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Mapping and Understanding Change

August 24, 2020 | By: Jon Budington | Tags: , ,

Many years ago, in an attempt to create a broader middle class, the Clinton administration experimented with housing. They created a US mortgage market financed heavily through investment banks—which eventually led to the 2008 financial crisis—which in turn created greater wealth inequality and a lower labor participation rate—which created the frustration and anger necessary for a campaign based on nationalism and misplaced blame—which gave us a White House that promotes hate and anger—which led more Americans to understand and participate in the Women’s March and the Black Lives Matter movement—which informed the decision to create a diverse Democratic presidential ticket—which, last week, promised to grow America’s middle class.

This is some optimistic thinking.

As I’m sure all of you know by now, I am a philosophical optimist. I believe change and optimism are inextricably linked. As a reminder, optimism was a term developed by the German philosopher and polymath, Gottfried Leibniz. His invention of calculus, the math of movement and continuous change, helped Leibniz develop his “best of all possible worlds” theory, also known as optimism. I believe we are all living in a giant calculus equation.

Most of us prefer simple arithmetic. We go to college, get the right job, learn some practical skills and become upwardly mobile. We live comfortably in these algebraic confines until something like COVID shows up. Suddenly, everything is changing; our lives are in flux. But the truth is, continuous change has always been the case. The difference today is the slope, or rate of change. For most of us, it’s nearly vertical.

I’ll now admit that college calculus wasn’t one of my favorite subjects. I’ve only recently recognized it as the basis for optimism. But I now know that planning for continuous change requires a method for identifying it and understanding its significance. My method is to read, ask questions and listen, searching for definable changes in behavior, fact or belief. I organize these observations into three categories.

Economic change is readily accessible information. It is about facts that our lives and businesses rely on—the interest rates for loans and the ability to access that capital. It’s the tuition we pay to secure our children’s futures and the jobs available to them as they enter adulthood. It comes to us as pure data, and as I’ve pointed out in previous emails, it’s bleak right now.

Scientific change is where I list the latest thinking and inventions that help us make progress. These are ideas like the science of climate change or the effects of plastics in our oceans, but also technological advances in fields like healthcare science and alternative energy. It’s also where I track the endless procession of new businesses and devices created by advancements in digital technology.

Social changes evolve the intangible rules, traditions and beliefs that help our communities function. This category includes movements and causes, laws, how we pray, what we protest and how cultures build tribes inside our communities.

 

How COVID is changing the world

With clarity comes questions—good ones

In response to my last email, Only The Curious Will Survive, some of you asked why not begin with curiosity. I believe this chart helps illustrate why optimism must come first. Those that ignore the changes around them, or don’t have a full understanding of the changes, will inevitably ask the wrong questions.So, here are some of the questions that I’ve been pondering these last few weeks:

What does the future hold for my commercial real estate clients?
COVID has proven that while working from home has its challenges, technology and management are improving. Many of us won’t return to our old office habits. How will the current stock of office building inventory evolve?

What will higher education become?
Online learning platforms and on-the-job training programs have already taken a portion of the secondary education market. And as we now find ourselves questioning the need to physically attend, is the in-person college lifestyle worth the added cost? How much more? Is it possible to restructure the higher education business model into something more flexible?

Do associations and member-based organizations have an opportunity here?
As we’ve all adjusted to becoming less physically social, do organizations that create intangible communities become more relevant? What new products and services could they offer?

 

I could go on, but we’re already well past my 600-word self-imposed limit.

So in summary: Evolving beliefs drive new behaviors—which become habits—that require businesses to make adjustments—or those businesses will become irrelevant. How do we make those adjustments?

That’s empathy, but we’ll need to cover that in another post.