For more than three centuries, consumers' needs have evolved from the concrete (food, clothing) to the abstract (insurance policies, health care, travel). Consumption is now becoming even more abstract, as people seek control over the quality of their lives, not just the quantity of their stuff. This new consumption has gathered force at the margins of the economy and is now poised to redefine business. Hidden in the unmet needs of millions yearning for self-determination, voice, and trust lies a vast new world of economic and social value (I call it "relationship value"). Today's corporations are ill-suited for this world: They have perfected an inward-focused model based on efficiency and cost reduction that's designed to boost transaction value. That model has led to a downward spiral of undifferentiated goods and services, consumer mistrust, and employee resentment. But two successes in different arenas--the Vietnam Veterans Memorial and eBay--provide clues to a new inside-out model.
The young architecture student Maya Ying Lin turned tradition inside out when she designed the memorial wall. It has no truth to peddle. There are no statues or inscriptions intended to evoke a universal experience. Instead, the wall is home to many truths, where each visitor is invited to a private reckoning. The wall says, "You decide." It has realized immense social value (it's the most popular memorial in Washington, DC), but only because it treats every individual as the source of meaning, not its passive receptacle.
EBay also inverts traditional practice. Twentieth-century-style companies decide what you buy and how you behave. They profit when we follow their rules. EBay took a step through the looking glass. Its constituents define the company the same way that visitors define the Vietnam Veterans Memorial. EBay's "managers" cultivate a transparent medium through which buyers and sellers can meet their own aims. EBay (the eighth-fastest-growing U.S. company, worth more than McDonald's) makes money when it listens to and supports the dynamic needs of its users, building bonds of trust and commitment. It stumbles when it foists unpopular decisions on members.
With these examples in mind, here's a glimpse of some of the building blocks of wealth creation, 21st-century style.
Distributed assets We are the new source of value; it is distributed in our hearts and minds, dens and kitchens. New wealth and well-being are released as our yearnings are satisfied. This relationship value can only be "realized" in bonds of advocacy, trust, and commitment. It can't be "created" inside factories or offices. Concentration was the old means to create transaction value. But distributed assets (people, information, authority) will be the means to realize relationship value. This signals a shift from the old managerial capitalism to a new distributed capitalism.
The Inside Turned Out The new enterprise asks, "What can we do to support you?" not "How can we get you to buy what we sell?" Forget about what niche you're in, or even what industry. Instead ask, "Who will want us to support them, and what do they need?" Then figure out whom you need to collaborate with to make that happen. What was once at the center--the company, its managers, products, and services--spins out to the periphery. What was once the periphery--every person's unique needs--becomes the center. Wholly new support networks will cluster around individuals, families, and virtual communities with the sole purpose of backing their aims. EBay is one small step through this looking glass. Imagine hundreds of eBays, each one able to address the spectrum of your needs, from health care to home repairs, all on your terms.
Values Realized By Value When wealth creation depends upon authentic relationships of trust and advocacy, there's no more room for adversarial behavior that ekes out a profit at the expense of consumers, employees, and suppliers. In a support network, all behavior is aligned with the interests of the individual who pays. More alignment means more cash, more profit, and more individual well-being distributed throughout the network.
Voice And Visibility The only way enterprises can win trust is by ensuring that anyone can see everything. Relationship value also depends upon knowing what constituents want. The Web now makes both possible by providing channels for voice and dialogue. Anyone can track alignment with new measurements of trust, commitment, and advocacy. Enterprises that do this will get rich first.
Our new needs promise an escape from today's economic dead end. Business can invent its way out of the trap, but only if it steps through the looking glass.