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How History Informs Business Strategy

While living in Washington, DC in the nineties, I was introduced to a book that hit me like a brick and provided clear context for everything that was happening in the world around me. That book was The Fourth Turning, by William Strauss and Neil Howe. It held that events which many times appear unrelated and disconnected are actually part of definitively linked cycles, seasons, or turnings. While this is certainly important from a historical standpoint, it’s also important from a business standpoint. As we operate in the midst of a pandemic and other global impacts, business leaders need to assess not only where they are, but also where they (and the world) are going and what will face them once they get there.

A Four Turnings Primer

In examining milestones, tides, and trends throughout our history, Strauss and Howe found strikingly common characteristics and patterns that have occurred sequentially and repeatedly. As the title of their book suggests, they identified four such repeating patterns – which they characterized as turnings – each lasting roughly 20-25 years. They illustrate the Four Turnings in a model they call the Saeculum – a historical term signifying a “length of time roughly equal to the potential lifetime of a person or, equivalently, of the complete renewal of a human population.”

THE FOUR TURNINGS

The High

Consider the 1950s. The government and those in authority were largely trusted. Invigorated by WW2 victory, society felt the power of a common purpose and could generally find consensus to address and solve big problems. This is in contrast to times when seemingly opposed ideologies persist and grind progress to a halt. Filled with optimism, the 1950s saw an incredible array of innovations in many fields. But as a new generation begins coming into form, fractures in The High are introduced and pressured.

Awakening

As the youth of the 1950s enter early adulthood in the 1960s, this group expressed a growing distrust of authority and the older generation. There was pushback on the expansion of structures the country had been operating under for decades and a relaxed attitude towards lifestyles. This manifested itself in large scale protests, rioting, concerns about the Vietnam War, and a Watergate scandal that confirmed the beliefs of many about corruption in the government.

The Unraveling

Here, we start to see people separate into often-clashing ideological siloes and an explosion of technology that makes the world feel closer together. In earlier periods, technology innovations included the radio and the growing presence of automobiles. More recently, we’ve seen the advent of the Internet and the power of social media. Economically, the country experienced a boom in the early 2000’s which quickly turned into a severe downturn in 2008 when bad lending practices and related factors caused derivatives to crumble. Similarly, the US saw the Wall Street Crash of 1929 send the nation into the Great Depression. Political polarity, economic booms with destructive underpinnings, and technological innovation – all contributed to pressures building towards crisis.

The Crisis

As the proverbial levees break, long-standing institutions are torn down and rebuilt from the ground up. Systems (e.g., educational, business, political, governmental) relied on for years become so dysfunctional that they can’t function the same way any longer. There is a perception that the very life of the nation is at stake. This determination to find a way through was evident in the GI Generation that put differences aside to focus on fighting common enemies and in those that endured and emerged from the Great Depression. In the words of Strauss and Howe, a “Fourth Turning can be long and difficult, brief but severe, or (perhaps) mild. But, like winter, it cannot be averted.”

A recurring theme throughout the turnings is a reluctant or lagging recognition that winter is coming – that the systems and norms that work today will not adequately function forever. Today’s advances in medicine, quantum computing, AI, and other areas will force change and the need for forward-thinking for society to fully reap their benefits in the years ahead. [Click here to tweet this powerful message.]

A Call to Action for Business Leaders

Our goal here is for business leaders to consider the context of the period in which their business is operating as they make decisions – decisions about what to next and where they want their business to go. A better understanding of this context will support better navigation towards the desired destination. In forthcoming content, we’ll take a closer look at tools business leaders can use to gain this contextual clarity and increase confidence in decision making – tools like PEST (political, economic, social, and technological) Analysis and corporate profile assessments.

In each Turning or season, there are business strategies which will succeed and others which will fail, depending on the dynamics of each Turning. It’s important that CEOs understand the success factors that will empower their companies in the current Turning, the Crisis, as well as the next Turning, the High. Capitalizing on this will require a reckoning of strategies, approaches, and ideas that could be holding us back.

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