Fabric, Tariffs & Friction

Back in the late 17th Century, India and England began engaging in global trade. The opening of this marketplace was a boon for both countries and the surrounding regions. At the time, India’s most desired export was cotton, a less expensive, easier and simpler to dye, very comfortable product that was new to Europeans who had previously been confined to wool, linen and silk. To the EU-based fiber industry, cotton was unwanted competition.

The EU fabric community lobbied their legislatures to ban the sale of cotton. Other impacted EU businesses echoed their fiber-friends’ efforts. The masses of consumers went on enjoying more options and better prices. EU business successfully lobbied their governments, and in 1685, England imposed a 10% tariff on all East Indian goods. The lobbying continued. Five years later, the tariff was raised to 20%. The lobbying continued. 10 years later, more duties and tariffs. The lobbying continued until 1721 when the English Parliament banned the import of any cotton-based product from India.

At the dawn of the 19th Century, Britain surpassed India as the world's leading textile manufacturer, because of England's ability to suppress India's cotton industry.

This story illustrates two patterns that inhibit healthy communications, collaborations and communities. One is the deleterious impacts of friction in transactions and the other is known as the “Minority Rule.”

The “Minority Rule” postulates that a small, intolerant, self-focused minority can bend the will of the majority. Many times, in many places, we find examples of a vocal minority that has an impact well beyond their numbers (e.g. the peanut-ban on planes, all commercially distributed drinks are Kosher). This minority rule is alive and well in complex systems.

Certain stakeholders exert unequal influence on the entire system, to the detriment of the majority of the system’s stakeholders. Elected officials operate under a certain set of regulations and motivations, and they operate accordingly. Pharmaceutical companies operate under a certain set of constraints and regulations, so they lobby for a certain set of policies. Dr. Cahana, a global health expert, breaks down how friction shows up and can be removed from one of the most important and complex systems, healthcare.

Listen to our conversation!

Like English textile merchants, pharmaceutical executives and elected officials, the path of self-interest can provide short-term success, but the externalities of this self-focused perspective is not a recipe for sustained success. To achieve long-term sustainable transactions, be it financial, legislative, relational, or other, they must be friction free, not friction full. The fewer barriers we have between points A and B and C, the more A-Z benefit.

We can remove friction from our transactions by providing our stakeholders with more clarity and choice. By removing friction, it becomes easier to connect, and connection is the solution to the challenges we face. We have enough land, food, water, money, air, and housing for all eight billion of us, but the systems we rely upon are full of friction, making it harder to connect A to C. This results in isolationism, silos, and other toxic behaviors.

Think about your organization, your team and your relationships. Where is there friction? What would be possible if this friction was reduced or removed? If you need help identifying, exploring and removing your friction, and improve how you, your people and processes are connected, give me a call!