Sunday, May 17, 2009

Part 4: Doug Rushkoff and the New Economy

Continuing from the last post, here's more on what Doug Rushkoff has to say about the effective way to build a business.

It's not news that people are looking for value. According to Doug, however, the most valuable business intelligence is at least as old as the Late Dark Ages: the rules we take for granted as necessary for doing business are only one group of many rules designed by the few people they benefit.

Doug says, “Most organisations are just holding companies – they don’t do anything but are just names on debt. They promote their stories to get more debt, and CFOs focus on spreadsheets – which can be manipulated.”

Other Misconceptions: Is Good for the Bottom Line?

Doug suggests that CFOs have to understand that the things they are doing to cut costs are really not effective. “Outsourcing is always a high investment to start – you think you’ll make it up later.”

Rather than making that investment externally, Doug suggests putting the money back into the business. “Outsourcing is a losing battle because currency speculators know what they’re doing. Businesses can’t win because it’s not a business they’re in.”

“Companies paint themselves into a corner again and again because they think they’re being clever about markets.” Doug says it’s better to stick to what you know about your business then try to beat speculators who are much better because it's they're specialty -- not yours.

Doug adds that competitive advantage is no longer a CFOs ability to get investors. It’s a CFOs interest in, passion about, and knowledge of what the business creates.

Another way to explain it: transparency is something that happens naturally on the Internet, and that companies need to engage with people “for real.” “A CFO needs to look at employees and customers as the same community. Your best customers are enthusiastic amateurs of what you do as a business.”

Over the course of the last 500 years, experts have been promoted to managerial positions in a wide-spread practice of decentralized management. They then hire the cheapest labor possible to do the jobs from which they've risen. Those in charge no longer do what made them successful, and those they hire can't do the job nearly as well.

On the other hand, if you who are experts produce what you sell, know your business, and engage with your community’s passion for your product, you’ll get a sustainable pay-off.

Seems like common sense, no?

Doug adds, “I hope the era of competence is upon us."

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