20 January 2007

Guaranteed Super Bowl Prediction and the Design of Your Business

I've got a prediction for the Super Bowl. And it's guaranteed. Sadly, for, you, my prediction doesn’t name Saints or Patriots or Bears or Colts.

(Note that two of the teams take their names from totemic figures - drawing their strength from bears and colts as if they were ancient Celts or American Indians; the other two teams, by contrast, take their name from ideals of politics and religion. A battle between Saints and Patriots would somehow seem appropriate for the times.)

My prediction is that ONE team will win. This seems like the most obvious prediction I could make, but it is worth noting because this is by design. 32 teams started the season, a season designed to eliminate teams bit by bit until only one team is left standing.

So why mention this? Well, it is worth mentioning because this is a design issue with a predetermined outcome. Your business might have a similar design goal. It's worth noting that only in undeveloped, poorly designed countries the leader makes the most money. In nearly all Fortune 500 companies, the leader, or CEO, makes the most money. This is by design and everyone in the company knows that one person will win the "get rich working for the company" contest. This suggests a poor design. In developed, well designed countries plenty of people make more money than the leader, the president or prime minister.

What if, instead, winning within a business were more like winning in business. That is, what if your company were not designed to have the leader take home the most money? What if the top income in your company were not determined by position but by natural consequences that meant that any number of employees might make more than the leader, just as in more developed, or better designed, countries any number of citizens make more than the leader?

We don't question the fact that only one team will win the Super Bowl each year. We should question the fact that only CEOs (only one employee) will win the "make the most money" award. This is a design flaw.


Life Hiker said...

Amen to that. Next question - who determines who will make the most money, and how will they do that?

Ron Davison said...

Answering that deserves a posting of its own (if not a book). The short answer is that the corporation of the future will take advantage of information technology to create internal markets that gradually erode the bureaucracy. Creating such natural consequences suggests that an employee who files a valuable patent or cracks a new market could actually be blamed for such a significant increase in equity value that he or she actually makes more than the CEO.