I came across this memorable cinematic sequence in the 1949 Orson Welles’ classic, The Third Man. The Harry Lime character steps on the Viennese Ferris wheel and murmurs, “In Italy for 30 years under the Borgias they had warfare, terror, murder and bloodshed, but they produced Michelangelo, Leonardo Da Vinci and the Renaissance. In Switzerland they had brotherly love, 500 years of democracy and peace, and what did that produce? The cuckoo clock?”
With due reverence to my Swiss friends, I humbly acknowledge that the cuckoo clock is an understatement. The Swiss did take human precision to a whole new level—besides producing the best chocolates in the world, they also gifted us with Roger Federer, arguably the greatest player who wielded a tennis racquet. That said, I appreciate Harry Lime’s perspective. It does take dire, disruptive and almost chaotic circumstances that give rise to the most incredible innovations. As the saying goes, “Necessity is a wonderful mother!”
Bangladesh was ravaged by a widespread famine in 1974 shortly after their independence in 1971. 450,000 people died in the midst of rising crop prices and national chaos! Muhammad Yunus, an economist with a doctoral degree from Vanderbilt University was inspired in these circumstances to start a bank. He started by making a loan of US$27.00 to a group of 42 families to enable them to create small items for sale without the burdens of predatory lenders. Yunus firmly believed that his innovative idea would drive capital formation in the lowest strata of the population and help uplift the society and the nation. The Grameen Bank (“Bank of the Villages”) is the product of Yunus’ ideas that won him the Nobel Price and gave birth to the world of Micro Credit. By the end of 2008, Grameen Bank has disbursed $7.6 billion to the poor from 2100 branches and has dramatically revitalized the rural sector!
Stability is a necessary evil. While it promotes mental well being and quality in life, it makes the society and behavior very predictable and it makes the environment non threatening. A calm, predictable environment—devoid of any urgency to change anything—is not conducive to any form of innovation or large scale progress. Where innovation does not thrive, creativity gets thrown out of the window and you end up with brotherly love within a stagnating, non-innovative society!
I absolutely admire the turn of the Millennium… the threat of Y2K, the lure of the telecom de-regularization and the excitement and greed of the dot com boom. The perfect triumvirate, the perfect storm … the global surge of fear, uncertainty and innovation led to one of the fastest surge of the human race both from a positive and a negative perspective. Technology for that period between 1995 and 2000 is like the steam engine and railroads for the 1840s, automobiles and radio for the 1920s and transistor electronics for the 1950s. All these boom times were fueled by an almost cataclysmic, almost chaotic transformation in technology that dramatically disrupted and altered the political, social and economic status quo and consequently the fabric of the society!
Through 1999 and early 2000, the U.S. Federal Reserve increased interest rates six times to prevent the market from overheating. The dot-com bubble officially burst on Friday, March 10, 2000. The Stock Market Crash of 2000-2002 caused the loss of $5 trillion in the market value of companies from March 2000 to October 2002. Similar to the Borgias rule that spewed bloodshed and evil – the macro economic and financial chaos following 2001 led to shedding of a lot of red ink on corporate balance sheets. Greed and debauchery were the order of the day. Companies like Nortel Networks, who produced network equipment that powered the internet and the dot coms were permanently damaged by excesses in manufacturing, inventory and expenses. Organizations like Cisco, which outsourced their manufacturing units, were able to bail out relatively well with huge inventory write offs that dramatically pulled down their valuation! Nortel declared bankruptcy in early 2009. The dot com bloodshed wiped out big players like Global Crossing, JDS Uniphase and Covad Communications into the red ink of bankruptcy. Greed gobbled credible brands like WorldCom, who were found grappling with illegal accounting practices to inflate their annual profits. WorldCom’s stock went swiftly into a downward spiral as the news spread and they eventually filed the third largest bankruptcy in history of U.S. corporations. Many other executives were charged and convicted for misuse of shareholders’ investments. Citicorp and Merrill Lynch were blasted for providing the incorrect advisory.
However in the midst of all this chaos, mayhem and anarchy, a handful of organizations riding the dot-com bandwagon stood tall and took on a dominate position in the technology landscape, which they hold even today. They were like the Leonardo DaVinci, the Michel Angelo of the Borgias era. They are Amazon.com and eBay and Google! They were the poster children of sustainable and disruptive innovations. They epitomized business judgment and financial discipline and strong management that did not just ride a fad but was profitable, relevant and respected a decade later generating billions of dollars in revenue, tens of thousands of employees, global footprint and customers and train loads of shareholder wealth!
[The article has been contributed by Deb Dutta. He is a senior technology executive with over 20 years of experience in business and operations. Deb has a true passion for mentoring rising talent and is a frequent contributor and speaker at technology,business and educational forums. ]
[The article has been contributed by Deb Dutta. He is a senior technology executive with over 20 years of experience in business and operations. Deb has a true passion for mentoring rising talent and is a frequent contributor and speaker at technology,business and educational forums. ]
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