chaos can be the fertile ground for innovation and new ideas. In this context, entrepreneurship, more than business itself, truly embodies the essence of regeneration. The ongoing cycle of creation, growth, and evolution within the entrepreneurial journey is a mirror image of life's inherent rhythm.
Indeed, it is these very entrepreneurs who seize emerging opportunities and advance human progress. They show us how business can truly serve as a force for good.