…if they interviewed them the way they interview developers:

1. What’s  ROI stand for?  Have you ever used this concept?

2. What is an MBO?  Give an example.

3. Name three ways a PERT chart differs from a Gantt chart.

4. If you had to explain it to a junior manager, how would you describe what “venture capital” does?

5. Define “delegation”.  How does it differ from “assignment”?

6. What are all the ways a company could raise capital?

The point here isn’t that the questions are easy, though many are.  It’s that they aren’t tests of managerial skill; they’re pop quizzes on management theory.  Surely what you’re really interested in isn’t whether someone can define the buzzwords the same way the books do; it’s what they’ve done and whether it worked.

I just read Chris Anderson’s The Long Tail.  I can save you about 250 pages and $15.95 by explaining the main point: the Web removes the constraints of physical stores and narrow distribution channels (like movie theaters and CDs).  Sales and production don’t need to be tied any longer to a small number of hits.  There’s money to be made in the ‘long tail’ of the demand curve.  45% of the music sales of Rhapsody come from tracks not available in the largest physical stores.

Where the product is virtual, like music, sellers in effect have no storage and distribution costs, and can therefore offer everything.  Industries based on creating hits will just have to adapt.  And as eBay shows, physical products can approach this ideal surprisingly closely. 

There’s some exciting aspects to this… I’m fascinated by the democratization of production, for instance.  Conlanging, for instance, is nearly irrelevant to the publishing industry.  (Klingon was a freak hit, but it’s 23 years old now and no one’s done as well since.)  But I think there’s a market there, albeit tiny.  Traditional publishing didn’t serve it, but print-on-demand sell-via-Amazon publishing can.

So Anderson’s idea is interesting; but what do you do with it?  If you’re a minor musician or writer, you produce things, maybe with a slightly larger possibility of minor success– but you knew that already.   But for business people, the problem would seem to be that the obvious applications are already taken.  You’re not going to start a new iTunes, Amazon, or eBay. 

One side effect that will probably be a big battleground: copyright and trademark protection.  The big media companies effectively want permanent copyrights– Disney never wants Mickey Mouse cartoons in the public domain.  For Long Tail producers the benefits run the other way: e.g. a prolific YouTuber would like to be able to adapt other people’s videos, and doesn’t make money anyway so isn’t losing sales through piracy.  I’d expect the legal balance to swing more toward the interests of the aggregators rather than the hit-makers.  (Useful comparison: Viacom, which includes Paramount and Dreamworks, has revenues of $13 billion.  Google, which includes YouTube, has revenues of $22 billion.)

One of the companies I used to work for made an interesting change a few years ago: it’s now an employee-owned company.  As it was explained to me, this provided two advantages that have helped keep it profitable during some rough years:

  • The considerable expense of the former CEO’s salary is gone. 
  • There are tax benefits to being employee-owned.

Some of you sickly corporations out there might want to try it: buy out the VC guys, fire the CEO, profit!!!

One may reasonably ask, if this is such a bright idea, why don’t more companies do it?  Perhaps there’s a good economic reason for this; if so, it certainly didn’t apply to my former company.  I’ll wager that the answer is mostly social: the decision maker at most companies is the CEO, the very person who loses his job in this scenario. 

Do companies really need rock-star CEOs?  The last few years should have shown that they’re as likely to drive their companies into the ground as to make them fly.  Personally I suspect that in a century or less, people will look back at the CEO era with amused disdain, as we look back at the age of kings and empires.

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