Umair Haque / Bubblegeneration
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Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Thursday, July 27, 2006

Macropocalypse: Next Big Things - The Rebirth of Labour

The rebirth of labour is very much on the cards. For the last decade, management has gotten "rich" by appropriating rents that should have flowed to employees. The result has been an unprecedented innovation crash, concentration across industries, hugely growing income inequality, and the social malaise that a nation of workerbots droning away around the clock for peanuts must necessarily bring.

The most interesting point is that strategically, of course, redistributing income throughout the firm according to tenets which contradict not just economic value creation, but the basic rights of labour (ie, I'm the CEO, so I should capture 50,000x as much as you) is an enormous error in the long run.

Wal-Mart's demise (which has already begun) will be a long, slow whimper, not a loud bang - one driven by the fact that it's sucked the innovative capacity out of not just itself, but out of large swathes of America as well.

-- umair // 3:24 PM // 5 comments


U - Absolutely.

A personal favorite as quoted on Whole Food's website concerning core values...

"Shared Fate -
We recognize there is a community of interest among all of our stakeholders. There are no entitlements; we share together in our collective fate. To that end we have a salary cap that limits the compensation (wages plus profit incentive bonuses) of any Team Member to fourteen times the average total compensation of all full-time Team Members in the company."

// Anonymous Anonymous // 2:04 AM

hmmm... does this suggest some sort of opposition between operational efficiency and innovation? Such that an over-emphasis on one reduces the other?
// Anonymous Anonymous // 5:25 PM


Probably at one level. You can't treat your employees as a commodity cost to be minimized, and at the same time, consider them to be a competitive differentiator that should be invested in.
// Blogger Composing // 5:48 PM

Umair, I agree with this - it goes hand in hand with your contention that strategy is becoming commoditized and that fostering creativity is the next major frontier.

It starts with education and clearly there is much to be done to revolutionize it for the world that lies ahead. You may have seen Sir Ken Robinson's talk at TED on this very subject - he's singing from the same songsheet.
// Anonymous Anonymous // 7:51 AM

Does the company exist to provide a living to the employees or do the employees exist just to service the company? The answer should be both, and there should be a mutual benefit. But when a company is publicly owned, the shareholders may have more power than the employees. This will fail in the long run.
// Anonymous Anonymous // 8:06 PM

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