The Journal of 2020 Foresight

Reports from the Knowledge Labs about our recent findings, research topics, and interviews with lifestyle leaders who are creating their own futures.

How to stimulate your own powers of foresight. Consider the following thought provokers. Ask yourself, in these categories what are the brand new trends and forces? Which are the ones growing in importance? Which current forces are loosing their steam? Which have peaked or are reversing themselves? Which are the "wildcards" about to disrupt us in the future? POLITICAL AND TECHNICAL thought for food: Electronics, Materials, Energy, Fossil, Nuclear, Alternative, Other, Manufacturing (techniques), Agriculture, Machinery and Equipment, Distribution, Transportation (Urban, Mass, Personal, Surface, Sea, Subsurface, Space), Communication (Printed, Spoken, Interactive, Media), Computers (Information, Knowledge, Storage & Retrieval, Design, Network Resources), Post-Cold War, Third World, Conflict (Local, Regional, Global), Arms Limitation, Undeclared Wars, Terrorism, Nuclear Proliferation, Weapons of Mass Destruction, Governments (More/Less Power and Larger or Smaller Scale), Taxes, Isms: Nationalism, Regionalism, Protectionism, Populism, Cartels, Multinational Corporations, Balance of Trade, Third Party Payments, Regulations (OSHA, etc.) Environmental Impact, U.S. Prestige Abroad. SOCIAL AND ECONOMIC Food for thought: Labor Movements, Unemployment / Employment Cycles, Recession, Employment Patterns, Work Hours / Schedules, Fringe Benefits, Management Approaches, Accounting Policies, Productivity, Energy Costs, Balance of Payments, Inflation, Taxes, Rates of Real Growth, Distribution of Wealth, Capital Availability and Costs, Reliability of Forecasts, Raw Materials, Availability and Costs, Global versus National Economy, Market versus Planned Economies, Generations: Y, X, Boomers, Elderly, Urban vs. Rural Lifestyles, Affluent vs. Poor, Neighborhoods and Communities, Planned or Organic Growth. Got Knowledge?

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Monday, November 17, 2003

350 Years of Trading: Missouri River Sources to San Francisco Bay

Chapter Three: The Outpost

By Steve Howard, CKO
The Knowledge Labs

Table of Contents
Chapter One: Basecamp
Chapter Two: The Ridge
Chapter Three: The Outpost
Chapter Four: The Tribal Territories

“Native Americans this far up the river had never seen a black man before and York created a sensation. Dubbed Big Medicine by the Indians due to his uniqueness and believed spiritual power, this undoubtedly was a happy time for York. On this journey he had become an equal in many ways to his fellow explorers. He contributed to the success through his labors and talents and was respected for it. There was certainly an affection between the white men and this black man. To this was added the awe with which he was treated by Indians. In their eyes, he was superior to the men with white skins.”

James J. Holmberg

J2020F: We can see the flat farmland region of the state’s capital, Sacramento, as we approach the runway. We claim our baggage and scurry through the airport. Then we throw our luggage into a rented Suburban and take US 50 east. Where are we going? And, what’s this got to do with the Hudson’s Bay Company, Royal Dutch / Shell, and The Mother Lode?

Explorer: Let’s take your first question, well, first. If we thought Grey Owl had set up an Outpost in an innovation or emerging growth community, then we’d be heading to the towns we mentioned before.

Eagle: I don’t know why, but my hunch is he’s probably staying in a resort community at a more mature lifecycle – either mid- or late-growth. We’ll know more when we get outside of the capital and check our e-mail at a Starbucks with a T-Mobile wireless connection.

J2020F: What if it is mid-growth? Where would we be headed?

Explorer: Well according to what the California learning expedition contributed to the knowledge bank it could be any of the towns in the following regions: Sonoma (Wine Country), Mendocino (Northern California Coast), or Morro Bay (Central Coast).

J2020F: And, what about late maturity destinations?

Eagle: Then Grey Owl is more likely to be found in Del Mar (Southern Platinum Coast), St. Helena (Wine Country), Calistoga (Wine Country), or Lake Tahoe (Mother Lode / Comstock Lode).

J2020F: How long before we figure out our destination?

Explorer: About as long as it takes to finish our story.

Eagle: Let’s recap.

J2020F: Thomas Jefferson didn’t want the English to gain control over the lucrative western fur trade, especially after reading Alexander Mackenzie’s exploits. Europeans by sea and up the coast from Mexico, as well as, Scots and Canadians from the north, and American explorers and settlers from the east converged on the indigenous people in what today is coast of California, Washington and Oregon. And, roughly 100,000 Native Americans early inhabitants were nearly obliterated by European diseases, colonization, settlers and prospectors.

Eagle: Good summary. We’ll weave Hudson’s Bay Company, Royal Dutch / Shell, and The Mother Lode into our story to illustrate both the lifespan of a corporation, as well as, how the lifespan of towns, communities, and regions mirrors the chief means of providing economic value.

Explorer: We’ve already mentioned Arie De Geus, the author of “The Living Company: Habits for Survival in a Turbulent Business Environment.”

J2020F: Didn’t he discover that the average lifespan of a corporation is about four or five decades?

Explorer: That’s right. And, these are the companies that somehow survived the infant mortality rate that eliminates 40% of all companies in less than 10 years from their birth.

J2020F: So in terms of individual life spans, while we humans have learned to adapt and live for 75 years or more on average, there are only a few companies that are that old and flourishing. No wonder fewer and fewer workers will retire with a pension as a result of working at one company for their entire career.

Eagle: It’s as if the majority of large corporations suffer from learning disabilities – they somehow fail to adapt and evolve as the world around them changes.

J2020F: So most commercial corporations are dramatic failures – or at best, underachievers? How did De Geus come up with these conclusions and what about the Hudson’s Bay Company?

Explorer: Patience. During an industry crisis Royal Dutch/ Shell launched a research study to find out what other companies were doing with their business portfolios, so that a new diversification strategy could be launched, and more importantly, maintained.

J2020F: All they’d have to do is to look to the high fliers in Silicon Valley, right?

Eagle: Not exactly. Since the history of the Shell Group dates back to the 1890s, the executive sponsoring the strategic research only wanted data on companies older than Shell – those that had weathered some fundamental change in the world around them – “such that they still existed today with their corporate identity intact.”

Explorer: After much digging, the research group eliminated those that stood the test of time, but existed in name only – a brand, an office building or were a shell of their former selves – mere remnants of a glorious past.

J2020F: That doesn’t leave too many, right?

Eagle: De Geus says that criteria narrowed the field to 30 companies. Of the remaining 30 companies, 27 became candidates for more in-depth case study analysis.

J2020F: Give us some names.

Explorer: Well, worldwide the list included Anglo American Corporation, Booker McConnell, British American Tobacco, Daimaru, East India Company, Anthony Gibbs, Kennecott, Kounoike, Mitsubishi, Mitsui, Pilkington, Rolls Royce, Rubber Culture, SKF, Siemens, Society Generale, Suez Canal Company, Sumitomo, Suzuki, Unilever, and Vestey.

Eagle: In North America, there were 3M, IBM, with DuPont, W.R. Grace, Kodak and one more.

J2020F: Let me guess, the Hudson’s Bay Company? But, what is the significance of all this to our story?

Explorer: According to De Geus, when Royal Dutch / Shell analyzed the 27 case studies for common, key strategic success factors, the researchers discovered that long-lived companies were sensitive to their environment.

J2020F: What?

Eagle: He means whether they had built their fortunes on knowledge (such as Dupont’s technological innovations) or on natural resources (such as the Hudson’s Bay Company’s access to the furs of the Canadian and North Western US forests), they remained in harmony with the world around them, according to De Geus.

Explorer: Think about it for a moment. De Geus writes, “As wars, depressions, technologies, and political changes surged and ebbed around them,they always seemed to excel at keeping their feelers out, tuned to whatever was going on around them.”

J2020F: OK. And that’s important because?

Eagle: De Geus says, “They did this, it seemed, despite the fact that in the past there were little data available, let alone the communications facilities to give them a global view of the business environment. They sometimes had to rely for information on packets carried over vast distances by portage and ship.”

Explorer: Look. The Hudson’s Bay Company, one of the oldest, still active companies in the world, was almost 200 years old when Canada was created in 1867, roughly 20 years after the California Gold Rush.

J2020F: So, they’ve been able to remain in business over roughly three and a half centuries?

Eagle: That’s right. They are so intertwined with Canadian history that since its inception in 1670, the Company controlled fully one-third of present-day Canadian territory.

Explorer: To give you an idea, that area, designated Rupert's Land, encompassed most of Northern Ontario and Northern Québec, all of Manitoba, most of Saskatchewan, the southern half of Alberta and a large part of the Northwest Territories.

J2020F: How did they get all of that control?

Explorer: It was granted by Royal Charter following the successful voyage of the Nonsuch to trade for beaver pelts with the Cree near James Bay.

J2020F: So they began with beaver pelts?

Eagle: Right. What began as a simple fur-trading enterprise evolved into a trading and exploration company that reached to the west coast of Canada and the United States, south to Oregon, north to the Arctic and east to Ungava Bay, with agents in Chile, Hawaii, California, and Siberia; a land development company with vast holdings in the prairie provinces; a merchandising, natural resources and real estate development company and, today, Canada's oldest corporation and one of its largest retailers.

J2020F: How did they navigate the technology, economic, political, and social transformations over their 330 years?

Eagle: It was not an uneventful progression. First, the French wanted the Company out. During its first decades, French and English warships battled for possession of Company trading posts.

Explorer: Don’t forget our friend, Mackenzie.

J2020F: So, the plot thickens?

Explorer: I’ll say. Powerful rivals emerged. The North West Company, principally Scottish-Canadian traders from Montréal, was the most formidable. The “Nor'Westers,” particularly under Alexander Mackenzie, and in defiance of the Royal Charter pushed north to the Arctic and in 1793, west to the Pacific.

Eagle: Today, most Canadians view Sir Alexander Mackenzie as a Scot who grew to become a Canadian hero, even though he failed his first time out.

J2020F: Why do you say that?

Eagle: A fur trader and explorer, Mackenzie became convinced that Cook's River, in present-day Alaska, could provide a water route from the Atlantic Ocean to the Pacific. Such a route — the mythical Northwest Passage — would provide a gateway to the vast trading markets of the Orient.

J2020F: But?

Eagle: Over 100 days later, however, Mackenzie's entourage arrived back at the fort with details of another route to the Arctic Ocean, not the elusive Pacific.

Explorer: Though this first trip aided in mapping the northern regions of the continent, Mackenzie remained determined to find the "Western Sea."

J2020F: What happened then?

Explorer: On May 9, 1793, Mackenzie, with nine others, packed into a 25-foot canoe at Fort Fork along the Peace River for a second voyage. This time, he succeeded, and announced his arrival on a rock at Bella Coola near the Pacific by painting the following words with a vermilion and grease mixture:
"Alexander Mackenzie, from Canada, by land, the twenty-second of July, one thousand seven hundred and ninety-three."

J2020F: But, what’s all this got to do with the Hudson’s Bay Company?

Eagle: In 1821 the North West Company merged into the Hudson’s Bay Company and all parties recognized the Company’s title to the land.

J2020F: And, the significance to California?

Explorer: For the next half century or so Company officers explored and traded vigorously throughout the west and north and pushed south in a wide area from the sources of the Missouri River to San Francisco Bay.

J2020F: And the significance for the lifespan of a region?

Eagle: Throughout history we can identify five economic offerings – commodities, goods, and services – the last two -- experiences, and transformations gaining strength today and tomorrow.

Explorer: We’ll go into each in more detail later on, since each offering yields five very distinct possibilities, with tremendous ramifications for business, employees, and customers.

J2020F: What's next, then?

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