On culmination

From following the war in Ukraine, I've picked up some occasional military terms that I was not previously familiar with. In general, I am not a big fan of war strategy being applied to business. The reason for this is that I see a huge and obvious difference in terms of the scarcity of opportunities. In business, very rarely (if ever) will your business live or die from a single event, whether it is a big client pitch or securing a new investor. It might feel differently at the time, but really if you have something sustainable, you will be lining up lots of opportunities and it is more about how you perform cumulatively than in a single moment. War, although I don't have the personal experience to say for sure, doesn't share that dynamic. There are lots of situations where you have a single opportunity that may literally end up being life or death. That's all to say, I'm not a subscriber to business is war ideology.

That being said, however, the individual concept of culmination does seem very applicable to business. In war, this is the idea that an offensive can only be sustained for a limited amount of time before it pushes so far that the aggressor's supply lines are stretched to the point where it cannot keep up with the ever-expanding resource needs to hold the newly captured territory. Once that limit has been reached, the offensive can be said to have culminated, at which point there might be a pause to resupply or there might be an opening for the defender to make a counteroffensive. The similarity that strikes me with business, is the idea that as you expand, you have exponentially increasing maintenance that at some point, will force even the biggest company's growth to culminate.

We are seeing this now as lots of big tech companies who expanded off the back of Covid fueled growth are unable to sustain the massive investments they had made to keep up with that growth as the economy starts to pull back. It makes you realize that in really big companies, it takes massive growth in absolute terms to fuel incremental percentage increases but the investments required to support this growth are in many ways exponential - as you are dipping further into the talent pool (no longer with your pick of the best of the best) and making your organization bigger and more complex leading to more and more waste. At some point, this naturally culminates and leads to retrenchment from companies in the form of layoffs. I wonder though, what we might be able to learn from this effect - maybe organizations should stay smaller and leaner to avoid exponential increases in cost required to support growth? Or maybe some growth gains should be sacrificed in order to mitigate the risk of later layoffs? I'm not sure of the answer, but it's an interesting parallel to think about.