Tuesday, May 21, 2013

Innovation: key to preventing job confiscation

Following the simple instructions, I took the spoon with my right hand and cut right through the caramelized nitrogen-frozen mint leaf and then through the moose supporting the leaf. Cutting through both was smooth as silk. I then took the perfume paper strip with my left hand and placed it near my nose ready to be smelled. The goal was to take a bite off of the leaf and moose at precisely the same time as smelling the perfume. The result was absolutely beyond this world. For the first time in my life I experienced total silkiness. The symbiotic characteristic of taste, smell and texture was like that of a smooth rose petal blowing up inside my head; and I mean blowing up.
photo image of a signature dish at El Celler de Can Roca, undeniably the best restaurant in the world.
Launch El Celler de Can Roca
This was just one of the great dishes I enjoyed at El Celler de Can Roca, undeniably the best restaurant in the world. From solid soup to food that turns into gas when in contact with your mouth, nothing is what it seems. Following on the foot steps of grand master chef Ferran Adria, these new superstars of the culinary world practice what is known as molecular gastronomy. They have completely destroyed any preconceptions or traces of what food used to be. French cuisine, the king, is dead; long live the king.
What these new chefs have done is to restart something that we view as basic: food. They have taken the proverbial white canvas and splattered it, Jason Pollock style, with all sorts of innovative ideas. Food is no longer just about tacos.
Photo image of Frank Gehry's Guggenheim museum in Bilbao, Spain
Launch Gehry Technologies
Another great innovator I was lucky to find before reaching broad fame is Frank Gehry. He is the only architect in the world who has designed museums where the building represents a much higher expression of art than any and all paintings and sculptures inside. The first time I saw the Guggenheim museum in Bilbao, I was completely taken by its majestic expression of shapes. I immediately knew that I was witnessing something special. From looking at his structures it is immediately clear that only the latest in computer aided design software could convert his ideas into real buildings. But the truth is that this genius has never used a computer. It is up to his studio to handle the details of the concepts that made him the only modern architect of the 21st century.
Why could we not execute with the same degree of creativity in business? The two innovation examples illustrated above demonstrate that new thinking can transform even industries where ideas are so old and so set in stone that one would think it impossible to erase preconceptions.
While trade has been around for a long time, our business institutions are very young. Many of the principles behind our corporate institutions are not older than 250 years old. The industrial revolution launched an alternative way for wealth creation. It was no longer necessary to win a war to become wealthy. Business promised to bring long lasting wealth to its owners. To see how things used to be, follow the history of descendants of British and French army generals. The long lasting nature of wealth creation through successful soldiering should be readily clear.
Through an innovative perspective, there surely are new ways businesses could be structured; ways that could bring added value to all stake holders: citizens, employees, owners and the environment alike. I am referring to innovative methods of wealth creation for all. I am not referring to superficial responses to regulations, unions or environmentalists pressures.
photo image of hurricane Katrina survivors ridding a post office truck
Launch New Orleans / Katrina
To me, businesses have civil responsibilities just as much as I do. I do not rob my neighbor; not because there is a law that protects him but because doing so would destroy our civil world. Look at New Orleans after being hit by hurricane Katrina and the state of total absence of civility. No thanks, that is not for me. I prefer to respect my neighbor and never have to deal with such depressing problems. A person who litters, affects everybody. Another who picks up after herself may not benefit directly, but in doing so improves everybody's lives. Broken windows theory anyone?
Businesses can create value without government pressure. This is important because property protection, an essential element of wealth creation, is in fact performed by government. If elected officials decided to confiscate property, they could. In fact, they already confiscate property. Taxes are the most obvious way that governments take from us to fund their projects. But if governments somehow decided to confiscate all of what we own, it would be very difficult to stop it. I have heard countless stories of Venezuelan business people who heard a knock at their door one morning, only to open and be informed by the soldier standing outside that a destitute family will now live in their house with them. Not a nice way to start the day. Such orders continue to be enforced by the army.
image of Venezuela's dictator Hugo Chavez
Launch The Economist
The Venezuelan government had designed a public program that confiscated part of a home and no one seems to have come up with a way to prevent it. Even Chavez's death did not put an end to the practice.
Note that President Obama has explicit desires to continue to conduct wealth redistribution programs. So we, in the US, are also exposed to the risk or confiscation. Perhaps the most important long term threat to property will be in the form of a change in job ownership. Let me explain.
Today, jobs are created by companies. Companies hold title to these jobs. If an employer wishes, it makes jobs available. If she so likes, the employer can refuse to hire someone who is not qualified to fulfill the business' needs. But what if government was to confiscate job ownership. What if employees held ownership of jobs. This is not far fetched. Have you heard of employment entitlement; as in holding title? Unions exercise it. If you operate within a unionized industry, unions will determine whether a business can add or remove jobs. Unions can also determine who can hold such jobs. In these cases, businesses no longer own title to the jobs; making the threats of job confiscation much more real than one would think at fist glance.
So there are strong incentives for businesses to innovate in ways that creates value for all. At the one side there is the threat of job confiscation by government. At the other, there is the possibility to create a civil environment where we can all thrive and be happy. I therefore do not see environmental and social responsibilities as anti-business. They are essential for business instead. Businesses are where the brightest and most innovative humans practice. Why could we not deploy their great outputs to invent the business of the future? Why could we not eliminate sacred cows to give rise to a better future for all? Let's build a future free from unions and threats of confiscation by government.
Yes, today I took the very poetic and deeply philosophical route. But my conviction of a strong need to innovate is nonetheless present every day.

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