This â€œRecessionâ€ May Be Something Other Than A Recession
I think that although we may well experience the two sequential down quarters of growth that would put us officially into a â€œRecession,â€ it will mask the reality that we are in (not â€œenteringâ€) something different.
There really is a global economy so that ecoonmic conditions are also global. Want to build a business? Leverage your brain instead of capital-intensive property, plant and equipment (soft vs. hard assets). The list goes on. It isnâ€™t hard to observe all sorts of fundamental changes that I think point to a conclusion that the Knowledge Economy is real and growing and fundamentally different than the Hard Asset Economy from which we are moving.
If we are indeed shifting from a Manufacturing to a Knowledge economy, wouldnâ€™t it be fair to say that the characteristics of one (such as an economic downturn defined as a â€œrecessionâ€) would not be characteristics of the other? Didnâ€™t the characteristics of agraian economies largely become irrelevant to enterprises involved in manufacturing?
Management in the Knowledge Economy
A very useful chart shows that in the â€œexecution as efficiencyâ€ model leaders provide the answers and employees follow directions. New work processes are developed infrequently and implementing change is a huge undertaking. Problem solving is rarely required and judgement is not expected.
In the â€œexecution as learningâ€ model leaders set direction and articulate the mission and employees discover answers. Work processes keep developing and small changes, experiments and improvements, are a way of life. Problem solving is constantly needed, so valuable information is provided to guide employeesâ€™ judgement.
Daily Reading: A 12 Step Program for Value Destruction
1) Underinvest in innovation (note the relatively small scale involved).
2) Overinvest in consolidation.
3) Make profit an illusion.
4)Defend obsolete business models.
5) Be willing to sell everything out – everything.
6) Never count tomorrow’s costs.
7) Build industries around the cult of the deal.
8) Turn corporate governance into the costliest activity in the economy.
9) Forget that the point of business is to change the world for the better.
10) Expropriate wealth from taxpayers to subsidize market failure.
11) Expropriate rights from people to embed failure into the very structure of the market.
12) Pump more liquidity into decaying DNA.
Reinventing Invention: Online Only Video: The New Yorker
Malcolm Gladwell on the challenge of hiring in the modern world. From â€œStories from the Near Future,â€ the 2008 New Yorker Conference.