Equilibrium and fractal business models
A fundamental law of physics (in one formulation) states that left to itself any closed system will always change towards a state of equilibrium from which no further change is possible. One example is swinging a pendulum… if you hold it up to one side it’ll be in a state of extreme disequilibrium, then as you let go and it swings back and forth, gradually losing energy, it’ll come to a standstill.
Other examples include many media agencies and advertising agencies. You know why.
Someone said to me today, ‘but we need to prove the ROI – how much is it [implementing a vision that gives power to the people, to cut a long story short] going to cost and what will the return will be? How do we show that listening to the customer has better ROI than direct marketing?’
Errr…. I’m not even going to answer that.
Our obsession with plotting loads of numbers in loads of rows in so-called forecasts, that ‘demonstrate ROI’ may be a comfort blanket for some, but are forecasts ever accurate or meaningful? If we look back at them later (which we seldom do thoroughly, because they’re so irrelevant and unfriendly) we’ll be astonished (or not) at how far off the mark we were.
Way too many business models set themselves up for equilibrium. A scalable business model should be fractal in nature… infinitely scalable, independent of any company’s resources. You should be able to zoom all the way in… or all the way out… and see a repeatability, recursiveness and simplicity. We should focus on setting ourselves up to leverage the unforeseen opportunities, rather than attempting to predict the unpredictable and produce reams of comfort crap on autopilot.
The rotary motion of a harmonograph produces a series of complex drawings influenced by relative frequency, amplitude and direction.
Brands should communicate with a harmonic balance between relative frequency (WHEN… don’t interrupt), amplitude (WHAT…loudness…don’t shout / broadcast) and direction (WHERE… targeting, permission).
Companies should seek to produce beautiful pictures… not chaos (disharmony / dissonance). Business models that can be boiled down to a simple, beautiful picture tend to have inherent scalability.