CATASTROPHIC OPPORTUNITY

7/11/2025

7/11/2025 12:45:00 pm

Totally agree with your latest observation of catastrophic company events. I have a team of analysts here in the applied innovation group here at UC Irvine studying this problem with access to pitchbook and numerous other databases.

Theodora J Guest-Civitenga

7/11/2025 01:31:40 pm

Yes, Adam, this is exactly what is going on. We have seen economic shocks with industry impact before -- for those of us who have been around a while, we have survived:
• The S&L Crisis and recession of 1991.
• 9/11 and the dot.com bubble burst.
• The subprime mortgage lending debacle of 2008 initiating ‘the great recession’, housing recession, stock market losses, collapse of auto-dealerships (not all saved by ‘cash for clunkers’) and stress on related industries.
• Covid-19 and shuttering of businesses/modifications of workstyle, massive transfer of wealth from lower and middle class to upper echelons, expansion of remote work technology sector (some which has since contracted).
Now we are faced with another odd combination of events to tease out:
• War in Ukraine
• War in Middle East
• Tariffs
• Significant layoffs in Federal Agencies, NGOs and related
• Removal of non-citizens affecting demand for housing, goods/services and participation in the labor markets
• Potential reduction in Medicare payments
• Contraction in NIH and similar federal grants
• Significant proposed reduction in the overhead rate paid on NIH grants
• Removal of some foreign students from educational orgs
So, every economic shock has an impact globally, and some in ways that are hard to immediately discern given how sophisticated and highly interdependent the US economy is. Given this uncertainty, and despite the ‘big beautiful bill’ still being digested, we are seeing almost paralyzing fear and panic, and orgs are indeed making rash, knee-jerk decisions.
Why Sr. leaders feel it is a viable strategy to cut and then dump on remaining talent is baffling. This never serves an organization well and we are not in an age where generations will stay out of loyalty (sorry people, that ship sailed). When you make the wrong sorts of cuts, make hasty and insufficiently thought-out decisions, you send the wrong message to your biggest asset – your people, and the most marketable ones, the talent you want to keep, will go. Right now people are scared, upset, feeling disrespected and devalued. They are questioning if these are the leaders they should follow.
The greatest difference I’ve noticed in this most recent crisis vs. the pandemic, is that in the pandemic, despite the ‘panic’, folks truly seemed to want to set differences aside, and work together to solve problems, keep people safe and (for the most part) save lives. This was particularly true early in the pandemic when there was limited information as to the nature of the threat. What did bind everyone together was shared vulnerability as humans.
In the current climate, I’m not seeing this banding together. I’m seeing some less than stellar behaviors of leaders not acting with that same regard for shared vulnerability, I’m seeing cowardice and self-preservation. In a crisis you also need bravery. Bravery is very much missing right now.
I always go back to Ram Charan’ and Noel Tichy’s book, Every Business is a Growth Business. The authors detail case studies of several well-known firms encountering maturation, lack of growth and other such stresses to the business, and counsel us to ‘grow or die’. Teachable points are:
• What are your business ideas for bringing profitable growth to your organization?
• What values do you want your organization to embrace in support of those growth ideas?
• How will you generate…positive emotional energy?
There are several other teachings, but two other notable ones are:
1. “Growth is a mentality created by a company’s leaders”
And perhaps the most important:
2. “Growing is less risky than not growing”.
In medicine, science, technology, and related fields, standing still means falling behind the competition.
For companies and organizations who have had core business impacted by this most recent economic shock I would say, what complementary products or services could you offer to your existing client base to grow your pool? What partnerships could you create to benefit your client-base, that would create value and be a win-win for you and the partner?
Focusing on growth initiatives helps move the organization’s energy from a place of embattlement and fear to optimism and engagement.

CJ Doherty

7/15/2025 09:04:01 am

Hi Theodora,

I totally agree with you. Every company should keep an updated list of ideas for complementary products or services that they can begin to act upon when the time is right.

Reinaldo Ramirez link

7/12/2025 01:39:56 am

Really compelling perspective. It’s true that many companies are navigating what you aptly call “catastrophic failure” by offloading costs onto employees without real investment in them. That said, I appreciate the shift in mindset—seeing these moments as opportunities for skilled problem-solvers to step in. The challenge, as you point out, lies in identifying these companies before they hit the wall, and in crafting solutions that speak directly to their operational pain. This reframes crisis as a door for strategic talent to walk through—if they’re ready.

Allen

7/12/2025 07:22:53 am

Where were you last month, could have used your help. This is exactly what happened to me and after all of the promises made I got blown out and a changing of the guard happened. I should have known. You and I are chatting next week.

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