Managing for Abundance

I love the way Chris Anderson (of Wired) thinks.  His arguments provide a fresh new perspective on Society, and are far more relevant in today’s age than the stale stuff that most business schools churn out.  If you haven’t already, read The Long Tail – it’s a fascinating story of how the new age demands a new way of thinking.

Also, read this piece in Wired where Anderson talks about “managing for abundance, not scarcity”… 

Wired’s IT department used to send out occasional emails telling employees it was time to “delete unneeded files from the shared folders”—their way of saying they had run out of storage room on the servers. Because we’re good corporate citizens, we all dutifully scanned through our files, deleting those we could live without. Perhaps you’ve done the same.

One day, after years of this ritual, I began to wonder just how much storage capacity we actually had. Turns out, not so much: 500 gigabytes. At the time, a terabyte of memory (1,000 gigabytes) cost about $130. I had recently purchased a standard Dell desktop PC for my family, which the kids used for playing videogames; it came with a terabyte internal hard drive. My children had twice as much storage as my entire staff.

How did this happen? The answer is simple: We had gotten stuck thinking that storage was expensive, when in fact it had become dirt cheap. We treated the abundant thing—hard drive capacity—as if it were scarce, and the scarce thing—people’s time—as if it were abundant. The corporate bureaucracy had gotten the equation backward. (Let me hasten to add that my office quickly added a heap of storage, and those emails don’t go out anymore!)

This is the truth of most large enterprises, and a theme we see repeated in every home or workplace…

Our brains seem wired to resist waste, but we are relatively unique in nature for this. Mammals have the fewest offspring in the animal kingdom, and as a result we invest enormous time and care in protecting each one so that it can reach adulthood. The death of a single human is a tragedy, one that survivors sometimes never recover from, and we prize the individual life above all.

As a result, we have a very developed sense of the morality of waste. We feel bad about the unloved toy or the uneaten food. Sometimes this is for good reason, because we understand the greater social cost of profligacy, but often it’s just because our mammalian brains are programmed that way.

Our grandparents grew up in an age when a long-distance telephone call was an expensive luxury, to be scheduled and kept short. Even today, many find it hard to keep people of that generation on a long-distance call for very long—they still hear a meter ticking in their head and rush to finish.

Can we harness this realization to our advantage?  You bet.

Nature is so wasteful because scattershot strategies are the best way to do what mathematicians refer to as fully exploring “the potential space.”  …The way to get from what the mathematicians call a local maximum to the global maximum is to explore a lot of fruitless minima along the way. It’s wasteful, in a sense, but it can pay off in the end.

This is the power of waste. When scarce resources become abundant, smart people treat them differently, exploiting them rather than conserving them. It feels wrong, but done right it can change the world.

The power of waste!  Now, who would’ve seen that coming?

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