Infinite Wealth is an important book by Barry Carter. It is available at the author’s website, and can be purchased in bookstores everywhere including Amazon and Barnes & Nobel. You can read Reason Wilken’s Review of Infinite Wealth or simply sample the first chapter that follows. There is also an abbreviated free online version, which has been reposted here at Future Positive: 1) The Rise of a Win Win Civilization 2) A Personal Journey of Discovery 3) Why Corporations Don’t Work 4) The Emancipation of Capitalism 5) Mass Privatization: Organizing in the Information Age 6) Decentralized Wealth Creation 7) The Infinite Wealth Potential of Liberated Humans The Mandate for Win-Win Wealth Creation 9) Breakpoint: Why You Must Act Now 10) SYNOCRACY: True Democracy Through Synergy 11) THE SHIFT: Awaking to a Win-Win World 12) The Synthesis of a Win-Win World and 13)Vision for a Synergic Transition. Also see: Advanced Papers by Barry Carter
The Chinese word for crisis is written by joining two ideograms together. When these ideograms, are presented separately they stand for danger and opportunity. To overcome crisis, you must successfully seize the opportunity and avoid the danger. Our human society is in crisis and we must soon seize the opportunity to begin working together. Barry Carter helps us see the shape of that opportunity. This is the first chapter from his book Infinite Wealth.
Infinite Wealth is an important book by Barry Carter. It is available at the author’s website, and can be purchased in bookstores everywhere including Amazon and Barnes & Nobel. You can read Reason Wilken’s Review of Infinite Wealth or simply sample the first chapter that follows.
There is also an abbreviated free online version, which has been reposted here at Future Positive: 1) The Rise of a Win Win Civilization 2) A Personal Journey of Discovery 3) Why Corporations Don’t Work 4) The Emancipation of Capitalism 5) Mass Privatization: Organizing in the Information Age 6) Decentralized Wealth Creation 7) The Infinite Wealth Potential of Liberated Humans The Mandate for Win-Win Wealth Creation 9) Breakpoint: Why You Must Act Now 10) SYNOCRACY: True Democracy Through Synergy 11) THE SHIFT: Awaking to a Win-Win World 12) The Synthesis of a Win-Win World and 13)Vision for a Synergic Transition.
Also see: Advanced Papers by Barry Carter
A new civilization is emerging in our lives, and blind men everywhere are trying to suppress it. —Alvin Toffler
The Rise of a Win Win Civilization
Imagine working in an organization where you love your work as much as your favorite hobby. Work is fun, exhilarating and challenging. Imagine being eager to wake up each morning to get to work. Your work makes you feel that you are making a difference in the world. It connects you with a deeper meaning in life.
Within your organization you work in a small team—a collaborative partnership where you are connected with partners on a personal level. Your team is interconnected with and interdependent upon other small teams, forming business units and a massive global networked organization, all through the Information Superhighway. All members of your team and organization are as passionate and devoted to their work as you are.
Imagine a customer-focused system where the more one genuinely cares for others the more financial success one has. Teams and individuals excel financially by understanding and being tightly focused on meeting other people’s needs—customers and partners. It is an environment where you directly receive a percentage of income based upon the value you add for customers and partners. The more value you add the more income you receive. In addition, the more value your small team and other small teams add the more income you receive.
It is a system based upon alignment. The better you are at meeting customer needs and helping others win, the more income you directly make for yourself. People, therefore, do the “right thing” because they work in aligned organizing structures where helping others, partners, potential partners, suppliers and customers, is in their direct best interest.
Imagine a society made up of thousands of these organizations or communities all interconnected through the Information Superhighway with the shared purpose of helping other people. The communities are overlapped and chaotically interconnected and intertwined forming a seamless, ordered and interdependent global society. Individuals act locally while thinking globally. Every individual on the planet is directly or indirectly interconnected electronically, financially and socially to every other individual.
Imagine a world of six billion liberated, interconnected individuals who are extremely creative, challenged and productive. Teams routinely taps near genius levels of creative potential. These ideas are readily passed on to thousands of other partners, because it helps the individual, all partners, customers and the organization all win. Organizations, therefore, are structured to liberate and propagate knowledge and wealth flow as opposed to controlling or monopolizing those things.
Imagine a knowledge era where the premier power and creator of wealth in society is knowledge—an infinite resource, one that can be used by many people at the same time with everyone winning. Thus it is a civilization void of oppression because the means of production is widely dispersed and controlled by the masses of individuals in society. This is because individuals own the brains that produce the knowledge.
Imagine a customer driven world where each product or service is tailor-made to fit each customer’s exact, unique needs. It is, therefore, a world where tremendous empathy towards other diverse individuals is the key to meeting customer’s needs and thus thriving financially. In this New World racial division, therefore, has all but disappeared because people thrive economically when they understand, empathize and work with diverse people. The more diversity there is, the more wealth.
Imagine that your work puts you in contact with many diverse people from around the world on a daily basis—partners, potential partners, suppliers and customers. Potential partners routinely approach you on various ventures. Likewise, organizations and teams continually seek new partners and ventures because this is how they grow and produce more income for themselves. One works by connecting with others on the Information Superhighway and finding niches where one can add value, for customers and partners, by adding on to what an existing team is already doing. This is done with minimal risk for all. Because everyone has immediate access to unlimited opportunity and income potential we live in a world where poverty and scarcity have all but disappeared. In fact, we live in a world where the vast majority of the world’s population is wealthy, both materially and non-materially.
As astonishing as it sounds, directly before our eyes we are shifting to this New World as we enter “The Third Millennium.” What we are seeing is a shift at the very foundation of our civilization—wealth-creation and work. For all of human history the powerful forces of wealth-creation (the meeting of our daily practical needs) have driven people apart—to compete for scarce resources, to control the wealth-creation process, to only see from our own narrow perspectives and, therefore, to remain immature. Today, however, the powerful forces of wealth-creation are driving people towards helping one another, meeting others’ needs, interconnecting and becoming interdependent. We are moving towards a deeper understanding of who we are and towards a higher level of maturation.
Wealth-creation and work are changing so fundamentally as to reorder civilization and replace tens of thousands of years of human social norms. Infinite wealth is replacing finite wealth. Win/lose social norms are giving way to win/win norms. A paradigm of abundance is abolishing the illusion of scarcity. Collaboration is beating out competition. Human interconnectedness is revealing the illusion of human separation. Empowered masses are overcoming powerlessness. Interdependence is transforming unhealthy dependencies. At the core this is a shift from fear to love. It is the most significant change in all of human history and the beginning of the height of the human journey. It is a shift to a win/win world based upon caring and abundance, driven by information technology and changes in our wealth-creation system.
The creation of this New World, which has already begun, will likely be the most enjoyable part of your life. Out of tens of thousands of years you have the privilege of being alive in what we will soon know as the most exciting time in human history, a time of human awakening.
Regardless of who you are, you have tremendous opportunity in the immediate years ahead. We are entering a period where you and your family will have the opportunity to learn and grow significantly; attain substantial material and non-material wealth while contributing enormously to a sustainable society. You will have the chance to experience the world, and meet many new and diverse people.
Alvin Toffler in The Third Wave breaks history into three eras; the Agricultural Age, the Industrial Age and the Information Age. As we transition from one era to another, history has shown that all of our social institutions are replaced. It has also shown that these eras come in with a bang, defined as breakpoints (Land, Jarman 1992). With breakpoints, trends and pressures build for years and decades but with little substantive change. People become convinced that nothing is changing—“its all talk.” The old institutions become gridlocked and ineffective as citizens lose confidence and become increasingly frustrated, angry and disillusioned. Then, all at once there is social breakpoint and all of society is thrust into the new era when the old social institutions begin to be replaced.
We saw breakpoint in the transition from the Agricultural Age to the Industrial Age in the United States with the American Revolution. In Russia there was the Russian Revolution and in France the French Revolution. Globally in all of what would become the industrialized world, we transitioned from monarchy to representative government. We globally saw the abandonment of serfdom and slavery and the shift to employment as our system of work. One piece “made-to-fit” customization gave way to mass production as our system of production. Formal religion gave way to Newtonian science as the science of the era. The extended family was replaced by the nuclear family as our family structure.
All around the world in what would become the industrialized nations, all of the Agricultural Age social institutions were not merely changed, they were systemically replaced.
Today, we see the same transition as we shift from the Industrial Age to the Information Age. In work and business we are transitioning from employees to owning partners, from bureaucracies to virtual networks of teams and from controlled economies (organizations of employees controlled by bureaucrats) to free market economies of real internal customers and suppliers within organizations. At the same time we are shifting from mass production, which thrives on homogeneity, control and stability to mass customization, which thrives on diversity, freedom and chaos. In science we are shifting from the mechanical, analytical Newtonian worldview, to the new synthesis-based sciences of chaos theory, complexity and quantum physics.
In regards to social power we are seeing a shift from the masses of people being passive cogs in an Industrial Age machine controlled by managers and politicians to people being fully empowered as proactive owners, responsible for and in control of their work and lives. Relative to social organization we are literally witnessing the death of representative democracy as we all daily participate in the creation of new, more liberating and collaborative form of democracy based upon synergy. The new system is moving us beyond the limits of taxes, politicians and bureaucracies. It is a system of synergy where order in society comes as a natural by-product of our system of work. Social order is produced as individuals and organizations work to meet each other’s needs as interconnected and interdependent owners, partners, customers and suppliers.
We are witnessing the end of representative democracy, companies, the nuclear family, employment, managers, unions and far more as the norms in society. Sound implausible? Sure, however, think of a French aristocrat in 1780. Imagine trying to explain that every institution in his agrarian civilization, which had existed for hundreds of years, would be replaced. There would be no more serfs, monarchy, aristocrats or extended families as the norms and power structures in society. It would be overwhelming and unbelievable. He would have a hard time even imagining a world operating without those age-old institutions. However, it did happen and today it is again happening.
What I wish to demonstrate in the following pages is that the new civilization and world view is already easing its way into our lives and the successful trends burgeoning onto the world scene exhibit traits conducive to it. I am not proposing a Utopia for you to “sign up to” and attempt to live by and I am not proposing any socially engineered solutions or political dogma. What I am doing is showing you a perspective which will allow you to see what is already coming at you with lightning speed, inundating you with opportunities. But you must see these opportunities or they will fly right past you. I want you to see them, use them and thereby prosper with this New World.
As we enter the Information Age, a shift has occurred in work and wealth-creation which propels all of the other changes. We have, for millennia, lived in a world in which the creation of things is what has generated wealth. But now, the creation of knowledge is the primary generator of affluence and this is changing our world and world view forever.
Today, the vast majority of value added to human lives no longer comes through tangible things. It comes through knowledge, ideas, intellect and brainpower. Even with tangible things, the knowledge content far outweighs the value of the physical thing. For example, for the $500 one paid for a 200 megahertz 586 Pentium microprocessor in 1997, the knowledge content far outweighs the handful of sand from which it is made. Likely only a fraction of a penny of the $500 goes towards the cost of the sand. This has not always been the case. A typical product in the Industrial Age had a very large percentage of its value in the material good itself. Coal, as an extreme case, had nearly its full value as it was taken from the ground. In the Industrial Age, the people who owned the raw materials and processing facilities for oil, coal, steel, etc., were the world’s wealthiest people. Today, however, we do not see great fortunes being made with sand mines. Instead the people who control the knowledge control the wealth.
An example of this transition can be seen with a comparison between IBM and Microsoft. IBM for decades was the premiere corporation in the world. Many people considered it the world’s best company to work for. Consultants rated it the world’s best-managed company. For years it reigned as the most profitable corporation in the world. Though IBM led us into the information revolution, its profit and growth had come from the manufacture of computers and other hardware—material goods, things.
In the late 1970’s, at the beginning of the personal computer revolution, IBM contracted with a fledgling corporation called Microsoft. Microsoft produced the software operating system for the IBM PC, while IBM focused on the “important” stuff—the hardware. Yet, by 1992, in a little over a decade, the stock market value of Microsoft had surpassed that of IBM. Microsoft had also replaced IBM as the leader of the information revolution. IBM had billions invested in hardware, factories, buildings, machinery, and equipment. It had 400,000 employees, decades of experience and history. Microsoft, on the other hand, had only 11,000 brains, producing only thoughts, ideas and knowledge.
Another example of the knowledge power shift can be seen in the value of companies. Throughout the past couple of hundred years, in the Industrial Age, hard assets have determined the value of a company. Today, however, when companies buy other companies they routinely pay far more than the value of the hard assets. For example, in 1988 when Philip Morris bought Kraft for $12.9 billion, the hard assets of Kraft were only $1.3 billion as determined by Philip Morris’s accountants. The other $11.6 was all knowledge value—brand equity, ideas in employees’ heads, market prowess. (Peters, 1992, p. 657.)
The transition to knowledge power is unleashing several unstoppable forces in work and wealth-creation, which are changing our world forever, including all of our social institutions. These three are the building blocks for a win/win wealth-creation system:
1) A shift from finite wealth, which operates on win/lose rules, to infinite wealth which has the potential to operate on a win/win norm.
2) A shift from an competitive, seller controlled society to a collaborative, buyer driven society.
3) A shift from a marketplace dominated by employment to one where individuals own the specific work they perform and are compensated directly by customers for the value they add.
In the Industrial Age, the power that propelled wealth-creation and society was dollar wealth. It took lots of dollars to finance the equipment, facilities and employees to make money. In the Agricultural Age violence and brute force powered civilization (Toffler, 1990). There is a fundamental difference between the power of violence and the power of money versus the power of knowledge. Violence and dollar power are finite, whereas knowledge is infinite. This means that for the first time in history we are shifting to an era of infinite wealth!
When we consider the microprocessor, we humans have taken a small amount of physical resource and amplified its value perhaps 50,000 to a million times. We have produced, in effect, unlimited wealth through knowledge power and intellect. And when we benchmark using the cost and performance of the first computers or even computers 20 to 30 years ago, compared to the cost and performance of today’s computers, we have perhaps amplified the value of the sand by as much as one billion times. Through the power of knowledge and intellect we have created something with greater value, per ounce, than gold (Pilzer, 1990). The alchemist’s dream is at last achieved!
However, the most striking trait of infinite knowledge power is that it can be leveraged across many people so that they all win at the same time and from the same idea. For example, one gun (representing violence power) or one dollar (representing dollar power) is finite and can only be used by one person at a time. For that reason, in the past, one had strong motivation to tightly hold onto whatever power (money and guns) one had, and not to share it with anyone (Toffler, 1990). We, therefore, had competition over finite wealth. Thus, the two primary powers that have propelled civilization throughout all of human history have motivated us to create adversarial win/lose, competitive wealth-creation systems.
The power of knowledge, however, is such that one idea can be used simultaneously by fifty or five hundred or five hundred million people. All of these individuals can win, and because of synergy, they can win more individually by sharing knowledge than by not sharing it. Instead of competing over finite wealth we can collaborate to create infinite wealth where everyone wins. Stephen Covey, Marianne Williamson, Tom Peters, Scott Peck share their ideas in books and millions of people use their ideas and win with more growth, increased wealth and happiness, while these authors win millions for themselves.
Rich Devos and Jay Van Andel, the two co-founders of Amway, developed a system where partners win by collaborating and sharing their knowledge and successes with others partners. The result is an organization that has created more millionaires than any other organization in history. For their part, in 1994, the two billionaires, Devos and Van Andel, were the fifth and sixth wealthiest people in the United States.
Bill Gates, Microsoft founder and CEO, established an employee stock ownership program (ESOP) at Microsoft; a pure knowledge business containing no tangible product. Gates shares the wealth opportunity with Microsoft employees and encourages knowledge sharing and collaboration within Microsoft, producing thousands of millionaires. In 1994, 33% of Gates’ 11,000 employees were millionaires, with two being billionaires. In 1995, Paul Allen of Microsoft ranked as the fourth wealthiest person in the world with 5.3 billion, while Steven Ballmer ranked 13th.
Gates helped other people win by sharing ownership and wealth opportunity in a knowledge business and thus won for himself. He has been the wealthiest person in the world for much of the 1990’s. In 1997 he was worth over $36 billion—ranking as the wealthiest person in history. Unlike guns and dollars Gates is dealing with knowledge—a power derived within individual’s brains. Because of the infinite capacity of knowledge power Gates wins more by creating a win/win system where the wealth-creation opportunity and knowledge are shared. In the heart of the Industrial Age and the Agricultural Age one never found this type of wealth sharing, because “thing”-based power and wealth was finite.
Larry Ellison, CEO of Oracle, another multi-billion dollar software producer, has helped create hundreds of millionaires through his Oracle ESOP. Because of his wealth sharing initiative he was the 20th wealthiest person in the United States in 1995. In a sort of cascading effect, some of the millionaires he helped create have gone out and started their own companies and ESOP is creating a list of their own millionaires. For example, in 1993 Tom Siebel, one of Oracle’s employee millionaires, went out and started his own company, Siebel Systems Inc., creating 40 millionaires in three years.
In company after company we here of teams, teamwork, collaboration, partnering, learning organizations and far more. We here of collaboration between competitors, with suppliers and customers, with employees and unions. As we transition from competition to collaboration we see books appearing with titles such as Co-opetition. Collaborating to Compete and The Death of Competition. In the Win/Win Era of infinite wealth the more we help others win the more wealth we create for ourselves.
During all those millennia while the manufacture of things was central, we lived in a seller-controlled society. Henry Ford arrogantly bragged that we customers could have a car any color we wanted as long as it was black. We were happy to buy his black cars because it was a whole lot better than walking or riding a mule. Managers, executives, bureaucrats and CEO’s were the sellers and they dictated what buyers would get, when and at what price. The seller was king and the one to be served by society, not the buyer.
In the seller’s era of Ford’s day, both the end-user consumers and the workers served the company’s and society’s managing elite. It was a period where the managers and executives were elevated in social, financial and political status, education and power. Their needs were met better than those of the common buyers and workers in society, who, after all, were (and still are) the same people—the masses. Being in the privileged position of seller was the ultimate position in society, as reflected in the nearly universal desire to climb the “corporate ladder.” If the customer is defined as the one to be served, then the “social customer” during the seller’s era has been the managing elite.
Bureaucrats used mass production and mass marketing “push” systems to push products onto what were interchangeable customers. For example, my wife and I recently endured a high pressure pool salesman who spent three hours selling us on a $12,000 above ground swimming pool, for which we told him outright we had no interest. We continually tried to define our needs only to hear at the end, “Well, it’s a numbers game. I pitch the same to everybody and a percentage will buy.” In the “sales era” the seller’s job was to convince you that you needed some product, regardless of whether you needed it or not. The measurements used by management to track success were internally driven measurements having little to do with customers. In fact, many things were done to hurt customers in order to make the bureaucracy’s month-end quotas. For example, in push mass production systems pre-built “batched” inventory must move regardless of customer needs. You may need “x” but we have “y” in stock, so this is what we will try and convince you that you need.
Today, the marketplace is reaching a breakpoint where the buyer is becoming the one to be served. Consumers have more choices each year spawned by knowledge power and technology. For example, in 1980, there were 2,689 new grocery and drug store products introduced. By 1991, this number rose to 16,143 (Peters, 1992). There are many suppliers globally seeking to meet any need we have; vying for our dollars, courting us, wooing us, bending over backwards for us, trying to anticipate our needs, thinking from our point of view. It’s as if they are actually caring for us. We are shifting from a “sales era” to a “service era” (Williamson, 1992) where the seller’s job is to empathize, understand, anticipate and meet the buyer’s specific, individual needs.
We are shifting from the bureaucrat driven push system of mass production, to the customer driven pull system of Mass Customization (Toffler 1980, Davis 1987, Pine 1992). Suppliers, such as Motorola, while still mass-producing pagers, tailor make each one to meet specific customer needs. They pull from 29 million variations of pagers and produce the exact pager you desire within minutes of receiving your order (Pine, 1993). At Levi’s Personal Pair an individual’s personal measurements are electronically sent to the factory. Tailored jeans are then produced from 10,000 combinations of sizes (Peppers, Rogers, 1997). The notion of “careless” batches of thousands of products being pushed onto customers is being replaced with one customized product at a time being “carefully” pulled by customers to match their exact needs.
Through cellular manufacturing, entire “push” factories are being broken into dozens of customer driven, mass customization-based “pull” mini factories called manufacturing cells. Formerly these factories “batch processed” or mass-produced, then mass marketed thousands of identical products and “pushed” them onto the public. At Milwaukee Electric Tool in Milwaukee, Wisconsin, liberated self-directed teams of individuals work in cells without supervision, pulling product one piece at a time to meet a customer’s specific needs. Other organizations have combined customer-focused cells with self-directed teams, team incentive systems and profit centers to produce, in essence, nimble customer-focused businesses within businesses.
In school systems such as Snow Hill Primary in North Carolina, learning is tailored to each individual student’s unique intelligence, using child-centered learning based upon Howard Gardner’s Multiple Intelligence (1993 p8). Snow Hill has moved from the “factory school” with rows of desks and all students hearing the same boring mass-produced lecture, regardless of their needs or special gifts. Led by people like Paul Browning and Gail Edmonson, they have moved from pushing rigid education on children through discipline and control, to a system of caring and love, where children pull learning at their own pace, because they are passionately engaged and having fun learning.
The global quality and customer-focused movements of the 1980’s and 1990’s were just the beginnings of a shift to caring for others. Just as those like Gates, Ellison, Siebel and Devos are winning by helping others win, by sharing wealth-creation opportunity and knowledge, others are winning big by helping us move into a buyer-driven society.
Tom Peters in 1984 published In Search of Excellence, sharing his ideas, igniting the customer-focused movement and allowing billions of people globally to win, while making millions for him. The book stands as the largest-selling business book in history with over 4.0 million books sold in ten years. In 1996 Peters commanded $80,000 per day to share his ideas with an audience.
Those like Sam Walton of Wal-Mart have won big by helping buyer’s win with low prices, high quality and good customer service. For years, he reigned as the wealthiest person in the world. Even after splitting his fortune with his children, combined they still held the world’s top slot with $23,450 billion in 1995. The billionaire Nordstrom family, with their retail stores famous for customer service, ranked among America’s top wealthiest people.
The global quality movement is also part of the shift to a customer-driven world. Edward Deming sparked this movement using knowledge power as he taught the Japanese statistical quality concepts in the 1950’s. We saw the full impact in the 1970’s when Japan’s superior quality in the automotive industry nearly put some of the big three out of business and eroded market share permanently. We also saw it in the electronics industry where today there are few, if any, American manufacturers of televisions, VCR’s, video cameras, etc. In 1995 we saw those like the Milliken family of Milliken Textiles and Marriott family of Marriott Hotels, both famous for quality and service, in the Forbes list of America’s wealthiest billionaires.
During the Industrial “things” era there was a division between “ownership” and work, with employment being the primary means of working and creating wealth. Whether in socialist or capitalist countries the worker, as employee, is void of direct ownership of the specific work he or she performs. Part of the shift to a win/win world and a customer-driven society involves the liberation of workers from the bonds of the controlling bureaucracy and managing elite, to become real owners of the specific work they perform. With the real value for customers now coming from knowledge and knowledge coming from the brains in people’s heads, we are evolving to a point where the individual, by default, owns the means of production. Toffler says, “Today the most powerful wealth-amplifying tools are the symbols inside workers’ heads. Workers, therefore, own a critical, often irreplaceable, share of the means of production.” In an economic environment where wealth comes from brains, it is only natural and more effective for organizations to evolve into systems in which individuals actually own the specific work they perform.
The combination of knowledge-based wealth-creation and employment-based work simply are not compatible. In the Industrial Age, people making and moving things created wealth. Wealth-creation could be tracked and, therefore, controlled easily. Motivation through regulation, supervision, and punishment could increase the number of tangible things one produced. Employment-based work was, therefore, feasible. Today the company attempts to own the thoughts in the worker’s heads, but how can a person’s thoughts truly be controlled?
The trends towards personal ownership and liberation of work are apparent in the innovations of organizations globally with variable compensation systems, empowerment programs and much more. What we are witnessing is no less than the mass privatization of work—a privatization of wealth-creation on a much more profound and elemental level than traditional capitalism has ever embraced. It is a shift to each individual owning his individual work and having the freedom to work as desired to meet other people’s needs. In fact, we are moving towards a new wealth-creation institution, the Mass Privatization enterprise, which is replacing the company and bureaucracy as the primary wealth-creation institution in society.
Mass Privatization is a system of human organization where the individual worker, or a small team of workers, own the substantial share of the specific work performed. Individuals are interconnected through advanced information technology. They are also interdependent through partnerships with other individuals, organizations or teams of private owning partners. The organization is structured so those individuals win when they help others win. It is a system with no managers, employees, unions, salaries, wages, bureaucracy or hierarchy. (defined in more detail later)
To end our deficits, the person who controls wealth-creation must also own the thoughts. This will be the individual, and the system must come through private work. This work must be connected for leverage and synergy; hence Mass Privatization. With Mass Privatization there is natural alignment between ownership and the means of production, since the person who owns and controls the thoughts also owns and controls wealth-creation.
Most companies have today implemented some form of variable compensation system and/or empowerment program. With variable compensation, an individual’s compensation varies, based upon the value he or she adds. Just like a business owner, the worker’s compensation varies from day to day or week to week or month to month. The individual is in effect getting some percentage of the wealth she creates and therefore has some privatized or personal ownership in her work. With variable compensation, organizations hope to approximate some of the incentives and pride found in owning one’s own business.
The road to the privatization of work has a long history, as will be defined in more detail later. Starting near the middle of this history we see employee stock ownership arising; a system in which employees own shares in the company. It has progressed to include profit sharing, where employees receive a percentage of the total company profits, as well as bonus programs where employees receive a bonus based upon some criteria. There is also gainsharing, in which a group within a company receives a percentage of the gains made by their specific unit. With at-risk pay, an employee is guaranteed only a portion of her previous salary or wage, but will be entitled to perhaps substantial additional income based upon the profits generated by his team or local group. With employee product royalties an employee receives a royalty on each sale of a product or service that she helped create. These are only a few out of many private ownership programs being tried in organizations globally.
Lincoln Electric, a 100-year-old manufacturer of welding equipment, uses a form of private ownership. At Lincoln, a worker’s income reflects directly the amount of work performed, quality produced and value added. In 1991, the average production worker’s income was about $50,000 (compared to less than $20,000 for most production workers). Lincoln sees its workers as a collection of entrepreneurs, where the more the individual wins, the more the company wins. Located in Cleveland, Ohio, the rust belt of the United States, it has flourished where others have dropped by the wayside.
Nucor Steel has a similar personal ownership system, with the average production worker in 1996 earning $53,000. Nucor has grown from a $20 million company in 1970 to a two-billion-dollar company by the early 1990’s, largely due to its personal ownership-based pay system. This occurred as the Japanese put many United States steel manufacturers out of business due to their ineffective operations.
Amway is another example of this trend. It is an organization that sells products relatively similar to those available in retail stores. Individuals personally own their one-person dealership, and are exponentially rewarded for any growth they can create for the company in selling their products. As stated earlier it has created more millionaires than any other company in history.
To further show that economic success is moving towards private ownership of work and away from managerial hierarchies, consider the following facts. In the early 1990’s, on any given day, 8,000 people moved into self-employment. During the same period, on any given day, 250 managers and 1,500 employees lost their jobs! In 1994, the fastest growing segment of the economy was the one-person enterprise.
Along with private ownership systems, most companies have implemented some form of worker empowerment or human liberation system such as self-directed teams. These are teams void of supervision. At the heart of any democratic country there is a degree of freedom and liberty supported by the right of ownership. Like countries, as organizations move towards democracy, they also are moving towards more individual liberty and freedom of workers supported by the individual’s right of ownership.
Billionaire Ross Perot founded and built EDS based upon empowered and liberated knowledge-based project teams. At EDS, the project team has replaced the bureaucratic structure. In return, Perot is one of the wealthiest billionaires in the country. At Johnsonville Foods, self-managing teams, combined with a variable pay profit sharing system have helped the organization grow from a $7 million company in 1981 to $130 million by 1991 (Peters, 1992).
As can be seen with the examples of Devos, Andel, Perot, Nucor and the others, we are shifting to an era where in order to thrive economically we must care for and help other people win. The more people we are able to help, the wealthier we become ourselves, both materially and non-materially. We must also consider that 46% of the United States’ 129 wealthiest people in 1995, whose fortunes were acquired through their work and not inheritance, did so in knowledge-based businesses or through privatized work or from a commitment to customers.
The cases listed above are not isolated incidents. They are part of a rapidly growing trend. Intel in 1996 paid out $620 million in profit sharing to 40,000 employees. Mary Kay Ash, is CEO of Mary Kay Cosmetics, a multi-billion dollar cosmetics company which offers private work opportunity to women. In her book Mary Kay, You Can Have it All, she says her highest goal is helping women everywhere achieve their full potential.
Tom Melohn, CEO of North American Tool and Die, says in The New Partnership, “If you reach out and genuinely care for your fellow employees, there is no limit to what you can accomplish.” After buying NATD, Melohn radically changed operations, making honesty, trust, respect and caring core values of the company, basing this on the assumption that people want to do a good job. Although NATD was in trouble when Melohn purchased it, within 12 years NATD’s pre-tax earnings increased 2400%. The return on investment moved to top the 10% of the Fortune 500, sales grew by 28% per year, stock value increased 47% per year and productivity increased by 400%.
Hal Rosenbluth, CEO of Rosenbluth Travel, in the Customer Comes Second, shows a similar philosophy of caring for workers and customers. Rosenbluth Travel has grown 7,500% in fifteen years. We see similar philosophies and results in Anita Roddick’s Body Shop as defined in her book Body and Soul, Ricardo Semler’s Semco as defined in his book Maverick, Jack Stack’s Springfield Remanufacturing Corporation as defined in his book The Great Game of Business. Then there is Percy Barnevik’s ABB (Asea Brown Boveri), and Nordstrom’s focus on customers as defined in the book The Nordstrom Way by Robert Spector and Patrick McCarty.
Towards a Win/Win Wealth-Creation System
Perhaps none of the individuals above are 100% benevolent and perhaps none are 100% win/win, customer-driven believers in private work. In fact, those like Gates and Ellison are known to be fierce win/lose competitors. Ellison is famous for quoting Genghis Khan’s statement, “It’s not sufficient that I win; others must fail.” The United States federal government sued Gates in an anti-trust suit for unfair competitive practices. Walton and Wal-Mart have been criticized broadly for systemically ruining small business owners in small towns.
Undoubtedly, there are contradictions and incoherence in our actions and thinking. However, it is not necessary that we do everything 100% consistently in order for us to evolve from a win/lose to a win/win wealth-creation system. In fact, it’s rather silly to think that we could evolve from one system to another without some slow progress and mixing of the two systems and worldviews. As we transitioned from the Agricultural Age to the Industrial Age we shifted from “make-to-fit” customization and serfdom to mass production and employment. During the transition we see the mixing of the Agricultural Age’s concept of serfdom with the Industrial Age’s concept of mass production. The result was slavery and plantations, with hundreds of slaves working in a mass production mode in the Southern United States. The first Industrial Age steam engines were used to pump water onto Agricultural Age water wheels to drive factory drive-shafts, as opposed to using the steam engines to drive the shafts directly.
New wealth-creation systems, social systems and worldviews are not born fully matured and complete. They slowly evolve with various pieces developing independently, confusing the old with the new. They build momentum, the various new pieces begin to integrate and build on one another until breakpoint is reached. After breakpoint, the systems continue to evolve. Therefore, if we expect to understand the frantic change occurring around us today we must synthesize and integrate the developing and incomplete trends into a coherent whole. By synthesizing the trends we learn to see that some things are leftover residual activity or success from the outgoing system and other things are part of the new, incoming system.
Today the vast majority of leaders and organizations still operate primarily upon win/lose adversarialism, in one form or another. However, if we look from certain perspectives we can see the win/win trends developing, growing and evolving. Clearly there is a long term trend from the ruthless robber barons of the Industrial Age, seeking to control and get as much as they could from everyone they could, to the more customer-focused and win/win entrepreneurs. The entrepreneur seeks to help him or herself by helping stockholders, customers, workers and suppliers.
As shown in Figure 2 , the shift to knowledge-power is the foundation upon which an entirely new civilization is arising. Knowledge-power is already producing the pillars and building blocks of this new civilization:
Σ Infinite win/win wealth.
Σ A buyer-focused society.
Σ The privatization of work.
In the past decades, partial success with just one of the three pillars has been shown to be quite effective, as demonstrated throughout this chapter. An individual looking to win big for herself tomorrow stands an excellent chance of achieving substantial wealth if she embraces all three of the above, not merely because she wants to win, but because helping others is simply the right thing to do.
The three knowledge-based building blocks are the pillars supporting a new system of win/win wealth-creation. The new wealth-creation system is literally causing humanity to mature and see a broader reality that has always existed—we win by helping others. For the first time in human history, practical necessity depends upon us exercising a new version of the Golden Rule, which is, treating others the way they want to be treated.
Atop this entire structure is emerging a new win/win civilization. A civilization which is leading to a new social order, beyond representative government, taxes, politicians, companies, employees and control. It is a new society propelled by the synergy of six billion fully participating individuals; one where success comes from caring for others, sharing with others and exercising individual freedom. It is a new civilization with new social institutions for a Win/Win Era.
As Goes Wealth-Creation So Goes Human Maturity
A civilization’s wealth-creation paradigm and system determines its citizens’ maturity and forms their perception of human nature. For thousands of years we have operated from a win/lose competitive paradigm not because it is our universal “human nature” but because humanity’s level of maturity has been determined by our wealth-creation system. As we mature we are learning that by collaborating we can synergize and create infinite wealth where we all win more far more than we would if we were competing with one another.
As we evaluate the traits that make up human nature or human maturity we find that they fall in one of two categories. Either they come from a love paradigm or they come from a fear paradigm. From love we see traits such as creativity, generosity, caring, sharing, nurturing, mercy, compassion, understanding, friendliness, empathy, helpfulness, consideration, cheerfulness, confidence, intuition, understanding, forgiveness and abundance. We also see the desire to help others, for synthesizing, collaborating, synergizing, learning, changing, improving, and growing. From love we see a strong connection to our children, friends, relatives, humanity, nature and the universe.
From fear we see greed, selfishness, hatred, scarcity, the “survival of the fittest,” laziness, competition, envy, jealousy, violence, fear of diversity and change. We also see such traits as being closed, distant, non-caring, dis-trustful, inconsiderate, and resentful as well as the desire to analyze, to divide, separate, conquer and control.
For thousands of years there have been great spiritual leaders and philosophers who have put forth lofty notions of a win/win and love-based human nature. We, however, could not fully buy into and consistently actualize a love-based nature in our daily lives because it was in conflict with the practical reality we experienced each day. If you have little or no food on the table and someone is trying to take what you do have, it’s hard to focus on such lofty notions. One feels compelled to focus on getting those practical needs met. Tangible things, such as food and shelter, are what we have considered the fundamentals of wealth in the past, as we focused on the more basic of human needs. Even for those who are relatively wealthy we have all been nurtured in a worldview where fear is the wealth-creation norm and most people’s material wealth has come from fear-based activity.
In the past, our wealth-creation paradigm, the making, mining and growing of things, and our wealth-creation systems to make, mine and grow these things, have propelled our perception of human nature toward fear. This is because these “things” were considered finite or scarce and thus wealth was finite. We, therefore, had to compete with one another through win/lose means for scarce wealth, attaining it much of the time at the expense of others. Because of finite wealth, our wealth-creation system has been one driven by win/lose behavior, making competition the very core of human civilization. Wealth-Creation has, therefore, driven us to more fully develop the fear-based traits of our perceived “human nature.”
What would happen to human nature if, through advances in knowledge, wisdom, information technology, human maturity and technology we created a new win/win organizing system for work. What if we discovered that we could create more wealth for ourselves by collaborating with more diverse people and the more people we helped, the more wealth we created for ourselves?
What would happen if, year after year and decade after decade, the people using win/win collaboration tapped an infinite source of wealth, continually becoming wealthier while those who continued the immaturity of win/lose competition slipped further and further into the lower economic class? What if on every level and in all segments of society we began to see the win/win reality developing and working directly before us, in small, medium and large ways, and the more we saw, the larger it grew? What would happen if each time we participated in win/lose activity we lost more than we gained when we participated in win/win activities?
What if we discovered that the world’s problems from gangs to drugs, to greed, to violence, terrorism, war, low self-esteem and more are caused by limited paradigms or hurts inflicted upon us by a competitive win/lose environment—in other words adaptations to win/lose wealth-creation systems? What if, as these hurts are healed we begin caring for one another? What would happen if the power of wealth-creation and a six billion person collaborative, customer-driven free market began healing humanity?
An awakening would occur as our worldview shifted and we rapidly began to mature. We are witnessing the beginnings of a transformation from a perceived fear-based human nature to our true nature; love, which is based upon an infinite and abundant wealth reality.
If fear-based wealth-creation has driven humanity, against its true nature, to do the evils that it has done, then there are no limits to what we can do as wealth-creation becomes aligned with humans helping one another.
In order to facilitate your seeing all of the above I would first like to take you along a few miles in my shoes, so that you can hopefully experience along with me this evolution of thought. Once this is accomplished I can expand more completely on the concepts involved. My journey is one about work because we create wealth through our work. Our civilization rests upon our system of work and as this changes so does everything else.
Copyright 2000 by Barry Carter