I am going to paste this post from Umair Haque below. It’s just about full length, but it’s important to get the ideas out there:

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Today’s corporate picture looks darker and bleaker than ever. And especially among those of us in our 20s and 30s, the feeling that business as usual cannot go on is growing.

But is that just youthful naivete? Does business as usual ever really change?

Recessions breed cynics like wars breed profiteers. So let’s step back for a second and examine, as the macro crisis deepens, just how intense the global challenges confronting tomorrow’s business leaders are.

Here are four of the most critical.

A crippled global financial system. The macro crisis is the reflection of a global financial system that wasn’t built to last. It’s riddled with moral hazard and adverse selection because incentives are myopic, information is poor, ethics are totally absent, valuation is a black art, models are divorced from reality - and that’s just the tip of the iceberg. The bigger problem is this: markets are freest for those who have the means to move them, through games of capital structuring, information arbitrage, and collusion. But those games dilute the purpose of a corporation: to create authentic economic value.

Endemic underinvestment in innovation. The developed world faces a serious problem. It’s not just that developing countries are churning out doctors, lawyers, engineers, and PhDs. Rather, it’s that innovation itself in developed countries is under threat. In the US, it’s been subverted by politics. The incentive for innovation is dulled significantly when the government hides problems that need solving - or when it fails to invest in the infrastructure that innovation needs to thrive, like affordable education or federally sponsored R&D.

Accelerating disequilibrium. So much for market efficiency - or semi-efficiency…or even semi-semi-efficiency. Let’s chart the hypervolatility of the last decade: the internet bubble, currency and debt bubbles, crashes across Latin America, Russia, and the Asia-Pacific, global oil and food bubbles, credit and housing bubbles and crashes globally - and that’s not even an exhaustive list.: volatility isn’t just noise in the signal: it is the signal.

In a world where disequilibrium itself is the new normal, building sustainable lives and careers - let alone companies - isn’t just tough: it’s uncharted territory. Yesterday’s foundational axioms and theorems offer us little guidance. For example, in its most trivial form, the Modigliani Miller theorem  justifies leverage to the hilt - but that, as many boardrooms are discovering the hard way, can be fatal in a disequilibrium world.

Shallow strategy. Strategy is often “shallow” in the sense that the value it teaches companies to create rarely lasts, is easily broken, and is almost absurdly inauthentic. How much value is really created when Primark, Dell, or Disney earn shareholders a return - by implicitly or explicitly exploiting sweatshop labour? From an economic point of view, the “supernormal” profits that strategy teaches us to earn today are often simply offset by foregone opportunities - for everyone - tomorrow. “Strategy”, it seems, isn’t often that strategic. If anything, it’s leading more and more boardrooms directly into meltdown. Just ask any of the companies above - or better yet, ask yesterday’s grandmaster of “strategy”: Microsoft.

These challenges are as tough as they are deep. I could spend hours adding to this list - but the point is this:

Yes, business really does change. 400 years ago, corporations were formed by royal decree. 300 years ago, many countries were powered by slave labour, or its closest moral equivalent. 200 years ago, debtors didn’t go bankrupt, they went to prison. 100 years ago - well, business is largely the same as it was a century ago.

And that’s exactly the problem. Business hasn’t changed, but today’s array of tectonic global shocks demands a different, radically better kind of business. Yesterday’s corporations visibly cannot meet today’s economic challenges.

How do we answer them? New DNA

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