Barry Carter
What does the Sept 11 World Trade Center have to do with the new economy? Everything! For over 50 years now we have been creating the new economy for the Information Age. But as everyone working in companies knows, even with all of the progressive management programs of the past decades, something is still gravely wrong. The progressive programs fail one after another—quality circles, self-directed teams, gainsharing, empowerment, inverting the pyramid, virtual organizations, horizontal organizations, Total Quality Management, lean manufacturing, etc. This is because what is occurring with the new programs is the creation of an entirely new and very different kind of wealth creation system one small piece at a time. The programs fail within companies because we are trying pieces of the new economy one piece at a time when a whole systems approach is required.
What does this have to do with 911? Thus far into the Information Age our thinking is that the Information Age will merely be a linear extension of the Industrial Age. We think that the Industrial Age social institutions that have lasted for 200 years will also work for the Information Age–bureaucracy, democracy, schools, capitalism, socialism, nuclear family, money. The institutions for the Information Age and the new economy will be far different from the Industrial Age systems. The old economy, based upon bureaucracy, is a system of centralized wealth creation and is shaped like a huge pyramid with most of the wealth in the world being concentrated in the hands of a few people at the top. At the bottom of this pyramid are 30,000 children starving each day. All of the rest of us are some where in the middle. As we now transition to the Information Age we still rest on this rusty outdated Industrial Age system. This mismatch unleashes enormous powers in society that will continue to be destructive until will shift to Information Age systems.
Why is this? The primary power that propelled the Industrial Age was money. It took lots of dollar capital to create wealth or to influence people. It took big bucks to purchase lots of equipments, hire employees, lease building space, then mass produce and mass market products. It also took a lot of dollars to wage war, to defend or to destroy.
As we transition into the Information Age knowledge power is replacing dollar power as the primary power fueling civilization. Today and more so tomorrow it takes knowledge more than dollars to create or destroy wealth. What we saw on September 11 was a knowledge event. A hand full of people learned the knowledge to fly jets and demolish building and created this great destruction. In the Industrial Age entire countries have spent hundreds of billions of dollars to damage the United States as was done on September 11, 2001 and could not do it. In the Industrial Age they were unable to do what a hand full of people with knowledge power can now do in the Information Age. The problem is that great power that was once only available to and controlled by a few people at the top of the pyramid has now shifted to individuals and small groups including people at the bottom of the pyramid. However we still operate on the pyramid shaped wealth creation system as though nothing has changed.
Many people think that 911 is merely about the West verses Islam. We forget the Oklahoma City Bombing, the L.A. Riots and many other riots. We should not confuse symptoms with root causes. One root grows many blades of grass but we tend to want to see the blades of grass as having nothing to do with one another. The Industrial Age pyramid shaped wealth creation system is a competitive win/lose system that created hundreds of millions of losers. It has created classes of permanent losers over the past 500 years who stay at the bottom of the pyramid generation after generation. Many people are angry. Being of Native and African American decent I understand exactly where the people who bombed the world Trade Center are coming from. I am angry as hell, as well, as I look back over the losses of my ancestors over the past 500 years. Up until the pass few decades all of my family in the South lived in continuous terror. This is nothing new to us. My great uncle was lynched in the 1920´s in my hometown.
Today, as we transition into the Information Age, knowledge is giving angry losers, at the bottom of the pyramid, the power to cause many others higher up to lose with them. In simple terms the Knowledge Era unleashes too much power to individuals to continue operating on the win/lose Industrial Age foundation and the consequences will be staggering if we do.
What is the alternative? We must stop playing games with fad management programs and seriously begin using these concepts in a unified way to understand the new economy. We must seriously begin implementing the new wealth creation system within our organizations. We must have a broad vision of the new wealth creation system so that our actions are consistent with it. Our Industrial Age organizations are structured using bureaucracy and the division of labor. This is the same structure that the former Soviet Union operated upon. In fact all companies are miniature Soviet Unions. How many times have you heard a manager say, ìthis organization is not a democracy.” All bureaucracies operate as controlled economies where the wealth creation process internally is controlled.
Controlled economy based Miniature Soviet Unions are not the organizing structure for the Information Age. We are witnessing the end of bureaucracy as we enter the Information Age. Bureaucracy has been invincible for the past 500 years. Departments and bureaus of people in single buildings represents the greatest power the world has ever known and has been invincible. And yet we all watched in horror and complete disbelief as the symbolic invincibility and of bureaucracy ended as the World Trade Centers collapsed. The twin towers after all are built based upon compartmentalization just like bureaucracy. Those towers which represented the ultimate in bureaucratic power and were turned into dust by the knowledge power of a hand full of losers as we transition into the Information Age. This was not possible in the heart of the Industrial Age.
The organizing structure which toppled bureaucracy was a networked organization of localized teams. The worlds greatest symbolic presentation of bureaucracy was toppled by a small knowledge based teamnet of individuals who passionately believed in what they were doing. Networks of teams where people own the specific work being performed and are passionate about it are the structures of the Information Age. The irony of the Information Age is that individuals will be able to use the new organizing systems and knowledge power to create great wealth or great destruction– lose/lose or a win/win. However, our win/lose system of the Industrial Age based upon self-interest is dead!
The new organizing systems for the information age are destine to be win/win systems and are destine to shift us into a win/win world. However, if we fail to see this and if we continue to blindly operate our win/lose bureaucracy based system we will create a lose/lose hell beyond belief. 911 will seem like a mere scratch compared to what is too come. We have only to look at history to see the great destruction when people resist or ignore social change in periods such as this. As we transition out of the Agricultural Age to the Industrial Age we saw 600,000 people killed in the Civil War and an entire civilization destroyed. In France there was the French Revolution. In the Americas 9.6 million out of ten million Native Americans were killed. However, all of this destruction pails in comparison to what we are headed for today unless we change to Information Age systems.
Why is this? Because we all, nations, small groups and individuals have far more destructive power at our disposal today. In addition, today we are witnessing a great power shift in our world from bureaucracy and democracy to individuals. Each passing day more and more power shifts into the hands of every individual on the planet. Today a hand full of people with the right knowledge can bring the entire global economy to a grinding halt, with something as simply as 20 people dropping anthrax out of airplanes in the 20 largest United States cities. With tens of millions dead the United States economy would cease to operate and would likely crash the global economy. Within the coming decades we are faced with a situation where every person on the planet will have the capability to end life on earth whenever desired. What this tells us is that our 500 year old win/lose system in no longer an option. We cannot afford to have any people in the world losing because we will all lose.
Today we must have free markets within organizations. All of the fad programs of the past 20 years are free market systems that operate internal to organizations. They fail because they are at odds with the controlled economies that they are tried within and are tried piecemeal. Our aim with former Soviet countries has been to privatized the wealth creation systems within these countries. Today this must be our aim as bureaucracy dies worldwide. Companies must privatize the wealth creation process within their organizations if they are to survive and if we are to prevent the shift to a lose/lose era. Companies must become holding companies providing resources but having no control over the people creating the wealth.
We are witnessing the end of bureaucracy and just as the Soviet Union died so to will bureaucracy as the world’s primary organizing system. If we integrate all of the fad programs for the past 20 years we have a mass privatization system. This is a system where the individual owns the specific work performed and works in small self-directed teams interconnected with other small teams forming teamnets and entire organizations. Rather than working in bureaucracies in single buildings we will work in teamnets via the Internet and information technology. As we begin privatizing our economy we will see many of the root causes of our present crisis and most of our other social problems dissipate as we shift into a win/win world.
Barry Carter is the author of Infinite Wealth – A New World of Collaboration and Abundance in the Knowledge Era.