Of shoes and money …. and information

I’ve spent the best part of three decades immersed in large organisations: watching and observing them, working for them, working in them. With very few exceptions, I have found the following to be true of large organisations:

  • We stress the importance of human resources, human talent, human capital
  • We stress the importance of teamwork and collaboration
  • We stress the importance of openness and transparency
  • We stress the importance of trust

And then, mysteriously, we somehow manage to create an environment where we jealously guard information; where we seek to create and extend power as a result of this jealous guarding; where we then exploit this power in all kinds of ways, some less abhorrent than others (but all abhorrent, at least to me).

Given all the other values that are stressed, I’ve often wondered why this happens. And in a Sunday night frame of mind, I’d like to postulate one possible reason:

Let me try and explain it by using one of my favourite Peter Drucker quotations:

People make shoes, not money.

People aren’t interested in medical records, they’re interested in getting well, and staying well. People aren’t interested in bills and receipts, they’re interested in knowing that they did what they said they will do, or that they received what they expected to receive. People aren’t interested in financial statements, they’re interested in what they can do as a result of the security that income and savings and insurance and pensions. People aren’t interested in TV or radio schedules, they’re interested in watching things and listening to things. People aren’t interested in share prices and market movements, they’re interested in the things they can do as a result of performing their jobs well. It’s not the information that matters, but what we can do as a result.

People make shoes, not money.

Of course information has value in the sense that it lets you do things as a result of your having information. And not do things as a result of your not having information. But this value is not something we can impute to information per se.

It’s a bit like saying a car key has value by itself. Sure, it lets you drive the car. And if you didn’t have the key then driving the car becomes somewhat more difficult.

But by itself it’s nothing. It’s just a key.

Take a television schedule. Not much use without something to watch television with (even if it’s a Mac rather than a telly). Or take a telephone directory, not much use unless you have a telephone (even if it is a camera or game console pretending to be a phone).

[This is also why IT systems by themselves have no value; value is derived from adoption, from usage. If we don’t understand this, we’ll never answer the age-old question of the “business value of IT”].

I know I’m making a big deal out of this, but there’s a reason. Humour me on this.

Once we impute value to information, we create a reason for people to have secrets. To hide things.

And then it’s a downward spiral. Does it make sense to hide things from your customer? Does it make sense to have asymmetric information within the firm? Once we start acting as if information has value by and of itself, it is only a matter of time before people start using this information to gain personal advantage within the firm.

And once this happens, we can forget about all the nice things we say organisations stand for: openness, transparency, teamwork, collaboration, respect for the individual. Trust. We can forget about all of it, because we allow the very basis of this to be corrupted.

Take a completely different perspective on all this. Privacy. Why does someone worry about who has access to his medical records? Not because the records themselves have value. But because someone can misuse them. Because, for example, someone can refuse to insure, or raise premiums for, some hitherto undeclared medical condition. Or even worse, for some future projected medical condition, projected as a result of discovered habits.

It’s not about the information, it’s about what you do with it.

When we had no language, we may have had information, but I wouldn’t know how we knew that we had information.

Once we had oral language, we had information. Much of it was passed from generation to generation without fear or favour. Then, somewhere along the line, people figured out that hoarding information gave them some form of power. And out of that came caste systems and class systems. And a few wars.

It was all about power. Not value.

When we moved from oral to written language, we still had information. But now we could store some of it, and share some of it. But people figured out, if only there was a way to control who could read and write, then the power would remain.

Along came the printing press. Same story. If only there was a way to control who could print and distribute, the power would remain.

Minor skirmishes have been fought on this topic for the last 150 years or so, covering the post and telegraph, radio, film, television, vinyl, tapes, CDs, the lot. If only we could control the copying process and the distribution process, the power would remain.

Well, the genie’s out of the bottle. The horse has bolted. Choose your cliche. Because that’s all there is, cliche.

As reproduction, transmission and storage costs continue their drive towards zero, it’s going to get even worse. Information is an extreme nonrival good, needing artificial intervention to sustain its value. And every artificial scarcity will be met with an artificial abundance. Piracy. Cracking. Whatever you want to call it.

Ideas are free, and will continue to be free. So will information. Or, as Doc Searls keeps reminding me, in the words of our mutual friend Don Marti, information wants to be $5.99.

Information will continue to have value, but that value will tend towards the cost of collecting, processing, storing and retrieving that information. And while there is a cost, the price may still be zero, as ways are found to defray the cost with attention in one form or another.

There is something magical happening. We’ve had language for a very long time. We’ve had the capacity to read and write for a very long time. The costs of reproduction and transmission and storage have dropped remarkably, and that changes many things.

But there is a bigger change. A change brought about by the digital world. Now we can archive and retrieve information, search and find it. This has never happened before. And it is huge.

So.

Information is changing. And it is becoming more valuable to us all by becoming less valuable to any one of us.

Let us bear that in mind as we move on. We should concentrate on providing good service and good product, concentrate on providing that service honestly and diligently. And the money will flow. Not by hoarding information, but by freeing it up. Collaborating with each other, within the firm, with our customers, with our partners, with our markets. Even with our competitors. [Actually we do that already, but in a closed way. It’s called a cartel.]

[Incidentally, the working title for this post was one possible response to the question “but how do we make money if we don’t hoard information?”…..monetise this! But it sounded rude and so I dropped it.]

10 thoughts on “Of shoes and money …. and information”

  1. this is off-topic but I couldn’t find any other way of asking – how do I subscribe to your feeds?

    Really like the new elegant, neat look of your blog but the RSS feeds subscription from your previous avtar shows error and I’m unable to figure out how to re-subscribe!

    Thanks.

    P.S. I love your posts and how they unravel the influence of technology on our behaviour, thought patterns, interactions.

  2. C.S. Lewis once wrote, “Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience.”
    This is how I feel that people try to use information (power) in the world today. They try to say that how they handle their business is for the betterment of the company, country, etc. Just a thought.

  3. You prove once again, JP, that some people deserve more than one weekend per week.

    But please clarify for me. Are you saying that this process will directly de-couple power and information? Does power now accrue around the sharing of information?

    Also, digging the new theme.

    PS. Search Maeda on this blog for a long ago comment with a link to the RISD blog where he posts. Of my resources, he’s the “you” of design.

  4. The valuable commodity now is understanding/ wisdom, isn’t it? Everyone wants it because people will pay for it. Takes time and effort to acquire, even on a small scale (eg how to blog for your business). Originally, only the wise had access to information. Now we all do, but our wisdom still has a way to go to catch up (in many cases)! But good wise people have always given information away for free to genuine seekers.

  5. Its an interesting theme. The change in behaviour outside the organisation to use search as the predominant way of getting information rather than the paper generation model of file and retreive my own information hasnt yet caught on in organisations. Im sure it will change in time but quite slowly. Information is still believed to give power in many organisations and lots of people are still actively rewarded for not sharing.

    A couple of examples. As a salesperson, are my customer relationships mine or the company’s? The former benefits me the latter the company but takes away some of my (perceived) value. As an IT system owner do I make information in my system available to everyone freely though search or do I keep it closed to “drive usage”? Unless there is a culture of sharing already, its sometimes hard to do the right thing if there is personal benefit in not sharing (real or perceived).

    I see this only changing by 2 mechanisms. The most powerful is your new employees who grew up with search approach to accessing information to whom the old paper-age way doesn’t make sense. The other mechanism could be by a benevolent dictator in the organisation re-aligning the reward structure to eliminate the conflict.

    Until then, many of us will be frustrated and impatient for the rules to change in our day jobs…

Let me know what you think