Shell Shocked?

We've been through some turbulent times in the past couple of months. As a whole, the UK has voted to leave the EU; the Conservative party has a new leader; the country has a new Prime Minister; the Labour party is in turmoil whilst Nigel Farage, the UKIP leader and arguably a major architect of the referendum, has deserted the political process altogether leaving his party looking for a new leader; government policy has been torn up and the City is trying to cope with the unprecedented uncertainty it all brings whilst the Bank of England has reduced interest rates in an attempt to settle the markets. Oh, and then there is the Olympics - did you see the crash in the woman's road race? No one really knows what will happen next.

Whilst this has been going on I have been taking my mind off events by keeping busy with other things - one of which has been to read War & Peace by Leo Tolstoy. Not a book I have always particularly wanted to read but I was inspired by the BBC's dramatisation earlier this year and thought I would be up for the challenge. It was reading it that gave me the idea of this blog. Please bear with me - the extract below, which I read during the political meltdown in the aftermath of the referendum, in my opinion provides a fantastic summary of how we should look at our current situation, regardless of our views on the politics.

The context for the extract is after the famous Battle of Borodino at which both the French and the Russians claimed victory, when the Russians had abandoned Moscow to the French, and Prince Andrew had just died. Pretty dramatic events by anyone's standards. Tolstoy is trying to justify history but there are some lessons for today...

'Man's mind cannot grasp the causes of events in their completeness, but the desire to find those causes is implanted in man's soul. And without considering the multiplicity and complexity of the conditions any one of which taken separately may seem to be the cause, he snatches at the first approximation to a cause that seems to him intelligible, and says: 'This is the cause!' In historical events (where the actions of men are the subject of observation) the first and most primitive approximation to present itself was the will of the gods, and after that, the will of those who stood in the most prominent position - the heroes of history. But we need only penetrate the essence of any historical event - which lies in the activity of the general mass of men who take part in it - to be convinced that the will of the historic hero does not control the actions of the mass but is itself continually controlled.'

The opening text from Chapter 1, Book 13, Volume 3 of War & Peace by Leo Tolstoy.

Are we therefore leaving the EU because the Remain campaign didn't work or because the Leave campaign was simply too good? Did claims and counter claims get out of control and the electorate rebelled? Were the campaigns simply too negative and the most charismatic leaders won the day - regardless of message substance? Was David Cameron at fault for calling the referendum in the first place (interestingly if he hadn't offered the referendum during the 2015 election he may well not have become Prime Minister)? We simply don't know.

Referring to the Tolstoy extract, the 'mass' he refers to can be seen in our context as the voting people of the UK. It suggests that the situation we now find ourselves in is not the result of the actions or desires of the political elite, or the arguments put forward by both sides but in fact, the simple result of the 'action' we all took on the 23rd June. To support this one only needs to look at the extraordinarily exaggerated claims made, in some cases lies. Can anyone claim to have both understood and believed them? It is more likely that for whatever reason, the will of the people was that the EU was simply not right. Ultimately we made it happen, whether we agree with the result or otherwise.

So what does this mean for invention?

When it comes to business and the need to invest for the future, the most important requirement is generally recognised as stability, both of the economy and politics in general. Anyone who voted to Leave in the referendum was of necessity voting for a degree of uncertainty, not that short term uncertainty is necessarily a bad thing, but it does make investment more challenging.

Looking further afield the US presidential elections are adding to the uncertainty - Donald Trump says he will look at US NATO commitments 'on a case by case basis'. He also wants trade negotiations to ensure the US aims are taken into account as a priority. As a relatively small nation, albeit with a relatively strong economy today, we can only expect negotiations to be tough now that we are no longer to be part of the EU trading block. Uncertainty - again - for business.

So if we accept the environment is relatively unstable is this good or bad? We know change can open up opportunities. Therefore the ground is fertile for invention, even in these uncertain times. Ideas are often triggered by a change to our environment, and opportunities that didn't previously exist will open up.

However, where stability is more important is in investment. It is all very well inventing something - what really needs to happen is the investment and management to ensure it is delivered successfully. A degree of stability can therefore be important. Overall it means what we really need for successful inventions is both stability and instability!

Instability opens up opportunities

A business can be strained by limited or falling revenues, by costs rising in an uncontrolled way, or equally for younger or fast growing businesses by limited available funding. Both cash flow and funding will also be impacted by the broader state of the economy and the positions of individual customers and investors respectively. A business can therefore choose to withdraw (or close down) or can use the pressures to drive new ideas, new approaches, and potentially even new businesses.

It is interesting to recall the evolution of some larger companies over recent decades. Take Microsoft for instance - I remember when Bill Gates took on IBM and won, in those days you couldn't make a mistake by taking the MS solution (except perhaps if you are an Apple diehard like Kathryn seems to have become!) Today Microsoft, whilst still undoubtedly a successful business, struggles more in new areas like mobile. They don't lead in mobile hardware or software despite previously having the most successful desk top operating system and after buying Nokia's handset business. They are no doubt big enough to survive but will they be a leading inventor in the future?

Google is arguably on an earlier phase in its lifecycle than Microsoft but I can see the same signs in what they are doing. Antitrust lawsuits are rising; they spend an extraordinary amount of money on new ideas - most of which fail - and they increasingly 'buy' the new technology they need in the form of company acquisitions rather than 'inventing' it themselves. All this changes their culture, makes them more defensive and reduces their ability to invent.

Ultimately Kodak is the classic example of a massive corporate that - in the face of new technology - completely failed to invent. Of course, they went under.

In the face of instability companies and individuals can choose to invent, reinvent, invest or simply do nothing. We know where change is occurring opportunities will open up. Those that ignore them will be overtaken by those that exploit them - and there will always be someone doing the exploiting. Instability can drive opportunities as well as problems - it really just depends on how you look at the situation - are you an inventor or do you look for ways to manage?

So is the referendum a good or bad result?

As an inventor I like to think I look for opportunities, as well as ways to manage pressures from instability, whether that be within existing business or application of relevant ideas elsewhere.

However as Tolstoy suggests, while each individual makes their own choices, usually the overall result also depends on the choices of others - that of the 'mass'. Therefore companies can make innovative decisions, but in the end they will only win if others (companies and consumers) choose a route that supports it - there is no guarantee of any single innovation working.

It's clear this will not change regardless of the results of political referendums. There will always be a mix of stability and instability - which means if you are an inventor or a manager you simply need to look for and seize the opportunities presented. You may consider the result of the referendum to be good or bad depending on your political views but either way the opportunities for invention will be great.

All this means, that in terms of the referendum, we are where we are. We simply need to continue moving forward with our heads held high. To quote Isaac Asimov: