Deciphering The Current Economic Situation

I just read a FANTASTIC article in The McKinsey Quarterly called Creative Destruction And The Financial Crisis: An Interview With Richard Foster. It clearly explains our current economic environment.

Foster, who was a McKinsey director for 22 years, does a wonderful job of describing how capitalism creates cycles that lead to economic downturns like we’re in now. It’s not only very informative, but it’s also an easy read — which is a major feat for any discussion about economics. Here’s an excerpt:

The new entrepreneur often seeks ways to innovate outside the scope of the newly established regulations. In the beginning, all that works out fine. We have innovations… the returns are strong… The opportunity starts drawing less savory figures-charlatans who overmarket, cut corners, establish usurious contracts, and do other clever things to generate profit for themselves. They end up bringing the system down.

The bottom line: If you’re interested in understanding economic cycles, then you must read this article.

About Bruce Temkin
I am a customer experience transformist, helping large organizations improve business results by changing how they deal with customers. As part of this focus, I examine strategy, marketing, interaction design, customer service, and leadership practices. I am also a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Simply put, I am passionate about spotting emerging best practices and helping companies master them. And, as many people know, I love to speak about these topics in almost any forum. My “title” is Managing Partner of the Temkin Group, a customer experience research and consulting firm that helps organizations become more customer-centric. Our goal is simple: accelerate the path to delighting customers. I am also the co-founder and chair of the Customer Experience Professionals Association (CXPA.org), a non-profit organization dedicated to the success of CX professionals.

2 Responses to Deciphering The Current Economic Situation

  1. Pingback: get donkey! » Blog Archive » How we got here

  2. Andy Green says:

    Foster’s points are well argued. But…. some of his ideas about the benefits of creative destruction were more popular pre-Great Depression. See for example the “Liquidationists”: http://eh.net/encyclopedia/article/parker.depression. Unfortunately, the destruction part can be so severe as to shake investor confidence and consumer expectations.

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