The new business model

My friend Babar invited me to a Jammu conference. We were sharing our stories. My story was on ‘Time’, his was ‘soft power’. Babar had done a lot of work in the region and was recognised and rewarded for his efforts in the region by various state groups. It was during our interaction that we not only realised how overlapping our work was but also that society needed a new business model.

What was the overlap? Divergence was a reality for both business and society. It ran from stars to stock markets from aspirations to failures from country to a state. Divergence was a fluctuation that existed in patterns, in data, in thought. And this seemingly random fluctuation was connected to another random fluctuation. Now one may say that everything is connected, however, few can demonstrate this connect.

Complexity was intrinsically simple and hierarchal (Herbert Simon). Complex systems had a similar character. This is why a capital market business had a similar complex pattern like one involved in running a cooperative in Kashmir or simply running J&K.

Human initiative was about understanding and channelizing this divergence. It was about anticipating and measuring volatility that comes with this divergence. But how aware were the players (business, state and community) of the big picture divergence. In our paper on SSRN, we illustrated how divergence was repetitive and how divergence was not specific to market prices but also any organic data set. How something as generic as growth and decay in search data from Google (Researching Google Search) had a predictable seasonality associated with it.

So, is this the stone age of business? Big business does not understand this big picture divergence. It does not understand how wealth creation accompanied wealth disparity, how consumption accompanies asset inflation, how increase in banking is connected with eventual credit decay. There is a clear disparity between the actual societal role of a business and what it is actually doing today.

We reward a business for the profit it makes and a businessman for philanthropic contributions. But rarely do we hear a generational auto manufacturer getting up and saying making cars and putting them on roads takes us away from energy independence, takes us away from a better town planning and takes us away from healthy consumption habits. Now one may say that chaos is how a society organises itself. Everybody has a role to play. Efficient systems always have a chance to fight inefficiency. Do we really have a level playing field? Does the small business really have a chance to fight a generational business in causing a real positive change?

The ostrich business approach, “the society is not my problem”, has taken away businesses from their real societal role, while the problem dynamically evolves itself from its historical simple characteristic to a more complex, intricate, harder-to-solve problem. And since the problems have become generational in nature, problem ownership is harder to assume. “Why should I solve the problem created by the previous generation?” It’s tougher to change the tragic destiny linked with “commons” to an advantage. It is mainly because the big picture divergence needs more resources, more collaboration and more giving. The mismanagement of commons feeds to divergence, causing social unrest and economic disruption.

Can we change this trend? Babar’s initiative was an attempt to drive positive change at the grassroots level while maintaining business profitability. A new business model is what worries about climate change, conserves natural resources and addresses community problems while building the state.

This is when rhetoric becomes reality and making a country great could start from a state initiative. And what for Babar was “Mera Bharat Mahan, Kashmir meri jaan” could be for you “Mera Bharat Mahan, Bombay, Dilli, Kolkata, Jaipur meri jaan”.

The author is CMT, and Co-Founder, Orpheus CAPITALS, a global alternative research firm