The Devign Path

My goodness I loved this book! I got this book from the library because it had such an intriguing opening and was so densely written: the authors didn’t waste time getting to the main points and they had a whole lot!

The main argument of the book is this – there are two general economic principles, the economy of things and the economy of information. They are unique and are governed by different rules. Take a letter for example. The value of that letter is made up of the physical artifact that it is printed on and the information it contains. What would happen to its value if you were to separate the two? Would the letter become worthless? Think of maybe a love letter or a degree . . a prescription perhaps . . . hmm.

That is what is happening all around us. Computers have enabled us to separate the economy of information from their physical objects and the crazy thing about the economy of information is that the cost of creating new information is approaching zero – it scales logarithmically. You print your first book with the first printing press – how much does it cost to print the next one? I write a blog. How much does it cost to reproduce my blog somewhere else? Nothing.

With all this information – as your mailbox will testify after a you go on holiday – it creates an opportunity for someone to provide a service to navigate this ocean of data and make it meaningful – search engines. And by becoming gate keepers and aggregators they recreate value in new and creative ways. Pay-per-click? Google ad-sense? Who saw that coming?

Would Wal-Mart be Wal-Mart without the intense cost cutting that is made possible by the advanced information systems that they use to manage their suppliers? At the heart of the Toyota Production System is the ‘anban’ signaling protocol used along the production line which in essence is an information management tool.

It is intimidating to feel like just another 1 or 0 in the bit stream but the authors leave us with this reassurance –

What resists deconstruction is the idea of the corporation as defined by its culture and its strategy. The corporation as purposeful community. And if all else fades, perhaps purposeful community becomes the essence of identity, of management, of leadership. In a world of impersonal technical change, that is a refreshingly human thought

Speaking of new and interesting ways to use knowledge, did you know that the transistor invented by Bell Labs, which they did not know what to do with, brought fame and fortune to Sony? Which relates to a point that Drucker made that it is becoming more and more important for management to know what is happening outside of their industry because this is where transformative change is going to come from.

Did someone say Sony? Segue please…