Plenty More Parachutes

01 June 2012

Simon Baker compares the faltering progress of medicine and the corporate mindset that embraces the ‘billable hour’: > The similarities between bad medicine and the prevailing mindset that thinks in terms of billable time and efficiencies are merely illustrative. […] In physics the barriers to progress are perhaps theoretical. In oceanography perhaps they are practical. What are the barriers to progress in knowledge companies?

My terse answer; the people who own and operate those companies.

Whether change is incremental or transformative the dilemma is that markets change faster than mindsets. If a scientific and evidence-based profession such as medicine has been this slow to change, what chance is there of moving away from the labor theory of value – the modern day equivalent to bloodletting – any time soon?

The consequences of failure are not equivalent: People die when medicine is bad because nature is brutal, but in business there are safety nets and loopholes.

Moderately well informed executives and major shareholders have protection against the turmoil of markets via the legal system, which can grant second chances:

“Here’s your golden parachute, and here’s your next executive job. Don’t worry about making your next company more effective, we’ve got plenty more parachutes.”

My theory is that moving away from the labour theory of value takes a mindset shift at the very top of a company. Big, incumbent companies will probably never make that shift; they have too much inertia, too much protection from failure and too much to lose.

It’s up to the next generation of leaders and their organisations to demonstrate the value of throwing out the rule book along with the parachutes.

UPDATE: Simon points out that his comparison is specifically about the progress of medicine between the time of Hippocrates and ~1865.