Monday, August 08, 2005

A Tug of War: The Design Economy Vs Existing Practice

Most of us are not highly paid CEOs, and for a long time, a secure job (Box 1) is one that we perceived as "indispensable" to the organization, and it was easiest to see that it was so if it has a fair amount of routine (Box 2). It was a time when people who drift from project to project without a precise job description were thought to be at risk of losing their jobs. Read: More routine (Box 2) more job security (Box 1). It is a reinforcing loop.

As firms lose control to set prices and determine what to produce and persuade customers to buy, have you noticed that there is more fire-fighting activities in the office these days (Box 3)? It just seemed that the routine processes were just not good enough to supply what the customer wanted. See Box 3, it is an enemy of Box 2.

Then came a generational change. The rise of China and other offshore manufacturing and service centers force developed economies to move up the ladder into more design work (Box 4), which can only be successful by trying out new ideas and daring to fail (Box 5). Box 4 and Box 5 is a reinforcing loop and its objective is to produce goods and services that wow the customer by making those dreams that they haven’t been able to articulate successfully come true. A by product of the reinforcing loop of Box 4 and Box 5 is to create more firefighting situations for those who are "doing the routine work".

There is a tug of war situation between the reinforcing loop of Box 1 and Box 2 and that between Box 4 and Box 5. A conservative business leadership would hold tightly to the old order and see it slip away but a courageous leadership will try to lead as many people to the new world and logic defined by the reinforcing loop of Box 4 and Box 5. It is an uncertain and difficult world because the speed at which the lower rung countries are climbing up the ladder give you pretty little breathing space.


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