by Kenneth Rudich
In the last post, “An Economy Built on Quicksand,” I revealed how the start of a global economy back around 1982 has forever changed the U.S. economy. One economist even went so far as to describe it as moving from an economy built on bedrock to one being built on quicksand. This post follows-up on that theme by discussing the complexity of delivering value in an economy built on quicksand.
the two drivers of value
There are two generally recognized drivers of value. One is when a person or organization creates value; and the other is when there is a demand for value. Though separate, these two go hand in hand while striving to satisfy people’s needs and motives. Together, they form the backbone for delivering value. But because they are separate, they also add complexity to the task of trying to consistently deliver value across time.
Let’s look at what has become a very common scenario.
A new innovation comes along and it fills a need or desire that people didn’t know they had before it became available. It creates value.
With the passing of time, the demand for that particular innovation may grow even though the value it delivers remains essentially the same. In this way, the created value gets transformed into a demand for value, which was the purpose for creating that value from the beginning.
Once that demand hits a critical mass, however, it motivates others to try offering a comparable product that claims to do an even better job of producing value fulfillment. Perhaps it will cost less while delivering the same benefits, or cost the same but deliver more benefits. Or maybe it costs more but also excels at delivering more. However it happens, it creates new value, spurs a shift in demand, and steals customers away from the original.
Then, possibly, an altogether new and alternative product emerges and it trumps the entire group of comparable products. It may even be disruptive enough to make them obsolete. So now the comparable group must either create new perceived value to reclaim their old competitive stance, or lose out as a consequence of the substitute product taking their place.
In other words, there’s the challenge of continually keeping pace with changing perceptions of what constitutes value over time. And to be sure, people are fickle, and markets are fickler.
Examples abound of course, but let’s briefly review just one.
How many people currently own a manual typewriter and use it daily?
The manual typewriter was a great invention in its time, but was later trumped by a comparable product that offered relief to otherwise weary fingers – namely, the electric typewriter. That was then followed by the wordprocessor, which offered still more functionality. And then the personal computer came along and it, well, it’s now become the runaway favorite — at least for the time being.
the quicksand analogy
This is where the quicksand analogy enters the scene, insofar as it refers to the rate of speed with which we have begun to rotate through these cycles of change.
It took nearly a century for the manual typewriter to lose popularity. Roughly thirty years for the word processor to replace the electric typewriter, and less than two decades for the pc to overtake the word processor. With each successive round of innovation, the product shelf-life got shorter. Just as importantly, this particular timeline coincides with the metaphorical shift from bedrock to quicksand when you consider that the economy changed its trajectory about same time the word processor came out.
Moreover, this innovation cycle is exceedingly slow by today’s standards. Imagine if we could somehow see the same timeline unfold in our now highly turbo-charged global economy. That would change it from evolutionary in character to revolutionary in character.
I’m guessing the manual typewriter would have lasted probably ten years, maybe three for the electric typewriter, and less than one for the word processor. As for the pc, the ceaseless eruption of new applications pretty much keeps it in perpetual flux (Not to mention it’s entirely conceivable the pc will soon be displaced by something else, given all the new devices that keep coming out).
ramifications for individuals and organizations
This trend imposes significant implications for individuals and organizations alike. Key among them is the notion that if you’re not moving forward, you’re moving backward. As a result, there’s a big onus on individuals to keep themselves marketable by constantly upgrading their current knowledge and skills; a good majority may even find it necessary to re-invent themselves several times over in the course of their adult working lives. For businesses, it entails the obligation to endlessly innovate in order to remain competitive. Staying nimble is incalculably important in this environment, because a lapse will always carry the risk of losing the ability to deliver value better than someone or something else.
And who knows where this ever-escalating race might yet lead? Will today’s hot algorithm become tomorrow’s quaint antiquity? Will you wake in the morning using software version 1.0, spend the better part of lunch installing version 3.21, and then 5.0 over dinner? Will your job skills be current during the appetizers and obsolete by dessert?
The bedrock you see in the rearview mirror is remnant of the industrial age. Up ahead — quicksand.
what to do?
The intent of this blog is to delve deeply into the question of what to do (or at least what to try) to stay marketable, whether as an individual or an organization. All future posts will be focused around that objective. Your contribution to that dialogue is more than welcome. Won’t you join in?