When all around you are retrenching…
We are once again at that unenviable part of the business cycle when uncertainty looms high, the spigot of easy money has suddenly been shut off and as Warren Buffett famously said (in his annual letter to shareholders of Berkshire Hathaway In 2001), “we’ll see who has been swimming naked.” What’s going to happen is predictable.
Companies that only recently were talking big plans for innovations like the metaverse are now touting their commitment to “the year of efficiency” (looking at you, Meta). All that innovation nonsense? Bah, humbug — we’re back to the core, back to repeatable and predictable business and jettisoning all that silly exploration of ‘what’s possible’ stuff. Take on uncertain investments? No ma’am, we’re strictly back to grinding out the day to day. For our take on the negative consequences of this behavior, see this article.
The thing is, while it may be all-too-human to want to crawl back into the safety of a well-understood part of your business when facing big unknowns, that isn’t going to impress your investors. We can demonstrate this, using a metric we call the “Imagination Premium.” Our hope is to get this metric into more conversations as we believe it is a perfect antidote to the backward-looking performance measures that so often are used to assess corporate performance.