Moving from GDP to the Shift Index

Steve Denning has presented a clear narration of the Shift Index as a more reliable way to measure economic growth and general business ROI. The image of economic stability and improvement that Steve Denning builds, which seems to come from a strongly rigorous methodology, shows an economic climate that is far more challenged than intuitively perceived. He reveals a business climate that will be increasingly starved of growth and possibly undermined by modern methods of productivity.

The article shows a sober picture of various kinds of economic activity involving several industries. Some industries and some companies are noted for their positive potential due to excellent execution and alignment with reality. Other industries are not described in such flattering terms. What the narrative tells us, and it is an accurate portrayal of reality, is that the companies that grow are the ones that focus. This is no more clear this month in July 2014 than Microsoft ending Xbox Entertainment Studios and the nearly 18,000 people that will be released from Microsoft’s employ. As Microsoft gained a new CEO, I sense that they realized that they tried to be everywhere and that is not sustainable. A business succeeds when it is focused.

The mistake of the modern era was for companies to have grossly overreaching ambitions to be masters of the universe when all that was required was to make a product or provide a service and do it very well so that customers came back for the great product or service. These matters are relevant to life and living as these decisions, in aggregate as a corporate cultural value, affect the society, jobs, and how difficult versus how well people live. I am thankful for the article by Steve Denning as it brings the economic, and by extension, the employment situation into clear view. It is good to know where we are so that we may possibly think collectively where we may want to go and how to get there.

Personally, I am surprised that we as a society have arrived at this state of affairs. When you look at history of the past 300 or so years, there is a huge tradition of great thinkers not least of which include Isaac Newton, Adam Smith, Albert Einstein, and Winston Churchill. How did we go from great minds to great decline when we had the means to strive otherwise? The answers of course are readily available. You could say that it is all part of a cycle due to the limited life spans of people. Part of it has to do with the natural discomfort people have for things that are not easy. Easy vices, easy money and the endless terror of austerity versus the weakening nature of ultra affluence.

The truth is that in a world with thousands of conflicting interests, the effort to balance them and widely accommodate has driven the system to a new level of malaise. In the midst of confusion and in the wake of the widespread tolerance for the bad as well as the good accepting a sober perspective can reduce our susceptibility to empower decay. Perhaps a way to maintain a steadier navigation of the economy is to be realistic about industries, institutions, and culture. It is not where we will be tomorrow or even next year, but what are we building for the next 5 – 20 years. We can strive to see and describe the world rightly that we more clearly see our way out of the short-term and into the long-term.

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