SME-Author: Ekaterina Leran
For: Investors, developers, bankers, ESG specialists
Modern investment planning models don’t lead to real improvements. Reality is far more multifaceted than all existing investment planning models and practices. Tables and calculations are not useless, but they describe not what actually happens.
Today, more than twenty “technological approaches” are known: ISO, Stage&Gate, Six Sigma, PDCA, PMBoK, BSC, TRIZ, and others. Each approach is a tool for “increasing the efficiency of product development processes,” “ensuring management consistency at all organizational levels,” where fulfilling requirements for investment efficiency indicators at the pre-investment phase of the project cycle and setting deadlines “is the foundation for successful implementation of the investment and operational cycle.” Any traditional investment design model—from UNIDO to Stage&Gate—proceeds from one fundamental premise: the future can be modeled. If you correctly fill out the sections of the feasibility study (general information, executive summary, industry description, marketing plan, production plan, organizational plan, risk assessment, financial plan), if you calculate net present value (NPV), internal rate of return (IRR), payback period (PP), and break-even point—the project will be successful.
Millions of square meters of concrete, glass, asphalt. Thousands of hectares poured into uniform molds. High-rises, shopping centers, transport interchanges. All of this is built according to the same investment models. All of this has passed all Stage&Gate “gates,” corresponds to NPV and IRR—bright, colorful, like a flash, but uninteresting. The typical planning model assumes that an investment project is a flawless construction. You built a factory—it stands. You created a product—it sells. You developed a territory—it lives. This is an illusion.
Look around. The models exist, but real success does not. Technologies change, and maintaining results has become more expensive than construction. Ghost cities built according to all the rules of investment modeling stand empty or turn into cemeteries of faded facades and unfinished skyscrapers. This is a direct consequence of investment modeling that ignores natural rhythms, necessity, quality, and social effects.
Modern modeling is constant growth and racing, a shift from permanent to temporary, and from temporary to even more temporary. Revolutionary change ignores context and imposes a new limited reality where there is “convenience,” but no meaning.
When an investor builds a residential complex, they calculate: how many apartments, what area, how many parking spaces, what will be the income from sales. They don’t calculate: how will people interact with each other, will they have a sense of community, will they feel at home or just “live out square meters,” what is important to the indigenous population that respects the memory of places and loves the land.
When a developer designs a district, they think: where to place shops, schools, playgrounds—to comply with regulations. They don’t think: will people know their neighbors, will children play together in the yard, will residents have a sense of belonging to the place.
When an urban planner plans a city, they decide: where to lay roads, where to build a metro, where to place business centers—to optimize traffic flows. They don’t decide: how will people feel when they walk down the street, will they have acceptance of the local architecture, will they have a sense of safety, a desire to return home, or will they avoid this place.
And here is the result: Apartments are not “home,” but a “place where you sleep”; people in cities live next to each other but don’t know each other because it’s not safe and it’s no longer customary to simply greet, look, or respond. Districts where children don’t play in the yard because it’s not safe and the children’s yard is smaller than the parking lot. Streets you don’t want to walk on because they are stuffy, noisy, identical. At every approach, a person is surrounded everywhere by commerce. This is not for choice. In reality, this is the absence of choice.
Monocities whose feasibility studies once passed all Stage&Gate “gates” slowly die when the deposit for which they were created is exhausted.
Fatal Change of Habitat
Simplified models of investment modeling and assessment of production factors, resources, consumption, implemented in life, have created a flat and temporary life. This is not a “side effect” of development. This is a direct consequence of a paradigm in which investment modeling considers territory as a resource, not as a living environment.
The UNIDO model, created in 1978 for developing countries, assumed that the state or an international organization could control all variables. This was an assumption of that time. Today, in a world where the environment changes faster than a feasibility study is written, this has become a trap.
The modern paradigm of investment modeling is a paradigm of rupture. It comes to a territory and says: “Everything that was before us doesn’t matter. We will build something new, and this will be progress.” But this is not progress. This is amnesia. This is a rejection of the memory of place, of the connection of generations, and very often—of the very reasons for life itself.
The limitation of assessment zones and the high speed of spreading identical international solutions drive humanity into a dead end—these are huge cities of mass movement, psychosis, diseases, complete absence of peace, silence, and rest; plantations of “modern” factories, shopping centers “right next door” using common utilities and thousands of hectares of land poured with concrete. Places with destroyed ecology that you don’t want to return to. Racing has become a priority instead of the value of life and the human being themselves. A person does not become healthier, smarter, and happier—they become more lonely, exhausted, and disoriented.
Look at modern megacities. The air is dirty, heated, and dried out. Concrete pours seal the earth, destroying it from within. Plants have become a small decoration, not a necessity. Look at people: they wake up in small boxes called “apartments,” descend in a stuffy elevator, walk through a dirty passage to the metro, and then everyone looks at their phone to avoid meeting others’ eyes. In offices, people sit in open spaces but don’t solve issues with colleagues without a messenger. People return home, order food through an app, watch a series, go to bed. This is not life—this is imitation.
NPV does not include the cost of disconnection. IRR does not account for the growth of mental illnesses. A person in an unnatural environment becomes closed, anxious, aggressive. They don’t trust, don’t feel, don’t dream. They perish. A person doesn’t care about the environment because the “environment doesn’t care” about them. A person doesn’t understand responsibility because the common environment doesn’t belong to them, which means it’s “no one’s.” Such is reality, and this no longer requires proof. These phenomena are not a “problem of upbringing” or a “problem of culture.” This is a problem of the environment that is formed by the presence of exclusively financial solutions.
Investment planning models (UNIDO, Stage&Gate, and others) consider territory as a blank sheet. Planning models don’t see the living fabric of life—”tearing” it makes it easier to invade. For example, NPV doesn’t include the cost of torn social connections, and IRR doesn’t account for the loss of meaning and memory of place. The payback period doesn’t measure the destruction of life’s rhythm. Destruction exists, and it has a price. This price is paid not by investors, but by people who live after the changes. It’s worth noting that everything is subject to quantitative measurement. It’s important to analyze more broadly, more subtly, more accurately, and to build plans and forecasts more thoughtfully.
Building a residential complex is not just erecting walls. This is an intervention in traffic flows, social infrastructure, migration patterns, the psychology of the district. Creating new production is not just installing equipment and creating new jobs, but changing the labor market, ecology, logistics, relations with the local community, requests, and needs.
Transition from Templates to Local Values
Planning tools, models, recommendations should not displace everything existing as insignificant or outdated and should not be only external, “imposed.” Blind innovations are bad revolutions conducted quietly, disguised, but always with consequences. Innovations cannot exist divorced from the essence of what is being changed. Ignoring the foundation of innovations is always painful. Innovation is not a separate methodology, and it is not universal.
It’s correct when Innovation is something new built into the existing context, when evolutionary change respects the environment into which it enters. Innovation doesn’t destroy the foundation—it strengthens it. Novation is a rupture with the existing. Novation doesn’t integrate—it replaces. Example: typical construction that erases local color, destroys the historical environment, imposes a different rhythm of life. Modern investment modeling confuses these concepts. It calls novation innovation and sells it as “progress.” Real development is not destruction, it’s not rolling calculated reality over “old,” it’s not building a new road next to “old.” Development is an organic transition and continuity, it’s the ability of the new to strengthen the old, not destroy it or “double” it.
Many, many cities today are losing cultural color, people abandon their lands and forget traditional ways of farming, local economy, connections, medicine, gastronomy are dismantled, unified standards of consumption and perception are unified and introduced. This is the destruction of a proven foundation, collapse. This is dangerous.
Most investment models assume that a new project will replace life principles that have existed for centuries and will live forever. This is naive. The environment changes. Technologies become obsolete. Communities transform. What was an investment yesterday may become a burden tomorrow.
True innovation is not novation that comes and changes everything. This is a change that:
● Integrates into the existing context
● Respects history and traditions
● Strengthens connections, not destroys them
● Corresponds to the rhythm of life, not imposes its own
● Preserves meanings, not erases them
Investment projects must necessarily undergo examination for real necessity, be developed with the participation of local specialists: not necessarily financiers, economists, or lawyers, but those who know the habitat, traditions, ways of life. It’s important to look at what changes and why. Life is not an experiment, and you cannot live it twice. Life in each place, on each part of the earth, is priceless and unique.
Revival of Life’s Rhythm
Violence against rhythm is what most investment projects propagate. When you slow down implementation to “pass all gates,” you miss the window of opportunity. When you speed up construction to fit into PP, you get defects. Traditional investment modeling is obsessed with deadlines. Payback period (PP) is a deadline. The implementation period of the investment phase is a deadline. Each Stage&Gate point is a deadline.
The technology you implement has a maturation rhythm. All living systems have rhythm. When you ignore the natural cycle, you get a product that is either premature or belated.
The principle of evolutionary plasticity according to Leran is the ability of a system to mobilize for a task and transition to a state of rest after completion, to change in form, place, composition. An investment project built on this principle corresponds to necessity and itself, as the needed rhythm.
Criteria for Mature Investment Modeling
The basis of libertarian ideology, which claims that “the market will solve everything better than the state.” Today it’s already becoming clear: no, it won’t, because the market has a different planning horizon and different goals.
A project built on the principle of accompanying environment is not a plan, not a rigid structure, not a requirement for content, but a flexible framework, an architecture of conditions, a map of possibilities within which life can develop.
Direct modeling is when an investor (or state) decides what a territory, product, or community should look like in ten years. They make a plan, allocate resources, appoint responsible persons, establish control points. This is the UNIDO model in its pure form. Direct modeling works only in sterile conditions. In the real world, the model loses.
How to distinguish a mature investment model from an immature one? By several signs:
- Presence of restoration parameters. If the model doesn’t include environmental restoration costs—it’s immature.
- Presence of a completion phase. If the model doesn’t provide for a decommissioning plan—it’s immature.
- Respect for rhythm. If the model is built on deadlines, not on quality principles—it’s immature.
- Ability to change. If the model assumes a static construction—it’s immature.
- Creation of accompanying environment. If the model tries to directly model the future—it’s immature.
- Direct responsibility. If the model assumes payment of fees instead of direct restoration—it’s immature.
- Accounting for multidimensionality. If the model considers only financial parameters and there are no calculations of social effects, which have 9 bases according to Leran—it’s immature.
New logic of public planning: instead of “build and forget”—”create and adapt.”
What This Changes in Practice
If you apply what has been said, the picture will change radically.
A residential complex ceases to be just a set of square meters. It becomes an intervention in the social fabric, and its financial model should include not only construction costs but also the cost of integration into existing infrastructure, the cost of creating community, the cost of long-term maintenance of environmental quality.
Industrial production ceases to be just a factory. It becomes an element of the territory’s ecosystem, and its financial model should include not only capital costs but also environmental restoration costs, personnel training costs, creation of accompanying infrastructure.
A technological startup ceases to be just a product. It becomes a living organism, and its financial model should include not only growth plans but also decommissioning plans, not only scaling strategies but also cycle completion strategies.
Territorial development ceases to be just construction. It becomes the creation of an accompanying environment, and its financial model should include not only direct costs but also investments in business autonomy, in its ability for independent development and growth. This is not anarchy; this is maturity.
Investment, Like War, Is a Loan from the Future
We take resources today to create something tomorrow. This loan must be repaid. This is recognition that the environment has its own rhythm and the rhythm must be respected. This is recognition that the earth is not a resource, but that whose potential feeds and on which we stand.
Traditional investment modeling forgot. It focused on how to take and forgot about how to return. It focused on NPV and IRR and forgot that the earth is not a line in a financial plan but a substrate that must be preserved. An investment project is a construction frozen in time, a burden on all society after quick payback.
Modeling of accompanying environment is not a rejection of mathematics and fewer calculations. This is more responsibility and a return to essence, more plasticity. Investment is not a mechanism but an intervention. Wise management knows that “innovation = new + context,” and “novation = new – context.” We cannot model the future. But we can create conditions in which the future can unfold. A modern project is not a process of manic construction but a living organism. It knows how to enter when there is a need, to compress when demand falls. It knows how to expand when new opportunities appear and migrate when the environment changes. Evolutionary plasticity instead of static planning, accompanying environment instead of direct modeling, earth as substrate instead of consumed resource, 9 bases of social effects instead of single financial indicators—this is the only honest investment.
