Combating the Zombie Threat

July 16, 2012

The business press has recently been focused on the concept of “thin value” and “thick value.” For example, here’s a nice overview from the Harvard Business Review and another from the Innovation Excellence web site.

As defined in these articles, thin value is is an economic illusion that many firms are pursuing today: generating profits that are economically meaningless, typically by taking from customers to benefit the firm. The end result may be that a company does better on the balance sheet (at least in the short term), but customers are left worse off, and probably annoyed and feeling that they’ve been taken advantage of. While the articles above refer to the mobile phone carriers creating long voicemail instructions to purposely increase elapsed time for phone calls (and thereby increase profits at the expense of the customers valuable time), there are plenty more examples out there. (One of my “favorite” examples is the airline industry, which seems to take special delight in abusing their customers.) In the Harvard Business Review article, Mr. Haque claims this focus on “thin value” results in a “Zombieconomy” where no real value is created and society as a whole suffers.

Thick Value is the opposite of thin value. It creates sustainable, authentic, meaningful value that benefits all: the firm, customers, and society at large. Thin vs. thick value is really another way of describing those who play zero-sum games at the expense of their customers and collaborators, and those who believe in growing the pie to create shared value for all.

Of course since this blog is being written by a practitioner of The Way of the Source, I believe that we are in need of a better term to describe the value that Open Source communities create: Fat Value. I believe that Open Source practices are on the far end of the value equation, and that “thick” is not a strong enough word to describe the sort of value that we produce.

Take a minute to think about the value that open source communities create. Often open source software forms the foundational infrastructure of basic research and computing (e.g., Linux, VTK, ParaView, ITK, TubeTK, Slicer, etc.). It provides tools which educators can use to train the next generation, or which hobbyists can use to scratch their own itch. Because of its minimal IP requirements and agility, open source is used in all almost uncountable number of products and devices ranging from phones to supercomputers. And open source has spawned a multitude of service companies like Kitware which generate positive business activity and create the next generation of technical and scientific computing software.

Mr. Haque goes on to say that offering thick value is a strategic superweapon that innovators use to vanquish the mirage that thin value creates. It is a challenge facing all businesses in the 21st century, implying that firms that offer real value will thrive. So if you want to create something of real value, I heartily recommend that you work with the many open source communities out there, and open source firms like Kitware. In this way we can all work together to create Fat Value and combat the Zombie (economy) threat!!


3 comments to Combating the Zombie Threat

  1. This is very interesting because it does emphasize to me why we instinctively prefer dealing with some companies rather than others. Often it is the personal interactions with customer service that really count. To provide a concrete example: I had trouble with random mouse movement on my Dell Laptop. After many service calls and three onsite calls where the technicians replaced almost the whole computer the last technician suggested a rebuild of the MBR which worked. However the nice thing about the whole process was that even though the call centre had a set diagnostic process to follow they were prepared to listen especially when they could remotely connect and see the problem. I guess this flexibility reinforces the idea of “thick value” and is also encourages the customer to provide positive feedback.
    Listen to the customer and respond to them, treating them in a respectful way, not as a necessary nuisance, then they will provide support and bring in other clients to your company.

  2. I think this points to a more systemic problem in that profits are more important than product or service. I see so many companies who failed have crossed the line from someone who is interested in the original idea of the company to one who worries more about profits.

    This is why smaller companies who are successful fail after they are bought by a larger corporation, the larger corporation is always interested in profits. I played golf with an economics professor who said that over 80% of mergers/acquisitions fail. I know from personal experience it was from exactly this that my last company disolved. We lost focus, there was no product identity and every decision we made was to eek out some profit.

    This article explains alot about management, I could have sworn I saw some zombies on the top floor.

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