There is No Shareholder Value in a Built-to-Flip World

October 25, 2014 at 10:58 AM Leave a comment

Paradigm shift is just another name for structural change in the marketplace. In the case of the Internet revolution, there have been seismic shifts in two out of four parts of the market at once…promotion and channels of distribution. The product and the price seem not to have been affected as much. Still, the technology upheavals have blown such a smoke-and-mirror show in the faces of the Wall Street pack that they have lost their vision for the future. A renewed interest in shareholder value is our only hope.

Flipping something in the market is fool’s gold. It is not even a zero-sum game, because as long as nothing remains in the long run except the fees paid to the brokers we will all be worse off. It triggers a slow downward spiral that cannot ever pay off in net, and, by the time anyone seems to notice it, the damages have already hit a dangerous level of acceleration.

So go the bubbles on Wall Street. Yet the world markets have been satisfied to ride the wave of a series of rising and falling tech stocks based on fads that hold the attention of the masses at any given time. “Getting” the new paradigm seems to presume that fundamentals no longer matter. Besides, no one under 30 has a prayer of a chance of connecting the words shareholder and value to anything meaningful.

The ugly secret to this game, besides its inherent uselessness, is that the only winners are insiders…not just fee-collectors, but the fund managers who have the clout to cheat and the arrogance not to care. Ironically, they are the keepers of capitalism, an economic game at which they totally suck!

Capitalism may have greed as its motivation, but it is not its own end game. And true capitalists wish to sustain themselves. Captains of industry build businesses that are meant to offer lasting shareholder value. They make real products, have a genuine competitive advantage, and reinvest profits in a research-based pipeline of next generation products to stay viable. They do not invest in 19th century work conditions in third-world countries and sit on their offshore profits while lobbying for yet another round of tax relief.

Yeah…this falls under the heading of Special Rants. I went to business school and worked in finance once upon a time. I got interested in education as a problem-solver. Yet one of the most frustrating aspects of education reform is the ability of tech toolies to continue to manipulate educators like kittens stalking a laser beam with newer and better apps while we continue to ignore our own fundamentals. Flipping through fly-by-night pedagogical tools is not reform.

Systemic change in education is not just possible, it is essential. We have the ability to use technology to eliminate obstacles to broad-based pedagogy and to inform ourselves with real data about finance, student outcomes, and educator effectiveness. Reinventing the business systems behind education can free us from the mythology that keeps educators trapped in myopic visions of success, dysfunctional management, and service to the bureaucracy instead of the mission of educational excellence.

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Entry filed under: Special Rants. Tags: , , .

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