Harry S. Dent | Tuesday, January 22, 2013 >>
You know you’re getting old when some youngster asks you, “What did you do before cell phones?”
After cringing inwardly at the fact that I can remember I turn my attention to the fact that, unintentionally, that youngster has just asked a particularly astute question.
Most people simply take the latest innovations and technologies – like phones, electricity, cars, jet planes, computers, the Internet – for granted. These things just magically make our lives easier, more convenient and bring more communication, travel and life opportunities.
What most don’t see is HOW these technologies change the way we work and do business… HOW they create broader and longer-term advances in our standard of living.
Think about it now…
Electricity and smaller motors allowed the assembly line revolution in production.
We have Henry Ford to thank for the innovation that often made workers 10 times more productive (from 1914 onward).
Alfred Sloan at General Motors is responsible for the even broader, more decentralized revolution in business organization from the early 1920s forward. This was the other big driver of the new middle class that emerged from the Roaring 20s and then expanded mainstream after World War II (we’re talking the 1950s and ’60s here).
The fact of the matter is, everyday households owe their unprecedented standard of living more to Henry Ford and Alfred Sloan (among others) than even Alexander Graham Bell and Thomas Edison.
Sure Bell and Edison where the technological innovators, but more importantly, their technologies enabled changes in how we design and manage work and organizations… and that is where the greatest long-term payoffs come.
Fast forward to the late ’70s and early ’80s when Apple and Microsoft (and many others) launched the microcomputer and software for personal computing… These innovations revolutionized the way we communicate and conduct business. They will ultimately bring into existence a new Network Economy.
The Way of the Future
As the latest innovations and technology filter into the mass market, businesses will increasingly have the power to organize around the customer… to operate from the bottom up, not the top down.
Companies will be able to deliver real-time, personalized services at lower and lower costs.
Basically, what the upper class got in the last boom, the middle class will get in the next boom, making them upper middle class by past standards of living!
The businesses that embrace this new network economy will be the winners in the next difficult decade and in the next boom from the early 2020s forward.
The challenges of the downturn and debt deleveraging process – which is exactly what we face over this decade – will force more businesses to adopt the leading-edge business models, innovations and technologies.
Those companies that succeed in doing so will be the ones to survive and prosper in the years and decades ahead. Those businesses that cling to the older top-down model will die painfully.
This is the value of the Winter Economic Season… to not only clear out excessive debt and inefficiencies from the past, but to usher in the new revolution in business and work organization.
What will this new Network Economy look like?
Well that’s tough to say in detail but the big picture is clear to me…More people will be able to work from their homes (thanks to the Internet), which greatly helps our growing female workforce who face the constant balancing act of work and family responsibilities.
More people will be able to start their own businesses, often from their home.
More information will be delivered instantly to small front-line teams or people who can access back-line resources and vendors, or “servers,” allowing them to customize product and service solutions and deliver them in real-time. This will enable organizations to re-organize into front-line “browser” units that focus on the specialized needs of narrow segments of customers to deliver more personalized service.
In fact, my singular catch phrase of the new network economy is simple: “real-time, personalized service.”
Management will no longer be a top-down dictatorship. Instead it will become the very back-line designer of the networks, information and rules that are automated to make everything work without bureaucracy and time delays, kind of like running a free-market democracy.
But wait. This isn’t all futuristic imaginings. We have such an organization in our midst already…
The Network Organization of Today
Of course I’m talking about our stock exchanges.
Somebody runs up at 9:30AM, rings the bell and then gets the hell out of the way!
Investors drive the highly-automated and real-time system and prices go up and down in real time. Everyone can tell what they’ve made or lost in real time.
Then the bell is rung at 4:00PM and the system rests until the next morning.
Mark my words: this revolution is going to spread to all industries, just like the assembly line and decentralized top-down organization did from 1914 into the 1960s. Only this time it’s going to be bottoms-up and truly customer-focused. The more information-intensive industries will see this revolution first.
So if you want your company (be it your own or one you work for) to win the “survival of the fittest” challenge it faces this Winter Economic Season, start using cheaper and more accessible information to make smarter and more effective decisions on your front-line, not your back-lines.
That is the revolution for decades ahead! This revolution will both restore our middle class again and make it even more affluent.
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The ultimate goal of any market-timing investor is to get into sync with the natural rhythms of the market. Fortunately, there’s a popular analysis tool that helps them do just that (it’s a tool I like to use as well).