Economists divide the world they study into “private sector” and “public sector” for a reason: The government is huge, and the government works differently from business. You could argue that the economic history of the modern world is one long series of pendulum swings between government and business.
In fact, that’s exactly what Dutch economist Paul De Grauwe argues in a new book, The Limits of the Market (Quartz). De Grauwe says the most recent era of business domination failed to handle market failures in two important realms — climate change and inequality — and that failure has pushed the pendulum back in government’s direction.
Esko Kilpi photo. Magasin III gallery in Stockholm
Smart contracts substitute boundaries. The kernel of a firm is a live social graph of networked interdependence and accountability.
In organization theory, firms are commonly understood as entities adapting to the changing environment. The post-industrial approach is different. It associates change with becoming.
Honest! When we wrote yesterday about Facebook trying to be all things to all people, we didn’t know that Mark Zuckerberg was about to drop a weighty manifesto illustrating just how true that is.
Zuckerberg’s letter, a revision of the company’s mission statement, commits himself and Facebook to “develop the social infrastructure to give people the power to build a global community that works for all of us.” It sets new priorities for the company: strengthen and support existing civil institutions, increase voting and democratic participation, help people feel and be safer, improve the quality of information users access, and promote inclusion locally and globally.
You know all about red states and blue states. But an even sharper divide emerged from last week’s election: urban vs. rural. Republicans control Washington and most state houses today, outside of a handful of places like California and New York. But Democrats hold city hall in 17 out of 20 of the nation’s most populous cities.
As NewCo has been saying ever since it held its first festival five years ago, cities are also where we are inventing a new, more principled economy together. In Quartz, Fordham professor Benjamin Barber makes the case that cities are where Americans opposed to Trump administration policies will band together and have the greatest impact — whether it’s in protecting immigrants from Trump deportation squads, promoting cleaner energy and climate-friendly policies, preserving reproductive rights, or championing diversity and inclusion in business and government.
The real reason Wells Fargo’s CEO had to go. Why did Wells Fargo CEO John Stumpf lose his job while so many other banking bosses never paid a price for their company’s malfeasances during the financial meltdown? In Slate, Helaine Olen argues that the Wells scandal, unlike the mortgage-finance fiasco, involved easily comprehensible bad behavior. Derivatives and credit-default swaps are tough to understand. Opening fake accounts without people’s permission? Easier. Stumpf’s old-school blame-throwing and responsibility-ducking didn’t help him. The Wells story gives us one more reminder that if your desk is where the buck stops, don’t try to duck.
What we can learn from Zenefits vs. Gusto. Zenefits was a hard-driving startup that provided software for human-resources management and that was growing like crazy until it smashed into a wall. The revelation that Zenefits had created a tool for salespeople to cut corners on insurance-licensing requirements toppled the firm’s founder and left the company in crisis. Now it’s seeking a comeback (Farhad Manjoo in The New York Times), promising more transparency and a revamped product. But while Zenefits was doing its move-fast-and-break-things act, a smaller competitor named Gusto that provided similar services took a slower, less flashy route, emphasizing trust over meteoric growth. Now Zenefits is desperately trying to persuade the marketplace to give it a second chance — while Gusto snaps up some of its customers. This story is as close as we may ever get to a controlled lab experiment in the long-term value of business ethics. The findings are exactly what you’d expect: Playing fast and loose just doesn’t pay.
Economic growth is about value added. In manufacturing it was adding value as a transformation process from raw materials to goods. Economic growth today is still about value added but the transformation process is often very different. The industrial process was a linear, sequential chain of predictable acts. The problem to be solved was known and the solution to the problem was clearly defined. In creative work, the transformation process is a non-linear, complex movement of thought from unclear problems to developing solutions. Work is exploration when defining problems as well as for creating solutions.
The worlds of mass manufacturing and contextual, problem-based work require very different thinking and skills. In the learning-intensive world we live in, it is not about reductionist job roles and narrow, clear responsibilities any more. Everybody needs to take part in the common movement of thought.
I remember how that nagging feeling just underneath the surface of my thoughts turned into a full blown problem. At first it was just some white noise in the back of my head that followed me from meeting to meeting. Then the issue graduated into conscious thought. “I really need to figure that out,” I would think but then do nothing about it. Finally, it began keeping me up at night, invading my thoughts during family time, and generally occupying every available space in my mind. It was now a problem I could no longer ignore.
I spent some time in the problem space, exploring options and tinkering with possible solutions. I talked to a few of my peers on the management team. It turns out they had been seeing the same issues and feeling the same way. We got together and compared notes, riffed on ideas, and came up with an action plan. It was going to be a big change for our company, but it was a good plan and we were actually getting kind of excited about it. My anxiety had turned to optimism. I might have even felt a little bit of, ahem, pride.
Dubbed the Greatest Show & Tell on Earth, last weekend’s World Maker Faire drew tens of thousands to Queens, New York, to play with everything from DIY robots to puppets made from trash. Behind all the play, though, is something much bigger — a movement with the power to build the critical-thinking skills that companies and President Obama call key to the future economy.
Yet the maker movement has yet to make big waves in corporate America. And this is a missed opportunity. While technology firms, government, and education embrace making as the future, other industries can reap rewards by inspiring employees to both think of solutions and make them happen.
Barefoot miners clamber down tunnels so we can have cheap batteries. Apple, like everyone who else who makes devices that depend on rechargeable batteries, needs cobalt. 60 percent of the world’s cobalt comes from Congo — from places like Kolwezi, in southern Congo, which features in an in-depth (and beautifully designed) Washington Post report on the cobalt supply chain. Cobalt here is mined by hand, almost always by impoverished people working in inhuman conditions — an “informal army” of barefoot “artisanal miners,” a euphemistic label for the subsistence-level work. Children wash the raw cobalt (in the same water their communities use to bathe and water their crops) and then it’s shipped off to China, where it gets put into lithium-ion batteries. Those batteries power phones, laptops, and now electric autos. The supply chain is complex and involves lots of handoffs from one company to another, which makes accountability hard. Many of the companies the Post contacted acknowledge that they need to set and enforce higher standards. The tough part is insuring that such demands actually translate to better conditions for the Congo miners at the other end of the chain.
Blue Apron’s warehouse woes. Like many startups, Blue Apron, the meal-kit delivery service, has scaled up fast, building warehouses and hiring workers to meet demand. Along the way, it also faced fines for an unusually large number of health and safety violations. That’s according to an investigation in Buzzfeed that focuses on Blue Apron’s facility in Richmond, Calif. Blue Apron created a lot of jobs in Richmond, and the hardscrabble city badly needed them. But the company “was unprepared to properly manage and care for those workers,” and the “chaotic, stressful environment” in its refrigerated warehouse made work an ordeal. The problems peaked one day in Aug. 2015 with two separate threats of violence and the conclusion of a tough review by workplace safety regulators. Since then, things have improved to some degree. But for Blue Apron, as for so many other companies seeking to transfer the efficiencies of the digital realm into the physical world, the Facebook mantra of “move fast and break things” turns out to be lousy advice. Food prep is difficult and potentially dangerous work. Blue Apron and its peers owe it to their workers and customers to find a better balance between scale and humanity.
Facebook’s data center is a cold mirror. Luleå is a town in Sweden, just below the Arctic Circle. Facebook operates a ginormous data center there because the frigid air helps cool its heat-radiating servers, and there’s a bounty of hydroelectric power to fuel them. Yesterday, Mark Zuckerberg posted a set of photos of the Luleå server farm, providing a remarkable tableau of what’s really a kind of modern temple of industry — a data-age Great Pyramid. We think of cloud computing as evanescent bits and ethereal data; these hulking turbines, massive rack arrays, and yawning corridors are the material forms of the cloud, repressed but persistent. The images remind us that there’s really no escape from the corporeal world; we can displace the evidence of our digital media’s physical substrate and tuck it away in the Arctic ice, but it won’t be denied. You’ll also notice how few people inhabit these images. The better we get at maintaining the technology that connects us, the more we disappear from the picture. What stubbornly remains behind: mountains of shredded hard drives. Facebook is showing them off to reassure us about its commitment to privacy, but they’re also a heartbreaking reminder of sheer waste.
Today’s partner is tomorrow’s competitor. Fedex and UPS have thrived as haulers of Amazon’s crates, but now, The Wall Street Journal reports, the Seattle-based online retail giant is weighing bringing the delivery network in house. Running its own fleet of trucks could save Amazon more than $1 billion a year. Taking on its freight-giant partners would also be a vast and risky undertaking for Amazon. Once ubiquitous, this kind of “vertical integration” has fallen out of fashion in corporate circles. But Amazon’s burgeoning, voracious need for speed and capacity is driving it to take all kinds of unconventional steps.
