From the Archives...
The Transition Economy
[Matt Taylor Journal page 305, July 21, 1982, 5:39am]
An extract from an article prepared for the Independent Bankers Association
In the next 25 years we will see as much social, economic, political
and technological change as has occurred since the Middle Ages.
This change will be global; it will alter the way that business is done
in every sector of the economy. It will totally alter the economy itself.
The inability of major institutions to foresee and plan for this change
has created a crisis of unprecedented proportions. In the period starting
now, from 1982 to 1987, we will see a complete disruption of
the global economic system. This will be a turbulent time. After
1987, a new economic order will start to emerge--one based on a set of
assumptions essentially different than all economic
systems in the known history of humankind.
The nature of this economic shift is now clear--if you know where to
look; it is no mystery. It will not be bad--if organizations
do not [employ] their human and financial resources in a historically
futile attempt to maintain old ways based on conditions that no longer
exist. However, this change will be so vast in scope and occur so quickly,
that those individuals and institutions that resist will be unmercifully
There is no way to defend against this kind of change. There
are great opportunities to move with it and shape it. The result
of this period will be economic wealth that even two decades ago would
have seemed a fantasy.
At the forefront of this change is what is now called the "Information
Economy." Developments in computers and robots already tested
in laboratories will forever alter the very nature of production,
distribution and consumption, and more importantly, alter our
concept of what wealth and money is. Information will become
money and wealth. This is not just change, no matter how great; it is
a change in kind--a social transformation.
The major risk of this period lies in how we'll manage the transition
from one historical period to another. If you think of all that has occurred
since the Renaissance compressed into one generation you can
sense the magnitude of the situation. Can this change be stopped? No,
the drivers of this change are already "out of the bag" and
are being employed to deal with the change that has already taken place.
The risk lies in misinterpreting negative economic signs only from the
vantage point of the existing economy and thus taking actions
that will accelerate confusion and "decline." This is what we
have been doing for several years. We have unfortunately eaten up much
of our margin. The solution lies in defining this "new" economy
and in developing a practical strategy for surviving the transition period.
Fortunately the knowledge and tools exist to do this. What has
not existed until now is the method to bring these resources together
and create a functional synthesis; and the political opportunity
has not existed to create the new legal structures required.
No one person, no one organization or profession has the answers to what
this "new" economy will look like, let alone the experience
to engineer practical solutions. Neither does Taylor Associates, although
we do have one of the broadest views. What the principles at Taylor Associates
have invented is a method of bringing the pieces together in
a way that creates action plans that can be accomplished and
corrected over time.
We at Taylor Associates saw this crisis over 20 years ago and have invested
years of research into creating Management Centers which have been designed
to facilitate the decision, design and management process in an entirely
new way. A way consistent with the rate of change that is swamping
all conventional planning and management methods. This new method allows
us to bring together experts from many diverse fields--often those who
see themselves "competitors" and "enemies" and create
a new model from their various perspectives--in other words form a new
whole from many expert parts. Then they design a program that can be tested
and corrected as it is applied. This method allows individuals and
organizations to evolve their thinking and work at the rate that circumstances
are changing in their environment. What has been happening over the
last 20 years and the last 5 in particular is that the disparity between
how fast organizations can change and the rate of general change, has
been growing. This is the problem; we have misinterpreted
this by looking at a series of individual problems unrelated
to the whole system and have "logically" taken reasonable actions
that have led to greater problems. Band-Aid, reactive management.
Management Centers are the result of over 20 years of active research
into planning and management; they are the synthesis of the "state
of the art" from many fields: humanities, science, engineering, business,
etc. Over the last 3 years, these methods have been tested and refined
with a number of issues and clients--Management Centers now exist
as a mature working system.
It is clear that if change of even a fraction of the amount described
in this paper occurs, the Banking Industry as we know it will collapse.
We have discovered, however, in our research that several reasonable,
viable alternatives exist. The Banking industry is the life blood of our
economic system--it will be on the forefront of this change; it will not
follow it as has been possible traditionally. How well banking does in
the next decade will be the measure of how well we have managed
the biggest social transition in our history.
Our proposal to the Independent Bankers Association is that the special
capacities of Management Centers (that have never existed before) be used
to develop a program that can solve the dilemma that now exists in Banking.
To do this, all of the expertise and resources from every
major field of knowledge and work will be pulled together to jointly design
a program. The results of this process will be:
- A new model of what is happening
- A strategy to deal with it
- A training program for member banks that is adaptable to their
- A specific legislation program to establish a new banking structure
- An implementation strategy and an "update method" for staying
This program will be available to the Colorado members within 6 months
and can be "sold" to the National organization to recover costs
and to amplify the effects.
If confrontational methods are employed to solve these questions, several
years and many times more money will be spent in arriving at solutions--the
costs and risks incurred in the meantime will be tremendous.
There are new conditions before us.
There are new methods for meeting the challenge.
The results will be new and will open the door to a new era of opportunities.
copyright © 1982, MG Taylor Corporation.
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