Posted by: Alan Braithwaite Monday 22 August 2016 12.10

The decline of the Inkas – a story of competitive disruption

The iconic images of the lost Inka town of Machu Picchu are known to most people. Exactly why it was abandoned to the cloud forest and the passage of time remains a topic of conjecture. However, the conquest of South America by the Spanish is always a component of the story. Yet, the astonishing achievements of the Inkas before they were overtaken by the Spanish and the circumstances of the decline are less well known. There are important business parallels of which I will try to give a flavour in this blog.  

At its pinnacle of success the scale of the Inka Empire was amazing. It stretched for more than 4,000 kilometres, the equivalent of the distance from the north of Spain to the Crimea. And it achieved its rapid expansion in just a century, before the Spanish conquest of 1532. However the conditions for that expansion were put in place over the previous two to three hundred years, matching the maxim from our book^[1] that it takes years to become an overnight success. The building blocks for Inka success were agriculture, organisation and construction. The famed construction methods for which we now know them reflected the wealth, power and organisation that had been created, which also reflected their belief system.

The innovation process

It is important to recognise what they had formed the platform for their achievement, but also what they did not have. The Inkas benefited from one of the most productive agricultural environments in the world, high in the Andes. Europeans might expect harsh conditions, but the valleys create micro-climates allowing multiple crops per year with astonishing plant diversity; there are more than 3,000 types of potato. The Inkas put huge effort into understanding the potential for agriculture and optimising its performance. Secondly, they benefited from large amounts of suitable rock for construction and devised sophisticated ways of moving and cutting rocks to create mortar-free buildings that were earthquake resistant. They used the native Llama as a pack animal which had advantages of agility on very hilly terrain, but could not be ridden and carried light loads only. Donkeys and horses did not exist till the Spanish brought them. The Andes had plenty of gold and silver which the Inkas worked with great artistic skill for decorative and symbolic purposes. Yet they had no money system based on that gold and there was no written word. The Inkas had no expertise in hard metals such as iron which meant that weapons consisted mainly of clubs, arrows and spears using stone and wood. 

The Inka belief system was based around the power of the sun and was phrased in the context of needing to appease for regular earthquakes and volcanic eruptions. In the absence of money as a means of exchange, their organisation was cooperative with people required to devote one third of their time to community projects including construction. In some respects it appears an almost a utopian society - no one went hungry and the Inka lords were strict but benevolent.

The rapid expansion of the empire in its last 100 years was at least partly consensual with regional tribes being 'invited' to join the system with the prospect of improved prosperity. While there was fighting and conquest, it was not on a European scale; indeed war in the Andes is a different thing from Europe because of the barriers to movement. And the achievement was all the more remarkable in the context of there being no written word; communications were organised by runners!

Disruptive evolution

The Spanish arrived in small numbers into this stable, prosperous and expanding environment just following a leadership conflict between Atahualpa and Huáscar in which the latter was killed. The Spanish were treated with reverence because they had emerged from the sea (this was a legend in the culture and the Inkas had no maritime tradition beyond fishing). The Spanish found untold gold and silver riches which Atahualpa was content to pass to them in exchange for their clearly superior weaponry in support of his conflict with his half-brother's supporters. But they used that opportunity to take Atahualpa hostage. It took a few years for the Inkas to realise living and working with the Spanish was not what they wanted. The subsequent rebellion failed and the Inkas were severely weakened by the Spanish introduction of diseases including smallpox. The Inka population declined from 8 million to 2 million and some tribes turned against the Inkas supporting the Spanish.

So the Inka world was disrupted by the superior technology of the Spanish, by their use of horses and by disease. But this was compounded by their failure to understand the belief system and behaviours of the Spanish.

In effect the Spanish changed the rules of competition. The business parallels with today are striking: obsolete technology and a paradigm shift in relation to value and rewards. And for the Spanish serendipity played a role with the unexpected impact of disease. The story goes to show that even the greatest success is ephemeral. Of course the takeover was not a smooth experience, as is often the case today. In the end the Spanish were thrown out when they were weakened in Europe. Nothing lasts, but the Inka and Spanish heritages are remarkable and still visible in South America today.

The implication for leaders is the need to understand how their beliefs may constrain their strategic outlook and decision making.

Contact Alan to find out more

¹Business Operations Models – Becoming a disruptive competitor; Braithwaite, A & Christopher, M; Kogan Page 2015

We have used the Inka spelling rather than the more common Inca because it is consistent with the usage of the original traditional South American language of Quechua.