Sunday, January 25, 2009

Good product at right price is no longer enough

As you navigate in the current economy, it is important to step back and take the long view on your business.

Author Daniel Pink's new book, A Whole New Mind , encourages us to look at three factors —abundance, Asia and automation — that affect the very nature of our products and services.

First, abundance: The World War II and Great Depression stories told to baby boomers by parents and grandparents were about doing without. Today, the social, economic and cultural lives of much of the world are one of abundance.

Consider three quick facts on the American economy to prove the point:

• Today, home ownership is seen as the American birthright, not the American dream. Two-thirds of us are homeowners. In fact, 13 percent of all homes purchased today are second homes.

• The 2001 Bureau of Transportation Statistics reported we have more cars than licensed drivers.

• Americans spend $17 billion annually on storage units. We have so much stuff that we need places away from home to store it.

Second, Asia:Outsourcing is a continuing source of anxiety for Americans. Our recent election cycle had both parties debating and pontificating on the subject.

Paul Taylor, reporting in the Financial Times , said that one in four information technology jobs will be off-shored by 2010.

According to Forrester Research, at least 3.3 million white-collar jobs and $136 billion in wages will shift from the U.S. to low-cost countries such as India, China and Russia by 2015.

Why is this dramatic shift taking place? Follow the money.

According to Pink, an American computer chip designer earns $7,000 a month; in India, that wage is $1,000. An aerospace engineer in the U.S. makes $6,000 per month, while his Russian counterpart makes $650.

A typical American accountant might command $5,000 a month, while a similarly qualified and English-speaking accountant based in the Philippines makes $300 per month.

Third, automation: In an Esquire story titled "The Best and the Brightest," computer scientist Vernor Vinge said, "Anybody with even routine skills (once) could get a job as a programmer. That isn't true anymore. The routine functions are increasingly being turned over to machines."

All of these facts are disturbing but true. So what do you do?

Pink contends that products today not only must be reasonably priced and functional, they also must be beautiful, distinctive and meaningful.

Think of Apple. The iPod wasn't just sleek and interesting — it solved the consumer problem of downloading music, via iTunes. Taking another step, Apple announced what it calls the "first green laptop." It features a recyclable aluminum and glass casing, requires less energy to run and is manufactured with fewer harmful chemicals, all of which appeals to green consumers.

Here's the bottom line: We in business must learn to use our whole brain. Approach your job and business more holistically. Combine high-tech abilities with high concepts and high-touch approaches to win.

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