It’s funny when you read different things but they all seem to be connected in some way. That’s happening to me right now and this blog post is my attempt to put some of those ideas in order.
I’m reading a book called Strategic Risk Taking (by Aswath Damodaran), which is a book about risk taking in business and the markets; I’m reading a book called Sex on the Moon (by Ben Mezrich) which is a mostly-non-fiction account of a guy who stole lunar moon rocks; the latest issue of National Geographic arrived at our house the other day and it includes an article about Mars exploration; and then a friend posted on Facebook the other day about the Golden Record, a message from earth to aliens that was sent out on the Voyager spacecraft; I’ve also been reading a bit about the applications for a one-way pioneering trip to Mars.
All of those readings ended up being connected (at least in my mind) and related to humanity’s desire to push beyond the boundaries we’ve set for ourselves — to accept the costs and the risks associated with the unknown and to pursue expansion.
I was particularly struck by the Mars exploration missions themselves. Starting back in 1960, humans have been reaching for Mars. In those early years, and in spite of staggeringly high costs, most of the missions failed. Here’s a helpful list on Wikipedia of Mars missions that have succeeded, partially succeeded, and failed. (You’ll note that this list combines all international attempts so when I say “we” in this blog post, I’m referring to humanity in general).
You’ll see when you look at the chart that we started making attempts in 1960 but the first 6 attempts in the first 4 years failed. On the 7th try, we had something called success but the multi-million-dollar mission was considered a success even though it only sent back 21 photos of Mars.
It wasn’t until 1969 that we started to achieve success beyond a couple of photos and even those missions weren’t anything other than flybys; it wasn’t until 1971 that we had our first orbital mission success; it wasn’t until 1976 that we actually got a lander to touch down on Mars and start sending information back. (There were a couple of sketchy lander attempts earlier that didn’t send back data).
Even after this first successful attempt, there have been many other attempts with mixed results — success, partial success, and failure — pretty consistently over the years; beginning in 2000, we started achieving more regular success; today the thought of sending a team to Mars (at least one-way) seems more and more likely, with initiatives like Mars One hoping to achieve it within a decade.
When you read my timeline synopsis above, you notice some interesting things: We started exploring Mars in 1960 and spent (collectively) billions of dollars to do it, facing failure after failure until the first hint of success coming in 1964 and the first real success coming in 1969 — a full nine years after those first failed attempts. And results continued to be mixed right up through the 1990’s. Now, our successes are more frequent but they are still short-lived, costly, and the track record isn’t perfect.
But we’re doing it anyway. We’re pushing forward anyway. In spite of the costs and the risk, we explore with an eye on knowledge and an eye on expansion. This isn’t any different from when Columbus (and his peers) pushed forward and sailed into the unknown seas in spite of dire warnings like “There Be Dragons”.
Okay, you’ve patiently read through 550+ words about exploration. So what does this have to do with business?
At the risk of getting a little philosophical, businesses have a similar need to push forward. They explore and expand in an attempt to grow. Although most business’ purposes are profit-driven (as opposed to humanity’s quest for knowledge and bragging rights), the outcome is the same: Businesses have an inherent need to grow beyond themselves. So we shouldn’t be surprised when we read in The Economist that mergers and acquisitions are picking up.
And then I read this article that ponders Why we keep coming back for mergers even though they don’t work. The article was interesting because it really did highlight the constant, costly failures that businesses have experienced in their merger attempts. But businesses keep doing it anyway. Why?
I think the answer lies in our discussion above about Mars exploration. We do it anyways because we need to. The costs and risks are high and the rewards are often mixed even when there is success, but businesses need to grow beyond themselves.
Unfortunately, the options businesses have to grow are limited: They could start something (i.e. on a small scale, like an innovative product, or on a larger scale, like starting a new brand or business) or they could buy something that is already running. The possibility of crash landing is always there but businesses do it anyway because they hope to get to the point when they learn how to do it right. It’s easy to point to mergers as being frequent failures because they are more public and we don’t always see the many failures in a company’s skunkworks.
We often praise Edison for his perseverance while building an (anecdotal) 10,000 failed attempts at a light bulb but we readily criticize a business that tries to merge and fails.
Businesses need to grow, and mergers and acquisitions are an option (even though they are rife with failure). But we need to do it anyway for the very same reasons that humans are exploring Mars. The costs and risks are high and success is elusive… but we get better each time. And maybe — just maybe — a business will find the formula it needs to make it work.
(Image courtesy of NASA/JPL-Caltech)