This hack rationalizes one of the simplest possible solutions to the problem (mandatory liability for services). It also explains today's economic ecosystem, discusses the very sources of defficiency and considers various scenarios to handle them.
Immature markets don't provide enough bearing to keep economy on course. Either oligopoly or lack of product utility understanding provide fertile ground to forces stearing the industrial production power off track. Companies like Enron have clearly shown the distraction potential for that anomaly. The built-in industrial resilience makes it difficult to correct malicious actions while in the ealy stages. The limited Earth resources may not allow us to correct huge industires being in maturity stages. The sense of doing business may evade us complitely.
Former skeptiks neglected this issue arguing that the portion of new, not mature industries in the economy is minute. The situation has changed. A significant part of economy is captured by companies less than 25 years old. The recent advanceent into knowledge economy means that we will basically create a plethora of new companies overnight along the idea flow.
It is essential that the efficiency targeting is extended by some form of effectivness targeting. This has many implications. One typical conversations topic is long term (effectivness) vs. short term (efficiency) orientation. Another topic is leadership as a kicker function vs. leadership as a function giving people sense and believe in a cause. The A vs. B approach has no sense. It will not carry us further. The economic system, its set of laws and best practices has to enable AND case. How can we have A and B? How can we do right business while doing it right? How can we prime executional leadership with moral bearings? This would be the right set of questions. Some of them are given answers in this hack.
Industrial goods were required to satisfy manufacturer's warranty. The by law required warranty doesn't matter much today. In many markets the competition has grown and the buyer's understanding about what they can expect from certain industrial goods has improved significantly. You can see manufacturer's warranty -that is exceeding law limits by many times- as a differentiation factor today. It wasn't that great several decades ago, when policy makers primed development by establishing warranty law for industrial goods.
Today, we have the same Wild West in services. The society needs to come up with a flexible (widely applicable) but firm (unambiguous) set of laws that frame and demand responsibility for the taken actions and delivered services. We need mandatory service level warranty. A consultant should share the resopnsibillity for the outcome by law. A service company should be obligated to reimburst additional incurred expence that it initially promiced to reduce.
The mandatory service level warranty law is a simple solution that intercepts nonsense businees in its inception.
Some industries have even put this not immaginable nonsense in stone. For example, the hype cycle promoted by Gartner is a standard body of knowledge in IT. The deviation of the hype spike from a normal steady growth curve is the measure of cheating. New IT businesses (startups) aren't measured by merit any more, but by the ability to get to the spike's hight. It doesn't matter, how great the plateau of productivity is. Any micro sense idea with a team that generates great buzz wins over. Customers do respond by denying new technology adoption. No wonder VC industry suffers a great deal. The fall down of VC industry cuts investments in turn. The non-market-hype driven economies are doing better in this sense.
Cutting investment and particularly technology investment leads essentially to malnourished production base. It results into less competitive national economy and evolves into economic crisises. Just a few percentage points cut back is enough to lose system resilience and a chance for the same or better future. We cannot afford delivery of uncontrolled service quality.
The question of straightening service quality delivery and aligning short term with long term wealth creation targets is the primary question for survival of service economies. If resolved properly it will enable true knowledge economy.
- Incentivise sense leaders about this issue
- Break up the task in packages to be picked up by execution leaders. It should primarily target professionals in law and govennance.
- Spread the word. The practical sense of any law isn't in paper but in broad understanding of the issue and wide adoption of best practices. The best law is the one that has never been written down, but everybody got it during the establishment process.
- Check that the leadership got it. Pivot upon results.
Economic data charts: URL: www.wolframalpha.com
Gardner's curve: Antony Reynold URL: http://blogs.oracle.com/reynolds/
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