Super Efficiency Upsourcing Cost Effectiveness in Virtual Organizations and Businesses for a Zero Monetized Society

1 March 2009

Effective Living

Effective Living

Summary. We’re all familiar with the idea of some automobiles providing very poor fuel efficiency and others being very fuel efficient. In the near future, through improvements in fuel use, and by using alternative fuels and energy sources, it might be possible for a vehicle to travel 1000 kilometers (620 miles) for what we are currently paying to travel a single kilometer (.62 miles). This kind of super efficiency in vehicles is certainly a possibility. Could there one day be a vehicle that costs practically nothing to operate? The bicycle is an example of zero cost transportation, but it’s inadequate for some travel needs.

Applied Models of Efficiency. What if we were to apply the principles of automobile fuel efficiency to an organization: making the organization smaller, lighter, and more aerodynamic. Applying new practices of engineering to manage the work flow and reach the stated goals. What would we end up with? An example of this is the Small House Society – a global organization with reach into over 100 countries that has gained national media attention and global awareness. The Small House Society operates on a few hundred dollars per year with essentially no staff or employees. Members are given the opportunity to make a voluntary donation of $5 per year. Automated funds transfers through PayPal eliminate handling of cash. Tasks that would normally be labor intensive (mailing list management for example) have been automated. Services that would normally be very expensive have been upsourced to free services in the Internet cloud. For example, tools to assist people in collaborative collective workgroup communications (such as Yahoo Groups) are now free. The result is a free floating organization, seemingly suspended upon air. The ability for an organization to operate on almost nothing is an indication of a general trend toward a zero monetized society. This organization and business model is similar to that of freeware or open source software that encourages users to donate money but doesn’t require it. These micro-organizations around the world collectively have a huge impact. Small doesn’t necessarily mean small impact.

Self-Fulfilling Minimalization. The smaller an organization becomes, the less overhead there is. For example, if there are no employees, no corporate headquarters, and no overhead, this reduces the need for infrastructure and finances. Hire a CEO, and a staff for that CEO, and pretty soon you need salaries. Then you need an accounting department, and a human resources department, and a payroll department, and a legal department. This infrastructure is all self-referring and self-serving, and does nothing to directly achieve the stated goals, yet demands huge sums of money. Meetings will be needed to identify strategies for optimizing collaborative teamwork in achieving the organizational goals. An office building is required for all of the people working for the organization. Landscaping will be needed for the building, and a team of building maintenance staff will be needed. Yet, ultimately, not much more is accomplished. You’d still, in a good year, be hoping to reach into over 100 countries and hoping to gain national media attention and global awareness. Welcome to the world of virtual organizations.

Zero Monetized Society. As this organizational model of super efficiency is applied to businesses, downsizing takes place. Imagine a company that begins laying off employees by the hundreds. Efficiency and automation lead to greater productivity with less labor. One day, the owner and CEO get laid off. When they close the door, there is a hollow echo in the building before the wrecking crew come to tear it down. Yet, the organization or business continues to grow and thrive – without walls. “How can this be?” you ask? It’s already happening. In a world where organizations and businesses are run on less and less overhead, the cost of their products and services can be reduced. The transition to a zero monetized society is a very difficult one. Until product and service costs drop, millions of people would be unemployed and unable to pay for products and services which would still be priced based on pricing from a previous century. Some business owners would greedily take advantage of the situation and charge the same prices or more for products that cost the same or less to deliver. The increase in gasoline prices is an example of this.

Zero Monetized Thinking. The greed-based business model seeks to reduce operating costs (through layoffs for example) and increase profits (money to owners and shareholders). The new thinking of zero monetization is to reduce operating costs, and reduce profits with a goal of offering your product or service for little or nothing to the consumer (not at a loss, but at a zero sum game or better yet, a win-win game). The question is this: When a business owner figures out a way to reduce production costs through models of efficiency, should the profit (millions of dollars) go to that one individual, or should the cost of their product or service be reduced distributing the wealth to society? As a child, where did that business owner get their education, their food, their clothing? We are all born from society (our second womb), shouldn’t the benefits that life gives us be returned to society? There is a motto that some businesses live by: “passing the savings on to our customers.” This meant that business owners would keep their salaries low, and any savings on operating costs or through reduced labor needs and automation would be passed on to society. This is the thinking of moving toward zero monetization.

Powering Down the Monetized Society. Many services are now free to millions of people that in the recent past would have been too expensive and inaccessible. As this trend continues, we are witnessing the powering down of the monetized society.

  • Cars. In some markets, advertisers are paying a significant amount of money to those who are willing to drive a “wrapped car” (a car completely covered in advertising). What would otherwise be paid toward space on a billboard is paid to owners of vehicles. If sufficient income were to be received, to make the payment on the vehicle, the car could be free. Why not just have the company give away cars with their advertising on them.
  • Global Video Communications. Ten years ago, international video conference calls were either impossible or would have cost hundreds of dollars for a conversation. Today this service is free for unlimited use through Skype.
  • Movies. Going to the movies could cost $10 per person, movie downloads are $15, DVDs are $20 or more. Yet, now, with services like Hulu, movies are free to view.
  • Music. Music has been a multimillion dollar industry. Download 1000 songs at about $1 per song and you’ve spent $1000 in music. The Apple iTunes music store has had 6 billion downloads. Increasingly, services such as Deezer are making it possible to listen to music for free.
  • Online Research Systems. In 1979, online research data services like Lexis were charging $100 to $200 per hour. Today Google is much more powerful and free for unlimited use.
  • Social Networking. In the past, connecting to people with similar interests online would require paying monthly membership fees. Today, better services exist and are free such as Facebook and LinkedIn.
  • Software. When first introduced, Windows Vista Ultimate had a price tag of over $500 and a full suite of Microsoft Office Ultimate is about $700. By contrast, Ubuntu Linux and Open Office are free, and some would say are better. Many of the applications available for the iPhone are free.
  • Website and Content Hosting. In the past, having a website, even a very simple one, could have cost thousands of dollars to setup, maintain, and host. Integration of video, photos, blogs, other storage and bandwidth intensive content was very costly. Today, website hosting can be found for free (Microsoft Office Live Free Website or WordPress.com), and content specialized services offer hosting for photos (Picasa or Flickr.com) and video (Google Video or YouTube).
  • Workgroup Collaboration. In the past, online workgroup collaboration was very expensive. Now it is free through Google Groups and Yahoo Groups.

Cascading Effect. Individuals, businesses, and organizations that rely on the above growing list of free products and services will have reduced costs creating a cascading deflationary spiral to zero monetization – yet a state of abundance and prosperity. In the movie Phenomenon, the character played by John Travolta arranges a barter system whereby no money changes hands, yet people continue doing their work and everyone gets the products and/or services they need.

“They’re still using money. We’ve got to find some.” – Captain Kirk, Star Trek 4 (at 40:14 min:sec)

About Gregory Johnson

Greg Johnson is a freelance writer in Iowa City and also the founder and Director of the ResourcesForLife.com website. He also manages IowaCityWebDesignArtist.com and many other topic specific websites.

View all posts by Gregory Johnson
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