Value chain: it seems like such a nice concept. Yet, it is “old school.” In this so-called value chain, people, means, and time are pressed through and between organizations with just one single purpose: that there will eventually be someone who is willing to pay for the service or product for a higher price than your cost price. The manufacturers higher up in the value chain, and the suppliers who are lower down in the same chain, all perform the same trick. As long as the buyers in the value chain are not yet the consumers, a producer will try to produce something which he believes the last customer wants.
Via “terms and conditions,” the manufacturer pushes the entrepreneurial risks as far as possible down the chain towards the consumer. And, as a consumer at the end of the chain, we actually have no choice other than to purchase what rolls out. Don’t believe you have freedom of choice. The fact that there are seventeen different types of jam available – most of them made by the same machine – only ensures that you will consume more jam on your bread. Through all kinds of market research, we can determine the needs of buyers, so that we think we know what the end user really wants. Then, we mix it into something mediocre and offer this in all kinds of “self-competitive” versions.
This is not the same as real freedom of choice. What it is doing is keeping the product-driven profit chain going. It is the same with our governments. Politicians think they know what the people want. The platform (from any political color) is an average message of what is good for the citizen. After the electoral mix (or coalition formation) with other colors, policies are shoved into society through a policy chain from which many, many officials drain their income and whose ultimate added value can be strongly challenged. Value chain? Profit chain? Who wins? Who loses?
But we do have a problem. Time, people, and means are in short supply, particularly due to the archaic structure of our nations and organizations. The aforementioned Coase Ceiling constantly limits us. The corresponding thinking, in terms of value chains, does not offer a solution for the current economic crisis or for the future of our countries, our organizations, or ourselves.
In fact, the limitations of the Coase Ceiling are only getting stronger; we are swiftly and surely losing our traditional means. Once it’s gone, it’s gone forever. Fossil fuel reserves are depleting. Our money is gone – the traditional banking system is holding us hostage. Working people, a shrinking group due to the rise in the aging population, will still work with you, but no longer for you in traditional terms of employment.
In short, the value chain is, all in all, no more than a typical pyramid scheme, where the next one in the chain generously compensates the previous link, but remains in debt themselves. In most countries, pyramid schemes are a criminal offence…