The Business Model

Some years back NSP was thinking about putting a coal-burning power plant in a town close to ours. They sent a couple of their suits down to placate the locals and reassure them that all would be well. During the question period that followed their presentation a farmer asked them what would become of the numerous acres that would be taken up by the plant and its holding ponds. The spokesman said he didn’t know, they couldn’t project past five years. The farmer responded that if the land were left alone he could predict with some assurance that the land would still be producing corn and beans. One of the wittiest comebacks I have ever witnessed.

It’s an interesting thing, this business model that doesn’t allow us to predict long-term. It’s all about short-term — which translates into profits and losses. The models that the mathematicians come up with cannot work with too many variables, and as the years are added up the variables begin to outnumber the constants. So prediction becomes difficult, if not impossible (just ask the weather prognosticators!) The business model gives us short-term thinking and quantification. The model works, there is no doubt about it: business has brought great wealth to a few and raised the standard of living for many in this country and around the world. It has even provided us with a paradigm of success, for better or worse. But it has its limitations — as suggested above.

It doesn’t encourage long-term thinking and it seeks to reduce all issues to numbers. The model doesn’t work in contexts other than business — say, education. The problem, of course, is that it has in fact been forced on education and has increased the difficulties the schools are having teaching the young. As though there aren’t enough problems already. The notion that schools have to be held accountable and their “product” evaluated on a scale that can be quantified is absurd. But that’s where we have come, because it’s the only model bureaucrats know.

Further, the goal of education — which should be to put young people in possession of their own minds — has become reduced to getting a job. As though we could predict today what the jobs will be when the college Freshman graduates. We lie to them when we lead them to believe that the jobs available now will be available four or five years down the road. Here’s where the business model might be applied in a sensible way.  But we forget our inability to predict long-term in the desire to “sell the product,” which is the latest fashion in education finery — culinology (whatever that is), or accounting, or forestry. The only thing about the future that we know for sure is that it will change, and the only preparation for change we can urge on today’s students is to learn to think, to express themselves, to calculate, and to understand as much as possible of the world around them. The irony here is that the people who can use their minds are the ones who will get the jobs — the goals of education and job preparation are not necessarily antithetical to one another, as long as we get the priorities straight. But if we stress vocationalism and ignore liberal learning (as we have) we place blinders on the students and decrease their ability to adjust to changing circumstances down the road. If the seventeen-year-old focuses exclusively on, say, office management and then discovers at age 36 that the job is boring — or just not there — she is trapped in a straightjacket. If the focus is on breadth of preparation, the student will be ready for anything.

Short-term thinking, quantification, and the notion that it’s all about jobs are antithetical to education properly understood. The business model works in the world of profits and losses; it doesn’t work in the world of human development.

2 thoughts on “The Business Model

  1. Regrettably, today’s business model emphasizes each quarter’s or year’s bottom line by abandoning research which leads to new products. Research efforts are “investments” that pay dividends in the future. Thus, they require management to have an intentional sense of delayed gratification and a willingness to sell this “future product” notion to investors. However, because business executives are so mobile these days, few of them in publicly traded corporations are inclined to invest their current bottom-line for a future that may not even be realized on their “watch”. When businesses were more family -owned, they knew their long-term success was tied to research which would develop their next “great” product.

    • You make a good point, Bruce. We need to distinguish between publicly owned and privately owned businesses. They have a different ethos.

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