New logics, new business models, new commercial frameworks
“.. there is so much economic value sitting in the new subjective needs of people that aren’t on the radar screen of the traditional system and when we hone in on those and figure out how to reconfigure to meet those needs masses of wealth are created.” — Shoshana Zuboff
This article is NOT mine. It is an adapted transcript from a youtube video recording of Shoshana Zuboff for The Management Lab published back in 2008.
I’ve rewatched this video regularly for the last 15 years and every time I learn from it. Zuboff’s ideas are so foundational and societal changes play the long game. There is still as much to learn from her analysis today as it was back then and I assume for the next 15 years as well.
You can find and read more about Shoshana Zuboff on her webpage.
The video:
The transcript in full:
The issue in my mind is that it we’re not talking about a single flaw or a series of flaws when we talk about management today.
We’re talking about a system that was designed a hundred years ago for a specific purpose in mind and that was low cost: the efficient and standardized production of goods that would be affordable for a new world of mass consumers.
And that’s why we created [the current] management system: to be able to oversee the complexity and the coordination demands of this kind of system.
So here we are a hundred years later and the system still works very well for producing low-cost goods for mass consumers.
The problem is that society has moved on and people today, largely because of the success of the system in the twentieth century, no longer experience themselves as anonymous mass consumers. They’re no longer content to be on the other side of an adversarial anonymous transaction.
People today have become more complex, more educated, more informed, more travelled, more experienced and so their needs have shifted.
So when we talk about people either in their role as the purchasers of goods, services consumers or in their role as workers and employees we’re talking about people who are fundamentally different from those of a hundred years ago and yet it was a hundred years ago that the model was built.
So the the problem rather than [being a] design flaw is a system that has grown out of touch with the society around it: the people that it should be serving who must depend upon it for employment and for consumption.
Because obviously in the modern [world] most of us don’t grow our own food or make our own clothes. We have to be consumers and we depend on these institutions for all the things that most intimately affect our lives and our ability to take care of our families, for our health, for education, for housing, for finance. As well as for all the kinds of goods that that we need on a daily basis.
So how do how do we address this problem? How does this problem evolve?
Historically what has happened is that capitalism; because the system that we’re talking about in the 20th century began with mass production but ultimately became the foundation for a whole century of capitalism that came to be known as managerial capitalism.
Because we created the management system to coordinate the complexity of this kind of new undertaking [low cost].
Managerial capitalism was only one chapter in the history of capitalism before that there was proprietary capitalism and before that there was mercantile capitalism. And these chapters of capitalism shift and evolve with changing populations and with changing technological capabilities.
And so as they shift and evolve they emerge with new logics, new business models, new commercial frameworks.
So how are we going to get from where we are to where we need to be?
Right now we have lots of people both in their roles as consumers and as employees whose needs for control over their lives; to live life the way they want to live it, to have choice in the way they conduct their lives, to have a voice, to be connected, to feel, to have support, to get through the complexity of modern life ..
.. these needs on the part of individuals are largely going not only unfulfilled but unknown. They don’t get on the radar screen [of modern corporations].
So the the the big challenge for us now as businesspeople is how do we realign our commercial operations with these new needs?
And it’s very hard to do that from inside the old model. Because the old model was created to keep consumers out. Those are extrinsic factors that we keep on the outside so they don’t mess up our ability to be efficient and standardized and so on so forth.
Because the old model was created to keep consumers out. Those are extrinsic factors that we keep on the outside so they don’t mess up our ability to be efficient and standardized and so on so forth.
It’s very difficult from within the current management system to reach out and realign with the needs of these new populations.
However when you see companies, entities that are actually doing it you see enormous growth and success an enormous release of economic value.
Look at a few examples: iPod and iTunes. We have a traditional music industry that says ‘no’!. We’ll keep music inside our industry and you’re only allowed to get it the way we want you to get it. You have to come to a record shop you have to buy a CD.
And then we have people over here saying ‘no no, we want music the way we want it we don’t want to buy your CD. We want individual music, we want to compile our own CDs, we want to trade it, we want to get it from friends, we want to get it directly.
And the two are at war.
And then along comes a team at Apple and between an iPod device and the iTunes [service] a new configuration of assets [is created]. [They] take music from inside the old model, they migrate it over to the listeners, the people who really want it and we reunite those.
So now we’ve taken those assets and we’ve realigned them with their real end users and as everybody knows Apple iPod and iTunes is one of the great successes of the early 21st century. Because it’s an example of this kind of realignment.
And what it did was release so much economic value.
iPod and iTunes make so much money while those record shops are closing. The old sources of revenue for the music industry we’re dying out.
So this is tremendously hopeful and tremendously exciting because what it shows us is that ..
.. there is so much economic value sitting in the new subjective needs of people that aren’t on the radar screen of the traditional system and when we hone in on those and figure out how to reconfigure to meet those needs masses of wealth are created.
And to me that’s one of the exciting challenges of the next century.
