welcome to another episode of the Thursday Thought. I tried to do this with AI and people kept saying it's not the same as reading it out. So here is the latest episode. It's called fueling today with tomorrow. eating the seed potato or planting the seed snake. As always, it starts with a couple of quotes. The first is by Nassim Nicholas Taleb. Do not mortgage your future for small gains now.
The second is Mark W. Johnson, who was a previous guest on the Innovation Show, who told us, Business leaders are being motivated and rewarded to heat their houses by burning their furniture. In our pursuit of immediate comfort or short term gains, we often sacrifice the foundations of future success. This principle is captured in countless cautionary stories. In this week's Thursday Thought, we explore the Irish potato famine, corporate strategy, and the unexpected world of collectible snakes.
To build a sustainable future, we must resist the urge to mortgage it for fleeting rewards. As the old saying goes, we do not inherit the earth from our ancestors, but we borrow it from our children. Similarly, Our future isn't something we passively receive, it's something we shape with the choices we make today. The Irish Famine. Eating the seed corn. During the Great Irish Famine, desperation led farmers to consume their seed potatoes, the very resource needed to secure future harvests.
Fishermen sold their nets, artisans sold their tools. Sacrificing not just physical assets, but the means of their future livelihoods. This poignant image of short-term survival at the expense of long-term resilience serves as a powerful metaphor for organizational decision making in the corporate world. This dynamic plays out when businesses and companies sell valuable assets or slash critical investments in research and development and innovation to sustain short term valuation.
Consider Sears, a retail pioneer that under financial pressure sold off its highly profitable financial arms, including discover card and all state insurance. These divestments provided immediate capital but stripped Sears of lucrative assets that could have supported its survival during the retail industry's famine. By eating its seed potato, Sears left itself with little to plant for the future.
Efficiency driven strategies are seductive because they deliver quick results and a sense of control. Yet, these strategies often resemble mining soil without replenishing it. Companies that prioritize cost cutting and share buybacksover innovation may y temporarily appease shareholders, but they risk sacrificing their ability to adapt and to grow. The story of Heinz under CEO Tony O'Reilly is a cautionary tale.
To boost earnings, O'Reilly slashed R& D and marketing budgets, undermining the company's long term competitiveness. Bill Johnson, O'Reilly's successor, later admitted, We weren't supporting our brands, and we weren't being innovative at all. In terms of cost cutting, the mistake for the industry, in retrospect, is that it did not take the cost out of the system, it took the cost out of the product.
Like farmers consuming their seed potato, Heinz prioritized immediate gains over future resilience, leaving it vulnerable to shifting market demands. Planting the seed potato. Phillips strategic reinvestment. Phillips serves as a master class in planting and replanting the seed potato for future success. We discussed Philips with friend of the show and my own personal friend and confidant, the prolific author Paul Nunes.
In 2006, while still profitable, Philips made the bold decision to phase out its incandescent lighting business, recognizing that LEDs would soon become more cost effective. Rather than eating the seed potato of its legacy business, Philips acquired smaller focused companies, cultivating this new field until division grew into 7 billion powerhouse. By 2016, Philips had spun off its lighting business into Philips Lighting, now Signify, freeing resources for its next strategic planting.
Impressive act of replanting, Philips pivoted to the healthcare industry focusing on diagnosis and treatment equipment. careful planning and a balanced portfolio strategy, Philips invested heavily this fertile ground. 2017, most of the company's revenue came from high end medical equipment Cementing its place as a leader in the healthcare sector.
This transformation was not an overnight miracle, but the result of strategic foresight and the courage to reallocate resources from legacy crops to future harvests. Planting the seed snake. On this week's innovation show, Our keynote speaker at the forthcoming Reinvention Summit on the 29th and 30th of April 2025, Seth Godin shared the story of Justin Kobilka. Justin is a pioneer in the snake breeding industry.
Once a small scale operation where Python sold for about 20 bucks, the market transformed thanks to the internet, which expanded access to Justin's key differentiator was his early investment in his facilities and the genetic quality of his pythons. Many times he might have sold off his prized python for a healthy reward and many times he resisted. Instead of cashing out by selling his most valuable snakes for immediate gain, he retained them to breed even more extraordinary future generations.
The cost of strategy decay. In our forthcoming series with Gary Hamel, which will be released in the next few weeks, we discuss the concept of strategic decay. Strategies like assets have a finite lifespan. Over time, the competitive advantages that once fueled growth erode. Rivals replicate best practices. Market dynamics shift. And without reinvention, even the most successful organizations fall prey to strategy decay.
This decay is exasperated when companies rely on short term fixes to prop up performance, share buybacks, cost cutting, or selling off valuable assets. These actions create the illusion of health, but they mask future problems. These problems are often inherited by unassuming new leader who soon discovers the damage done by her predecessor. Organizations that thrive in the face of disruption are those that embrace innovation as an ongoing foundational practice.
This means fostering a culture of long term thinking, experimentation and creativity. It also requires the discipline to let go of what no longer serves the mission and the courage to invest in what does. The choice is to burn tomorrow's fuel for today's warmth, or invest in building a sustainable fire that will burn brightly for generations to come. Thanks for joining me once again on the Thursday Thought. I'd love your feedback. Is it worth me doing this?
I know many people don't have the time to read, and hopefully these short little bites can consolidate much of the learning I do through the Innovation Show, through the shows, through the reading, and indeed quotes I pick up along the way. See you soon.