When the financial environment goes through a sudden and radical change, every person and every enterprise will go through an urgent rethinking, since anything and everything about the future that we once had reasonable expectations about is now open to question. Since the nature of a massive degraded environmental change is so complete and the future so unknown, many of us face change with a feeling of barely controllable panic.

But panic is a dangerous response, likely to make a bad situation worse. The consequences of panic reactions and panic decisions may be felt long after the initial causes have been long forgotten. “The engine’s about to explode.” Maybe it is. Maybe it isn’t. When I was learning to fly a Cessna 150 I always kept the glide-slope ratio of my plane in mind. With a seven to one glide slope, if I was one mile high, even with the engine off, I had seven miles to find a spot to glide to.

The word essentialism has been around for awhile and meaning something other than what I have in mind here. Old essentialism is about the notion that everything has an essence. I would like to repurpose the word for these times and base its meaning on essential rather than essence. In a radically degraded environment we need to calibrate what is essential to survive the times, and as an enterprise, we need to see clearly how we can get through and emerge at the other end most able to re-flourish.

The new essentialism is intended to give us a means of quickly reengineering the enterprise in these times. Using it, we can look at our businesses, our non-profit institutions, even our infrastructure, and ask what is absolutely necessary for survival? And to answer that question, we need to ask ourselves what is it that we do. If we are an organization that teaches young people, for instance, then we might be guided by that light as we work outward from that core mission. First, we must continue to have students, whatever that implies. Second we must have teachers. Then we might need to have teaching materials. What about the physical plant? Heat? Light? Telecommunications infrastructure? Maybe. But let’s make sure we have students and teachers and a place for learning first. Oh, wait! What about administrators and boards of directors and their limousines? And cupcakes for birthdays? 

Let’s think about Microsoft for a moment. In late 2008 Microsoft announced their first ever layoffs: 5000 employees worldwide out of their 94,000 total employees. It’s not that Microsoft needed to fire 5000 people. Revenues were still mighty. It was, as Steve Ballmer explained, that their model showed the PC world shrinking over the long term. What alternate course of action might essentialism have suggested Microsoft do? First, one would need to establish what it is that Microsoft does. I think it would be hard to argue that first and foremost, Microsoft creates computer systems using the intellectual capacity of its employees. And since brilliant employees are the present and future essential of Microsoft, Microsoft has, in the past, invested heavily in educational institutions that would turn out prospectively brilliant Microsoft engineers.

When the economy recovers, will there be an unlimited supply of brilliant engineers, or will the world return to a fierce competition for the best and brightest? A year ago, Microsoft was in competition for talent with Google, Yahoo!, HP, Cisco, IBM, Intel and a few other major players. Part of the competitive advantage of any of these organizations was and will be their culture. What’s the message Microsoft sent to the world when it announced that 5000 employees would be given the boot? Maybe it would have been a better investment in the future if Microsoft had given 5000 employees a paid year or two sabbatical, and preserved what was essential to their continued competitive advantage?

Warren Buffet famously said that when the tide goes out you can see who was swimming naked. Essentialism tells us that maybe we didn’t need that bathing suit as much as we needed swimming lessons.