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Gareth Morgan - Creativity and The Organisation |
Apart from the size of this week’s Trade Me transaction probably the most startling and encouraging revelations are the age of those responsible for the success of that business and the fact it has succeeded in a space littered with corporate failure. Let’s deal with the corporate aspect first.
From the perspective of the ‘creative destruction’ that is the essence of a vibrant, productive economy this is extremely encouraging for the prospects of the New Zealand economy. It sends a message one hopes, to the innovative, creative, and independent amongst our youth – that On-line technology provides a platform upon which they can create value for this economy and themselves without having to go abroad.
For many this offers a beacon of hope that the contemporary New Zealand economy isn’t the preserve of large State- or foreign-owned corporates which have vacancies only for journeymen and which by their very nature, choke innovation and certainly self-determination.
Trade Me, like EBay abroad, has offered a better way for consumers to conduct their purchases. They have flocked to it in droves to literally, get a better deal. They should be, and they are happy. It is analogous to the advent of Stephen Tindal’s ‘The Warehouse’ from the mid-1980’s when deregulation of importing enabled an innovator to revolutionise retailing. The ubiquity of the internet has enabled Trade Me to offer New Zealanders a better way to buy and sell – the business case for it is a no-brainer as far as the users are concerned.
As we all know the internet is a platform that offers a whole new way of doing business. Despite the handicap it faces from the reluctance of the government-created, now foreign-owned monopoly Telecom to provide practical access to many New Zealanders, the technology offers huge scope for innovative and probably young New Zealanders to create better ways for us to do stuff. The opportunities would be even more abundant if Telecom concentrated less on litigation and more on providing broadband to the country.
There will be failures – in fact already there are corpses everywhere; AMP’s attempt to aggregate financial services through its LIQUID website was a $9m blunder, the $15m Ferrit website seems to be digging its own grave and of course Whitcoull’s Flying Pig was just that. In large part this stumbling around by corporates, spending oodles on white elephants, reflects more money being available than sense. But the failures are helpful – they show others that money isn’t an advantage – in fact it’s pretty much what not to do.
Globally, the internet revolution has not been the product of footsoldiers of corporate pyramids. Rather, it has been the child – originally of free-thinking academics and then of similarly-endowed entrepreneurs. Amazon, Google, Yahoo, Ebay – none were conceived in the laboratories of corporate America.
Yet any idea that is successfully converted commercially has a half-life. Nothing goes forever. The essence of successful corporate management is to procure successful commercial innovations then nurture them so as to extract maximum commercial value before they’re inevitably become obsolescent. So it has been that Ebay for instance corporatised – by hiring a bevy of Harvard MBA’s and a professional CEO – and setting out to maximise the commercial potential of what had been delivered by the innovators.
Trade Me has clearly reached a similar juncture, where in the judgement of those involved it is ready to be taken to the next stage of its commercial life. When one sees Ebay, a more mature business than Trade Me, still achieving growth rates of 40% pa, the purchaser Fairfax has obviously plenty of scope to obtain more users of Trade Me and deliver all users a greater range of services. The business retains very exciting prospects.
The second theme relevant to the Trade Me transaction is obviously the age of those involved. The message parents and their young people might choose to take from this is that creativity – whether in Academia, the Arts, Technology, or the Trades – is one of the most precious attributes a person can possess.
The Press have simplistically referred to Sam as a University Drop-Out. The reality actually is that he was an Opt-Out. Despite his father’s reservations, sourced arguably from too much formal education, Sam decided that continuing classes was leading to life as a foot-soldier in some bureaucracy or corporate pyramid. Self-determination was being taken away and further, by having a student loan he was having to pay for the privilege! The price obviously was too high.
The rest is history but for parents I suspect there’s a message here. We have to be careful not to impose too much of our paradigm on the next generation. It’s clear for instance that schools are a necessary evil – convenient baby-sitting facilities that have an awful tendency to smother the curiosity of the child – the first conditioning on the conveyor belt to becoming corporate journeyman. By necessity, classrooms require strict compliance by children and that straitjacket comes with strings attached. The child’s creativity may be asphyxiated as a result.
The strength of an economy is its human capital. The commercial world needs creatives as much as it needs functionaries. Of course some functionaries, having been in Drones-ville where paid work is purely attended to procure wages, may eventually rediscover their creativity outside working hours. Good for them but pretty sad it was choked off in the first place.
As parents we have a responsibility to provide an environment enabling a child free choice to reach their potential in a manner that maximises their personal happiness. There is a whole body of economic literature now that links happiness and creativity to national productivity. People working primarily for the enjoyment creativity brings, rather than remuneration, is central to that theory. This is the story of Trade Me as much as it is for the successes we see in the Arts and in the Trades – a happy plumber is a productive plumber.
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