Biology of Business

Installing Thermal Windows

TL;DR

Companies with pre-identified cuts cool 50% faster (Meta $1T vs WeWork bankruptcy). Build elephant ears for your business.

By Alex Denne

Companies with pre-identified thermal windows cool 50% faster than those scrambling during crisis. What is a thermal window? It's a contingency cost reduction framework—pre-identified components that can be shed rapidly when your organization overheats. WeWork had no thermal windows—when overheating hit in 2019, they cut frantically, damaging core operations and destroying 80% of their valuation before eventual bankruptcy. Meta had thermal windows: when Zuckerberg announced the 2023 "Year of Efficiency," the company executed 21,000 cuts systematically, added $1 trillion in market cap, and emerged stronger.

The biology is literal. Elephants evolved massive ears not for hearing but for heat dissipation—blood vessels dilate near the skin surface, circulating 12 liters per minute, dumping excess thermal load without compromising core body temperature. Ear flapping can lower body temperature by 9°C. Dogs pant. Jackrabbits have oversized ears. Every warm-blooded animal maintains pre-identified thermal windows: body regions where heat can escape quickly when metabolic activity exceeds cooling capacity.

This framework builds the corporate equivalent of elephant ears: a ranked inventory of products, services, geographies, and features that can be shed rapidly when temperature spikes. Classification follows a cuttability hierarchy—from experimental features (immediate cessation, minimal impact) to adjacent products (3-month wind-down) to core functions (6+ months, significant restructuring). The cutting sequence creates cascade plans: Level 1 cuts achieve 10% reduction, Level 4 reaches 40% through core restructuring. Annual planning should include thermal window inventory—having thermal windows isn't pessimism, it's thermoregulation. The Operating Temperature Diagnostic chapter provides the full framework for assessing when your organization is overheating.

When to Use Installing Thermal Windows

Use during annual strategic planning, when temperature diagnostic shows risk of overheating, before crisis hits (preparation), or when considering new initiatives (assess their cuttability).

How to Apply

1

Map All Business Components

Create comprehensive inventory of products (core, adjacent, experimental), services, geographies, customer segments, features, infrastructure, partnerships, marketing channels.

2

Calculate Thermal Load

For each component measure: direct costs, indirect costs, opportunity costs, revenue contribution, profit contribution.

3

Classify by Cuttability

Uncuttable Core (>20% revenue, strategic moat); Difficult to Cut (5-20% revenue, 6-month wind-down); Cuttable (<5% revenue, 3-month wind-down); Easily Cuttable (negative/minimal revenue, immediate cessation).

4

Create Cutting Sequence

Design cascade plan: Level 1 (10% reduction): Easily cuttable. Level 2 (20%): Add cuttable. Level 3 (30%): Add difficult. Level 4 (40%): Restructure core.

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Related Organisations for Installing Thermal Windows

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