As early as 1968 the prominent professor in marketing, Theodore Levitt, claimed that “business always looses”. His foundation for the claim was that business managers and companies make great effort to postpone, minimize and avoid regulations. Instead they should embrace regulations as a source of insight for what future business models should look like (“Why business always looses”, Harvard Business Review, 1968). I have myself repeatedly made the same claim, and also proven it with both theoretical analysis as well as with empirical evidence.
Examples of flagrant and recent practices where efforts have been put in the wrong place have been reported from the automotive industry, where new technology has been used to avoid regulations rather than to advance real innovation. Also, in the Nordic financial services industry newspapers are filled with reports of flagrant failures to manage regulatory requirements.Instead of nurturing the new generation of technology, focus has been on inventing solutions to avoid the regulatory hurdles. Historic cases include opposition to regulations introduced to abolish child labor. With this in mind it is ndblowing to notice that in a recent report from PWC, showing the views of (so called) “leaders”, regulations are listed on top of factors that are threats to business. My recommendation to the respondents in this survey is clear. Change the way you look at regulations, and your organisations and employees will follow, and actually find something new about what ustomers and markets demand in terms of future service. To return to Professor Levitt: he asks business to embrace regulations and thereby avoiding to become “the perpetual ogre, the bad guy who is against good things” (Levitt, 1968).
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