Jared Diamond’s brilliant Collapse: How Societies Choose to Fail or Succeed analyzes five ancient societies that imploded horribly, attempting to find insights useful for the modern, increasingly interconnected world.

Diamond identified five factors that lead to collapse. Always, the unsustainable overuse of environmental resources was one, and the society’s failure to appropriately respond to early symptoms was another. They were sometimes coupled with climate change, the loss of a critical trading partner, or the presence of hostile neighbors — singly or in combination.

Businesses being societies too, I thought it would be worthwhile trying to apply Diamond’s conclusions to the world of business (did you wonder how I was going to justify the tax write-off for this book?).

Unsustainable overuse of environmental resources

Easter Island was the home of a thriving society that relied heavily on its extensive forests. Diamond asks, “What did the Easter Islander who cut down the last palm tree say while he was doing it? Like modern loggers, did he shout ‘Jobs, not trees!’? Or: ‘Technology will solve our problems, never fear, we’ll find a substitute for wood’? Or: ‘We don’t have proof that there aren’t palm somewhere else on Easter, we need more research, your proposed ban on logging is premature and driven by fear-mongering’?”

Now that you’re either offended or delighted (depending on your political proclivities), take a step back and apply the question, not to global warming or depletion of the world’s oil supply, but to the company in which you work. In business, the unsustainable use of environmental resources can take several forms.

For forest products and mining companies it’s obvious, and part of the strategic plan (I hope!). It’s just as real for companies that build growth on information technology that’s inexpensive but can’t scale. When too many customers overload it, the company gets a bad reputation and its customer base collapses.

It also fits the U. S. steel industry, which collapsed in the 1970s from failing to maintain and modernize its factories.

Climate change

One reason the Norse colony on Greenland failed is that the Norse settled Greenland during an abnormally warm and hospitable period. They based their society on the expectation that it would continue. When it turned cold, they were over-extended for the new conditions.

How many businesses only work in a hospitable economic climate, and collapse when it cools?

Loss of a critical trading partner

Pitcairn and Henderson islands hosted thriving societies for centuries. They depended on trade with each other and another island, Mangareva. For complex reasons the trade stopped and both societies died, unable to sustain themselves without it.

I’m reminded of the advertising agency responsible for the original “Speedy Alka Seltzer” campaign. The agency lost the Alka Seltzer account and failed. I’ve known systems integrators that suffered similar fates.

Companies that have outsourced IT, which has a high switching cost and lengthy transition, are also vulnerable. Imagine how many would die if EDS (for example) were to close its doors.

Presence of hostile neighbors

Hostile neighbors didn’t cause any of the collapses Diamond documented, but contributed to some. In Norse Greenland, for example, the Norse worked hard to make their relationship with the Inuit hostile, and persistently failed to learn anything from them about how to build a sustainable society in Greenland’s difficult environment. When the climate cooled, the Inuit were attackers instead of trading partners, contributing to the elimination of the always-small Norse population.

More broadly, history is filled with examples of societies that failed to anticipate the possibility of invasion: The Aztecs, for example, had no idea Spain even existed. A business parallel: How many hardware store chains failed because they never envisioned the type of competition that Home Depot and Lowes would create, and could not figure out how to respond to it?

Not to mention what’s currently happening to Red Hat.

Societal response

Every Collapse is a story of unsustainable growth — growth built on habits that led to the over-harvesting of one or more resources, reducing productivity while the society’s success and population growth increased demand. All are also stories of clinging to invalid assumptions — a failure to adapt to the necessities of the situation, often because of leaders who were distracted by the need to maintain their levels of privilege and demonstrations of prestige.

Some other societies — Iceland, Japan and New Guinea, for example — did develop sustainable societal solutions. The small societies worked “bottom-up.” The larger ones were driven by leaders who took a long-term perspective.

The business parallels are too obvious to require explanation.