One of my favorite economics phrases (let’s face it there aren’t many) is ‘animal spirits’. First used by John Maynard Keynes, ‘animal spirits’ refers to the red-blooded, naive optimism that raises the pulse of entrepreneurial business leaders and leaves them feeling invincible; masters (and mistresses) of their universe. It’s the devil on their shoulder that tells them the time’s right to take a risk, roll the dice, disrupt, create, destroy, WIN!
Animal spirits is arguably one of the most important foundations of our economic system in the West. Successful risk taking, often in the teeth of wise council and received wisdom built this country and won the cold war. It’s brutal, tough, merciless and unfair, or at least it drives people to behave that way. It’s what Churchill had in mind when he said of capitalism “It is the worst system, except for all the others”.
Sadly, as we’re currently discovering, ‘animal spirits’ can’t be ordered prix fixe. Even the US government cannot buy or beg market confidence. To borrow another Keynes quote, “It’s like pushing on a string”.
But perhaps, just maybe, the beast is rousing itself from slumber. Steve Jobs was certainly in rousing form on January 27th announcing the launch of the new iPad. Whatever your view of the device, Jobs himself always commands center-stage, enraging and delighting pundits and public in equal measure. Some complain that he’s “arrogant”, that he doesn’t take enough notice of customers, that Apple is a monster. Others praise the elegance, style and utility of Apple’s product line, they rave about Jobs’s delight in disrupting, destroying or saving whole industries with a click of his (mono-button) mouse.
Whatever you think of him it’s impossible to dismiss his revolutionary success. People will be talking about Steve Jobs in 100 years as a pioneer, a leader, a visionary. That’s what I’m talking about. That’s animal spirits.
But Steve Jobs is just the poster child. There are many, many others. The smaller the company the more entrepreneurial the boss and the more animal spirits he or she must display to grow, to compete, to win. These leaders will be critical to the next period of growth in the US. Titans will rise. New names will enter the lexicon.
Animal Spirits 2.0
But this recovery will be a little different. Hard-charging CEOs face a new business reality. To whit an empowered consumer with limitless information at her fingertips and the motivation to use it. A consumer with opinions – not just about product quality and price, but about customer service and corporate behavior too.
Companies that want to successfully engage and sell to that consumer better have their ducks in a row. They better embrace truth and transparency, respond quickly to error and upset; invite, listen to and act on that customer’s thoughts and ideas. Because she’s wired. She’s got attitude. For companies who want to stand up and be counted in 2010, there’s no more faking it and no hiding place. The eyes of millions are just a click away.
So this time animal spirits might not be enough. To succeed companies will need find a way to balance yin and yang. By which I mean on the one hand they need to be red-blooded, aggressive, innovative. On the other hand they must respect and embrace the customer, listen closely to her, understand her context and worldview, and ensure her needs are catered for, efficiently, with a smile.
Both elements are critical. I think too many pundits are trying to tilt companies out of balance – too much towards the service part of the paradigm. But that way points to mediocrity. If all companies only listened to customers and acted on what they said, ipso facto they’d all end up exactly the same.
The companies that stand apart, the ones that are truly DIFFERENT are the ones that are in balance. They stand for something. They’re red-blooded, innovative and mission-driven AND they care deeply about their customers and great customer experience. It’ll be an interesting recovery.