18:08, Tuesday 3 Apr., 2012 Link
I keep coming back to this article A Brief History of the Corporation: 1600 to 2100 (which I first read back in Week 315), in particular the section
Schumpeterian Growth and the Industrial Economy (1800-2000) which is about (and I quote)
THE COLONIZATION OF TIME which I have written in caps and underlined because it is meant to be said out loud like this:
The COLON IIZ AAAATION OF TIIIIIME.
Per capita productivity is about efficient use of human time. But time, unlike space, is not a collective and objective dimension of human experience. It is a private and subjective one. Two people cannot own the same piece of land, but they can own the same piece of time. To own space, you control it by force of arms. To own time is to own attention. To own attention, it must first be freed up, one individual stream of consciousness at a time.
The Schumpeterian corporation was about colonizing individual minds. Ideas powered by essentially limitless fossil-fuel energy allowed it to actually pull it off.
The equation was simple: energy and ideas turned into products and services could be used to buy time. Specifically, energy and ideas could be used to shrink autonomously-owned individual time and grow a space of corporate-owned time, to be divided between production and consumption. Two phrases were invented to name the phenomenon: productivity meant shrinking autonomously-owned time. Increased standard of living through time-saving devices became code for the fact that the "freed up" time through "labor saving" devices was actually the de facto property of corporations.
Gosh, feels like the internet doesn't it.
For the same two centuries it seemed like time/attention reserves could be endlessly mined. New pockets of attention could always be discovered, colonized and turned into wealth.
Then the Internet happened, and we discovered the ability to mine time as fast as it could be discovered in hidden pockets of attention. And we discovered limits.
And suddenly a new peak started to loom: Peak Attention.
Sidebar: There's something I faintly remember reading in Lefebvre, Love & Struggle: Spatial Dialectics by Rob Shields. It's so faint I'm not sure I'm remembering it correctly. But I think it was something about Henri Lefebvre writing in post-war France about home automation - washing machines and the like - and seeing it as a turning inwards of the forces of colonisation: France was no longer colonising other countries and instead was eating itself in a colonisation of everyday life. Which gives me an image of a country-body made from rapacious corporations, starved after being cut off from their food of the various European empires, digesting its own body of workers and consumers, burning the healthy fat pockets of attention and boredom and creating the jittery, never at rest, meth-addled population we have today.
One final thing from A Brief History of the Corporation (READ IT), this line:
I am not sure who first came up with the term Peak Attention, but the analogy to Peak Oil is surprisingly precise. It has its critics, but I think the model is basically correct. I think I might have said it first, here and here. But who knows, it probably wasn't me.
Return on Equity
And the thing for me is I like to trace the paths between abstraction and acts. For example, at work we've recently been doing some consultancy with a company on new product development, and part of the work (I encourage it to be part of the work) is to consider not just new concepts, but how to ensure new concepts are adopted. That means understanding the business, the audience, route to market, etc, but also the personality of the organisation: what will work well in the organisation, and what will the organisation resist?
The personality of an organisation is embodied in its structure (which encodes both who socialises with who, which is my best model for how understanding and influence is transmitted, and the values and worldview of its management), and also its myths: what is its origin (this will be held up as a triumph to mimic); what examples does it use as patterns to mimic or run away from?
So I like to be able to simultaneously speak about the personality of an organisation (the abstraction) and how that abstraction manifests in action -- that is, the behaviours of individuals and much smaller groups. This is my route to figuring out how to change an organisation... and honestly, getting an organisation to produce a new product or support a new concept is always going to involve change, because if the organisation didn't need to change then it would already be doing whatever we've been brought in to help with.
One of the things that has intrigued me is how the pursuit of profit by a corporation - the concept of which is bizarre, by the way, that "pursuit" is a something that can be done by a "corporation," a thing/idea partially comprising but also transcendent from the humans who can actually pursue - anyway, how the pursuit of profit by a corporation leads to the very many (but not all) frankly shitty organisations that exist in the world today, organisations which
- neither make the people in them happy;
- nor make the people who interact with them happy;
- are none-the-less profitable!
- but dealing with them feels a bit like dealing with a person whose memory is sub 3 seconds, and whose left hand and right hand are controlled by separate bodies who fell out once over a silly and probably avoidable situation and a decade later now won't even go to the same parties, the misunderstanding having calcified and cooled into a mutual avoidance which is no longer seething - it would show up as dark blue on one of those thermal imaging cameras - but is utterly fixed.
Intrigued that is until I read End the Religion of Return on Equity in the Harvard Business Review which puts the blame firmly at the feet of a human named Donaldson Brown, of the company DuPont, in 1917:
A hundred years ago, the focus on squeezing every drop of return out of equity capital made great sense. ...
The ability to do that rose to a new level in 1917, when General Motors was in financial difficulty and DuPont took a major position in the company. (GM represented an important channel for Dupont's lacquer, artificial leather, and other products, and Pierre du Pont was on GM's Board.) DuPont sent Donaldson Brown, a promising engineer-turned-finance staffer, to Detroit to sort things out, and sort them out he did.
Brown noted a simple fact: Return on equity can be broken down into a three-part equation. It is logically the product of return on sales times the ratio of sales to assets times the ratio of assets to equity. By parsing ROE into the DuPont Equation (very rapidly to become a business school mainstay), he provided the basis for organizations divided into functions with their own objectives. He reasoned that if marketers worked on maximizing return on sales, production managers were rewarded for the sales they squeezed out of their physical plant, and finance managers focused on minimizing the amount of equity capital they needed, ROE would take care of itself.
Thus Brown not only sowed the seeds of the today's hated silos, he also set three "runaways" in motion. That is to say, he created objectives with such strong feedback loops that they were pursued single-mindedly, even to unhealthy excess.
The DuPont Equation.
Bang! Read that again. Each of the three components of the equation is a top-level division of the company, as separately run as it is possible to do, with different goals, requiring a different mentality from the people in the divisions.
Again: Each ratio in an equation written by a man named Donaldson Brown in 1917 has become separated into different divisions in org charts of corporations almost 100 years later.
No wonder some corporations can feel so schizophrenic.
The article makes it clear...
In their pursuit of margin, marketers sought market power even to the point of monopoly, requiring antitrust laws to cry stop at the last moment of the end game. Similarly, production engineers treated their factories royally and their labor as expendable, until unions and labor laws intervened. Financial managers, supported by their bankers, increased their debt-to-equity ratios until capital requirements were imposed-oops, we mean until there was a catastrophic financial crash and a depression.
...and then it continues into speculating about a new formation for the DuPont Equation. It's worth your time.
How these ideas of Peak Attention and the DuPont Equation are linked
Don't know, still thinking about that.