English | EN The Fine Art of Destructive Recreation by Joseph Pine
Oct 9, 2014
Economies evolve, produce wealth, and remain vital when the process of ever-changing markets, offerings, and enterprises “incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.” The famous Austrian economist Joseph Schumpeter told us this in his groundbreaking book from 1947, Capitalism, Socialism, & Democracy.
To withstand the Schumpeterian gale of creative destruction, the enterprise must be “destructively recreating itself over and over again by innovating within the enterprise at least as much as is going on in its ecosystems. Anything less and the enterprise will eventually get blown over by others moving faster, operating better, and creating greater value.”
The situation today is essentially the same however more intense at the same time. Schumpeter’s waves accelerate. We used to think that:
- goods and services were enough;
- we could invent great products & mass produce them for years;
- materiality conferred advantage;
- the best way to manage was to optimize the enterprise.
DEAD WRONG! Now instead we must:
- stage experiences and guide transformations;
- mass customize & constantly renew our offerings;
- fuse the real with the virtual;
- adopt a way of managing with the intent to vitalize the enterprise.
In this context, Joseph Pine puts forward The Law of Vitality: only the enterprise that attains vitality, through its incessant destructive recreation, produces the wealth necessary to survive!
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