Revenue Growth vs. Innovation

Yesterday's whipsaw of a market swing had me concerned, but only because of how little the "numbers" reflect whether we're taking the steps necessary to right the ship. 

Planet Money's Jacob Goldtein is exactly right in pointing out Why More Jobs = Rising Unemployment -our rosy view of job growth is a reminder that firms must replenish their human capital to realize lasting gains in the marketplace for goods and services.

Check out this gem from the WSJ (my empahsis added):

"Companies are still trying as hard as they can to achieve output gains without adding to their work forces," said Nigel Gault, an IHS Global Insight economist. "It's getting more difficult to do that." -"Productivity Continues to Rise but Breakneck Pace Slows"

If companies continue to please the short term desires of Wall st, we'll continue to see companies more worried about "hitting their numbers" than hiring the workers who will create the next generation of profitable products and services.

So in the short term we preserve the "good news" of profits, only to stew in the "bad news" later: underemployment, restrained innovation, and a shrinking tax base to pay for our ballooning gov't spending and colossal debt. 

Operational Transparency

In his Buzzmachine blog, Jeff Jarvis writes about a Continental Airlines choice of transparency over secrecy after flights were cancelled:

Continental is practicing operational transparency. It opened up information is already has to us, the customers, so we can be informed and empowered. This way, I’m not cursing the airline and its employees. I’m well aware that our flight might be canceled and that’s entirely out of Continental’s control, so I wouldn’t blame them. But every time this has happened in the past, I hated being in the dark; I hated being lied to by airlines; I simply want more information. And now an airline is giving it to me. Bravo for Continental.

Operational transparency is only possible when someone has sat down and calculated the benefit of the true information vs. the costs of its absence. Good on Continental in this case, and we should all look to say more when there is no serious competitive disadvantage to secrecy- hiding behind “approved messaging” will just keep your customers from taking your side.