I spent part of Sunday on a nature hike in Catalina State Park, outside Tucson. Like many visitors, I was in awe of the giant saguaro cacti that formed, in certain locations, a veritable cacti forest.
Our guide was extremely knowledgable about the flora and fauna of the Sonoran desert and regaled us with information about the saguaro. One interesting story emerged that is relevant to us beyond botany.
Beginning with the late 30s and early 40s, researchers started noticing that many saguaro had a bacterial infection and were dying. By the mid-60s the problem got bad enough that some were theorizing that the saguaro would be completely lost by the turn of the century.
Beginning in the 40s the war against bacteria was underway, with infected cacti being chopped down, sprayed with pesticides and so forth. Except those efforts were doing no good, nor could they.
You see, the root cause of the problem wasn’t the bacteria. The root cause was the freeze of 1937 that damaged the cacti. That damage enabled the bacterium to take hold and finish the job.
The problem with saguaro is that focusing on a 30 year window is short-term thinking. Saguaro can live for 150 years or more. It can take 50 to 75 years for one to start developing one of the side arms. Things that happened a long time ago–like a freeze–can impact the saguaro far into the future. More challenging is that if you don’t have a longitudinal view of the entire ecosystem–short term changes as well as longer cycle impacts, like droughts–you have trouble figuring out the root cause.
Sounds a lot like business, no? Think of businesses that focused on short-term profits (Enron) and ones that refused to acknowledge long term trends (Kodak). Sure, a little financial engineering wizardry worked for a number of quarters at Enron. And thinking that digital cameras were too expensive or the quality too poor, didn’t hurt Kodak for a long time.
But eventually it all caught up with Enron, Kodak and others–too quickly to do much about it. As I write, it appears as though Kodak has started the final death spiral.
So what did I learn from my hot walk in the desert? First, that as a businessperson you have to be aware of the entire ecosystem if you want to have a chance at recognizing the root cause of macro changes. Second, that one must consider a longer time horizon–both forward and backward–if we want to understand what actions to take.
Hard to do, but so necessary. The benefits of being well-fit to the environment and taking a long, patient view? A better chance of success.
Oh, and the saguaro? It’s doing fine for now. I’m pretty sure it will outlast us!