You Can’t Take This to the Bank
Yesterday’s post introduced the Brazil Nut Effect – one of the high growth factors in the rainforest. In the discussion of the types of relationships observed in that story, I’ll start with the lowest kind of relationship; one you would seek to eradicate rather than to foster. Just as pests and pathogens are part of life in the rainforest, so are parasites; and they will eat both your lunch and your dinner if you’re not watchful. Parasitic relationships benefit one party and damage the other.
Business examples would include credit-lending agencies that mislead and gouge consumers with outlandish interest rates. This brings to mind the strangler fig in the rainforest, which is a dramatic example of a parasitic relationship. The fig starts as a small plant growing on a large tree. It can appear harmless – but if allowed to grow unchecked- it will completely take over and kill the host tree. There’s a lot of lessons here, including “pay attention to the small things; they can become big things while you’re not looking”.
The next type of relationship is called Opportunistic and as the name implies, is more a matter of chance than design. A few years ago, a relative who works for a medical doctor overheard a conversation about a company going public on the New York Stock Exchange that was likely to experience high growth because of the medical breakthrough it represented. My broker scoffed at my interest in making a small investment, however, I felt it was worthwhile and we invested a small amount. As things developed over the next three years, the stock did amazingly well (to my broker’s shock and amazement). That investment is an example of an opportunistic situation and is not a situation that I will seek or is likely to repeat itself. Helpful happnestance is not something you can plan on and set goals to achieve.
Next post will address the 2 kinds of strategic relationships that you can bank on.