In the spirit of de-monetisation
This is the second blog in a short series of “de‘s”. Life is full of cycles: there are phases where everything is on the up-trend, then cycles of seeming stagnation and finally we also find these cycles where everything seems to be going down.
Depending on where we stand in a full cycle – i.e. up, stagnating or down – we need to adapt our economy accordingly.
So far no rocket science involved here, just plain old common sense combined with close observation of one-self, one’s surroundings and environment, be it social, political, or whatever.
As such, during the last 20 odd years there was a clear upwards cycle that could be observed in terms of the importance we place on money. Okay, money has always – since its existence – held a special form of attraction for mankind. In fact, economically speaking I would dare say that money is probably the only good that does not show any signs of decreasing marginal rate of satisfaction.
In economics the notion is held that every product has a decreasing marginal rate of satisfaction. That means, that the first ice-cream tastes wonderful, the second we only eat due to some greediness but actually don’t appreciate as much as the first and the third ice cream we cannot face, as our stomach begins to revolt. No doubt, you get the idea.
Anyway, with money, this economic law does not seem to hold true, especially when viewed as a good instead of an instrument. In fact, human beings don’t seem to be able to get enough “bits and bytes” credited to their account.
The following I personally was able to observe during my New York years 20 years ago in the finance industry:
At the same time as the focus within the commercial banking industry shifted to the investment banking industry, a shift also happened in the focus with respect to the client. That is, there actually was a de-focussing on the interest of the client and an additional focus on making extra profits for the finance industry and one’s own pocket.
As this subtle shift happened – away from the client and more for the industry itself – the golden law of any service industry was violated. Let’s call it “the law of focussing on and serving the client’s best interest”.
Hm. What once was a true service industry that knew its place in the economic universe has now become an industry that does not seem to know anymore what its objective is. It is as if the servant is not happy anymore with its status and decides it wants to be king. The result can only be chaos.
What started in the finance industry is now observable in just about every service industry around the globe. Be it healthcare (service), insurance (service), governmental bodies of all kinds (service, service, service), teaching (service) or finance: everywhere we can observe that the focus has shifted from the client to monetary (or power) aspects.
We should not forget that money is an instrument not the goal! When we confuse this fact, we end up in the situation we are in.
The solution? – Actually, I maintain it is quite simple, also if not that easily established.
In all areas of service we clearly need to refocus on the client and de-monetise the focus of the industry. This does not mean that we don’t focus on the expenditure anymore. It simply means that we should not become fanatic and waste our time and effort with calculating how much we can gain through the needs of other people and endless administration focussing away from the client.
One aspect in this context for instance is obviously the much discussed bonus – or any other “side-tracking-incentive-away-from-the-client- issue” for that matter. Clearly, there is no reason whatsoever why a bonus should be added to the work one was hired to do in the first place. Everything else is or ought to be covered by overtime pay.
Establishing the current bonus system has clearly corrupted each and every service industry. It has induced and established a shift away from the client to one’s own or rather the company’s monetary well-being. And, it is very likely the main instigator for the current cost explosions all over the place, besides making all those workers highly unhappy that do want to focus on the client.
It then seems obvious that whenever and wherever monetary compensation – be it for oneself or the company – allows for a shift away from the client we need to de-monetise the focus for the system to be able to find its harmonious balance again. OM.