*If you missed it, check out part one of A New Attitude for a New Year.
Increasing percentages of rich country workforces are moving from farming and manufacturing to knowledge work, which creates broad opportunities and challenges for their citizens. As property has moved from the physical realm to the intellectual one, serious issues of applicability of property rights to knowledge work have arisen. Strong protection of property rights is at the foundation of the prosperity begat by market systems, but intellectual property is harder to protect and arguably should be less protected. As a result of this historic shift to knowledge work as the engine of economic growth, the U.S. patent office has endured changes to its workflow from a trickle to a flood over the last century (including a few by yours truly - http://www.journyx.com/company/patents.html)
Another problem faced by companies in the new knowledge world is understanding their costs. This is easy for farmers and has been solved for manufacturers, but most knowledge worker companies still have no idea of their costs of production in any real sense. Software companies, for example, produce products at unknown costs. Drug research is done in a vacuum of cost understanding and engineering firms have no idea which customers are profitable and which are not. Effective time tracking and project management practices can help you solve that problem.
Additionally, the world economic system has become increasingly characterized by international trade in manufactured goods (e.g. computers), commodities (e.g. oil) and services (e.g. call centers). This specialization on a global basis has created a situation where your competitors are increasingly less likely to be close to home, and this makes understanding of per-product, per-project and per-customer profitability all the more important. Some of your customers will be more profitable than others. Without knowing your costs, however, you cannot know which ones are which. This is why we invented a process for taking you down the path to per-person, per-project profitability.
The disinflationary pressures begat of hundreds of millions of people from China and behind the iron curtain being thrown upon the international labor pool have nearly run their course. Wages are rising fast in India and China and soon many of the benefits of globalization will be wrung out of the system. The low hanging fruit will be gone. When that happens, governments will find it increasingly difficult to keep inflationary pressures and recessions at bay. We will be returning to an economic era where deeply understanding your costs will be paramount. Companies that gain a deep understanding of their costs will lead the market and others who do not will fail or, at best, limp along in a torpor.
You don’t have to stay in the dark. We can help.
This new year I beseech you to make a commitment to start working towards gaining a deep understanding of the costs of production of your knowledge workers.
It is more like an exercise program than a shot in the arm and its benefits are similarly long term. We are here to help you accomplish it.
- Curt Finch, Journyx CEO