I really like the word Ideating. To me it represents everything that is wrong with over usage of the word idea and its all possible combination.

Though I am not a communist but I find most of the things wrong with capitalism and open economy. Even then I am not a communist because I find all the things wrong with communism. As they say it is really tough to choose between two “bads”.

It is strangely funny that profit motive in an open economy many a times serves a self-defeating purpose for the society at large. I will come to explain that in a minute. If remain unchecked, which it will be in most of the cases, the flow of the river of profit often takes paths that inundates the society. Because in an open economy you owe your allegiance to no one but profit, corporate strategy becomes a victim to short or medium sightedness, and erodes long term competitiveness of the industry, sector and country.

Do not worry this entire premise is not to be followed by a lecture on true corporate governance. Though that is a burning issue as well, especially given the fact that BP has continuously won many awards in corporate governance, but here I am talking about how very thought through corporate strategies for boosting profitability inherently harm long term profitability.

In early 1900s enterprises were looking for forward integration to build competitive advantage. It not only helped them to become more profitable by keeping cost of raw materials in control but also allowed them to erect entry barriers that ensure long term insulation from competition and market vagaries. But most importantly it enabled them to offer to their customer a unique experience. This strategy worked very well till the end of the century. But somewhere during that time the concept of outsourcing took birth, thanks to opening of borders by countries like China, India and many others.

Outsourcing started a logical wave which made sense to almost everything. A manufacturing company can outsource everything – from contract manufacturing, supply chain, IT, payroll, advertisement, security. So essentially now a company needs to do nothing but brand management.

Benefits – immense cost saving and secondly the cliched argument “now you can deploy your resources for higher value add role”. I get very irritated by this, as it literally means some people are more equal than others, what effect these mundane activities will have on those who are forced to do them. Such low end boring activities are part of every role and should be done with all seriousness.

My case is different, for a person of my caliber such jobs are perfect, I find challenging tasks very draining. But cost is a fair point. In the end we come to the inherent fallacy of capitalism they do not know where to stop. Following this axiom, they continued till they become ideas economy.

Idea is all powerful. That who controls the idea has the power. Wrong. Idea is fluid, and if someone who doesn’t believes in eugenics, anyone can come up with a more powerful idea. So, if you have outsourced everything in order to pursue an idea and do other value added works you have essentially given up the competitive advantage your organization had.

I know I am simplifying the situation but as said above I can’t handle anything complex. In an article Andre Grove, says that when you give up manufacturing you also let go of lot of incremental innovations that will be generated in the process and one of them might me the next big thing.

Today, everything is a clone of another. With no real differentiators customer loyalty is a thing of the past. But I believe capitalism has self-correcting mechanism in-built and it will continuously evolve even if that evolution is backward. As I am myself benefited from outsourcing, it at least defies any logic that I am writing this piece. I tell myself stop worrying about competitiveness, management is anyways a witch craft, just make hay while the sun shines.