What Do We Mean by Creative Destruction?
Earlier this month Michael Tompert, a San Francisco digital imaging artist, violently destroyed some brand-new Apple products for the sake of art and the results are a collection high resolution prints with a statement “our relationship with fetish, fashion, freedom, and bondage.
The collection of giant prints including one called “Targeting” that shows a 3G iPhone that’s been shot with a Heckler & Koch handgun. I guess we can call it “creative destruction.” What’s “creative destruction?” It is of communist origin – a term originally derived from Marxist economic theory which refers to the linked processes of the accumulation and annihilation of wealth under capitalism. These processes were first described in The Communist Manifesto and were expanded in Marx’s Grundrisse “Volume IV” (1863) of Das Kapital.
It is about economic innovation, the way in how capitalist economic development arises out of the destruction of some prior economic order. Only since the 50s the “creative destruction” has become more readily identified with economist Joseph Schumpeter who popularized it as a theory of economic innovation and progress. The idea is company needs radical innovation (radical new proposition and business design) and even the most exceptional, enduring corporations cannot continue to beat the capital markets indefinitely – there is no built-to-last. In order to continue to maintain excellence and remain competitive, they must adopt the dynamic strategies of discontinuity and creative destruction. In a simple word-innovation.
Foster and Kaplan (McKinsey) in the late 80s examined more than 1,000 companies in 15 industries and discovered that even the best-run and most widely admired companies are unable to sustain market-beating levels of performance for more than 10 to 15 years. This was in the 80s’, with today’s technological progress, we are talking about 5-8 years.
Their research suggested that: “Corporations are built on the assumption of continuity; their focus is on operations. Capital markets are built on the assumption of discontinuity; their focus is on creation and destruction. The data present a clear warning: Unless companies open up their decision-making processes, relax conventional notions of control, and change at the pace and scale of the market, their performances will be drawn into an entropic slide to mediocrity.”
Every company should engineer its own “creative destruction” while they have the resource base to do so and have the luxury to examine and explore new organization design and new mental models. We use strategic foresights and scenario development to show clients the future “creative destructions” that could happen to their industries. They are so real that executives can actually feel the future. Maybe an idea is to take a framed copy of their vision and mission statement, shoot it with a Heckler & Koch handgun and hang a giant high resolution print in the board room to remind them. More business for Michael Tompert and his digital print shop.
Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.
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