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SmartData Collective > Business Intelligence > Craving value: sparks for a new economic engine
Business Intelligence

Craving value: sparks for a new economic engine

TedCuzzillo
Last updated: 2008/10/30 at 10:54 AM
TedCuzzillo
5 Min Read
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It’s hard to see through the smoke as our financial house burns down, I know. But what I’ve noticed is more interesting: the first signs of rebuilding.

This month, three experts I read—visual analytics expert Stephen Few, Competing on Analytics author Tom Davenport and digital-media economy specialist Umair Haque—all seem to have knit recent blog posts with the same thread: honest value in business and the economy.

“The macro crisis isn’t really a…

It’s hard to see through the smoke as our financial house burns down, I know. But what I’ve noticed is more interesting: the first signs of rebuilding.

This month, three experts I read—visual analytics expert Stephen Few, Competing on Analytics author Tom Davenport and digital-media economy specialist Umair Haque—all seem to have knit recent blog posts with the same thread: honest value in business and the economy.

“The macro crisis isn’t really a financial crisis, an economic crisis, or a solvency crisis,” writes Haque. “It’s an institutional crisis: the economic institutions of capitalism are in shock.”

Perhaps it’s the shock of having been conned. One of the three levels of transformation he suggests is the return of authentic value.

Authentic, long-run value isn’t created through arbitrage or gamesmanship — what we too often confuse strategy for. Games of off-balance sheet accounting, currency hedging, capital structuring, so-called labor arbitrage — where corporations simply shift to the lowest-cost, or most poorly regulated, sources of manpower — don’t create value. They just shift it around. Corporations who play this game of economic musical chairs are in for a rude awakening – because the music just stopped. And so they must rediscover the simple fact that value creation flows from making economic activities not just profitable in the short- run — but meaningful over the long-run.

Davenport lets some air out of “fluffy” social networking. He asks, “How can we really be producing value if we’re all sitting around blogging and Facebook-friending each other?”

All this fluffiness will be hard to maintain in our next period. He writes that “it wouldn’t be a bad outcome if the current crisis led to a more diligent, industrious economic climate.”

Few takes us down to products. He argues for honest value in business intelligence software. He often confronts badly designed dashboards—adorned with eye candy and other silliness—and urges those who listen to educate customers, not pander to them. The response is too often that, yes, we know, but it sells so there’s nothing we can do. Ah, promiscuity as a business strategy!

Any business that measures its success by current sales revenues or profits without regard for the effectiveness of their products will go for the silly stuff every time. I could argue that this is a poor business model because it’s short-sighted and doomed to fail, eventually resulting in declining revenues, but what’s the point? Businesses built on this model lack the foresight to appreciate the greater intelligence of long-term planning around products and services that effectively address the real needs of people. I believe the root problem that belies such business practices is not strategic short-sightedness or a myopic focus on sales—these are symptoms of a deeper, more fundamental problem. I believe that it’s wrong to build a business on self-interest alone.

Enough with this promiscuity. He adds, “Things that don’t work should not be sold—period. That’s good business.”

If the next president and Congress take Davenport’s advice and nurture big importers, high tech would surely be one of the first picks. How devastating, though, if Indian and Chinese entrepreneurs took advantage of an easy opening and overtook the U.S. even there.

I happened to read Few, Haque and Davenport. But I’ll bet they’re among many others these days arguing for a return to honest value and good business.

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TedCuzzillo October 30, 2008 October 30, 2008
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