Wednesday, December 21, 2011

Five Critical Components Of Business And Government

A business (or government) has five components: capital, creative, producer/workers, sales, customers. Each must have roughly equal say in what is produced, quality, price, and each should share roughly equally in the profits. Today, capital runs everything and takes most of the money, and sales (the least creative or productive) is elevated above all else. That's why our government and our economy do not work: two sectors have taken too much control.

A university teacher, for example, can be a fabulous teacher and writer with a great mind. But he is pressured to do "sales," i.e. fundraising, getting grants, and if he does not succeed in "sales," the area which is least suited to his talents, he will not be promoted or possibly even retained.

The biggest paycheck in a law firm does not go to the best attorney. It goes to the best salesperson. Bring in clients, promise them anything, guarantee you'll win, inflate your credentials and lie about your history, but land the client. Once you bring in the client, you will receive a big chunk of whatever they pay to have some other attorney in your firm do the actual legal work.

Most employees of wall street firms know very little about investments. They have charts prepared by the brains in their organization, computer programs, and they sit and fill in the information about age, assets, years to retirement, and the computer spits out the suggested allocation of investments. The employees' only function is sales: bring in the clients, promise them anything, get a cut of the commission.

I remember, not that long ago, when the salespeople were considered to be the low-end employees. Death of a Salesman. They're not creative. They make nothing. They often do not even understand the product. Their talent is in being attractive, glib, dishonest and persuasive. Why does your doctor prescribe a certain drug? Because the drug manufacturer sent him some hot young female in a low cut top and short skirt to take him to a special holiday lunch. That's it.

The people who create, invent, produce, do the labor, should be in charge, in cooperation with the customers. They should decide what to make, what quality, what to charge, and how to divide up the profits, fairly, so that everybody gets to have shelter, food, recreation, medical. When work is slow, instead of firing people set up a job-share and keep everybody working. Capital and sales care only about more money for themselves. Everybody else understands the concepts of loyalty, helping a neighbor, supporting your community.