How to manage the New Economy, from a humanist point of view.

1. LEADERSLEADERS OF THE NEWOF THE NEW
ECONOMYECONOMY
5 Dimensions5 Dimensions
Marcelo Bulk (marcelo@bkcolombia.com)Marcelo Bulk (marcelo@bkcolombia.com)

2. Why should we care about theWhy should we care about the
New EconomyNew Economy??
• In the past, many countries,In the past, many countries,
communities and companies didn’tcommunities and companies didn’t
see the approaching changes andsee the approaching changes and
their leaders couldn’t save them fromtheir leaders couldn’t save them from
the suffrage.the suffrage.
• Present demands are:Present demands are:
– Low costsLow costs
– Customer serviceCustomer service
– High TechnologyHigh Technology
– Office environmentOffice environment

3. The leader’s challengeThe leader’s challenge
• Cut costs, but without going against qualityCut costs, but without going against quality
and other demands.and other demands.
• Give force to customer service, investing inGive force to customer service, investing in
fidelity and commiting the customer in thefidelity and commiting the customer in the
organisation growth.organisation growth.
• Understand that technology is the neededUnderstand that technology is the needed
infra-structure to help other demands to beinfra-structure to help other demands to be
fulfilled.fulfilled.
• The leader knows his organisation relies onThe leader knows his organisation relies on
people, who are the same heart of it.people, who are the same heart of it.

4. Un poco de HistoriaUn poco de Historia
• Agricultural AgeAgricultural Age
• Industrial AgeIndustrial Age
– 1800 –1800 – First Industrial RevolutionFirst Industrial Revolution
– Siglo XIX –Siglo XIX – Second IndustrialSecond Industrial
RevolutionRevolution
• ComCommmercialercial AgedAged
– First “shaken” into the OldFirst “shaken” into the Old
Economy, based in goods andEconomy, based in goods and
capitalcapital
– The concept ofThe concept of SERVICESERVICE waswas
enforcedenforced
• Information AgeInformation Age
– New Economy First fall: 2000New Economy First fall: 2000
(NASDAQ)(NASDAQ)
– Second New Economy fall: 2003Second New Economy fall: 20031983, 30th. May
The term comes in Time Magazine

5. From Old to NewFrom Old to New
• It is a change from the Old Economy –It is a change from the Old Economy –
structured on industrial goods – and thestructured on industrial goods – and the
New Econony – structured on theNew Econony – structured on the
information.information.
• Even though the termEven though the term New EconomyNew Economy is not 100%is not 100%
accepted, there is no doubt hat it helps us to createaccepted, there is no doubt hat it helps us to create
a frame for today world.a frame for today world.
• In the beginning, it only meant the basic infra-In the beginning, it only meant the basic infra-
structure that allows consumers and companies tostructure that allows consumers and companies to
deal and trade around the globe.deal and trade around the globe.
• Initially, it was restricted to the United States andInitially, it was restricted to the United States and
its economy specially that which is linked to theits economy specially that which is linked to the
technology of information and communication.technology of information and communication.
• Slowly, it is accepted in a wider range, signalling aSlowly, it is accepted in a wider range, signalling a
behavior of an economy where technology andbehavior of an economy where technology and

6. Technology, the engineTechnology, the engine
Moore Law
Technology has become the
“people’s science” and it has
pushed the Information Age just
like engines pushed the Industrial
Age out of the factories.
One of the reasons is the cost of
the tech elements. The Moore
Law has foreseen this. In fact,
sending 1 trillion bits three
decades ago has reduced from
US$ US$ 150,000 to US$ 0.12.

7. OldOld EconomEconomy versus Newy versus New
EconomyEconomy
• Offer/demandOffer/demand
• ControlControl
• Distance is importantDistance is important
• Mass productionMass production
• ProductsProducts
• PredictiblePredictible
• It is based in the IndustrialIt is based in the Industrial
RevolutionRevolution
• ConsumismConsumism
• Value comes withValue comes with
abundance (moreabundance (more
availability/more sales)availability/more sales)
• CollaborationCollaboration
• Distance is not soDistance is not so
importantimportant
• Relationships with theRelationships with the
communitycommunity
• ServiceService
• ExperimentalExperimental
• Information AgeInformation Age
• Experience and useExperience and use

8. Value according toValue according to ……
• It is assigned accordingIt is assigned according
to physical factorsto physical factors
(parts, etc.)(parts, etc.)
• Non-physical costsNon-physical costs
(labour and design) are(labour and design) are
minimalminimal
• Formula: an objectFormula: an object
value is the sum ofvalue is the sum of
those obvious partsthose obvious parts
• A complex interaction ofA complex interaction of
obvious parts andobvious parts and
intangibles (design,intangibles (design,
engineering, brand)engineering, brand)
• Formula: it is more thanFormula: it is more than
the sum of the parts – athe sum of the parts – a
bit of chemistry andbit of chemistry and
magic; it includesmagic; it includes
knowledge and emotionknowledge and emotion
Old Economy New Economy

9. Probable value distribution inProbable value distribution in
the New Economythe New Economy
• Creation of knowledge (innovation) – 10%Creation of knowledge (innovation) – 10%
• Coordination (marketing, distribution,Coordination (marketing, distribution,
administration, etc.) – 20%administration, etc.) – 20%
• Internal knowledge transference – 3%Internal knowledge transference – 3%
• Production routine – 14%Production routine – 14%
• Control, supervision – 8%Control, supervision – 8%
• Direct production – 20%Direct production – 20%
• Internal transport, assets – 3%Internal transport, assets – 3%
• External purchases of service – 22%External purchases of service – 22%
As customers, we start to understand the intangible aspects of
the product, like prestige and brand. As suppliers, we find that
understand how to do it is more importan than doing it.

10. New Economy – creating aNew Economy – creating a
frame Iframe I
• 44 key-key-concepts:concepts:
– CoordinaCoordinattiioonn
– InnovaInnovattiioonn
– SelecSelecttiioonn
– LearningLearning
• Essencial eEssencial elements:lements:
– Digitalization and intensive use of informationDigitalization and intensive use of information
– Knowledge codificationKnowledge codification
– Transformation of the information in a means ofTransformation of the information in a means of
profitprofit
– New ways to organise the work and productionNew ways to organise the work and production

11. New Economy – creating aNew Economy – creating a
frame IIframe II
• Defining wordsDefining words::
– Information SocietyInformation Society
– Digital EconomyDigital Economy
– Knowledge-base SocietyKnowledge-base Society
– Net EconomyNet Economy
• NewNew expresexpresssions:ions:
– 24/7/36524/7/365
– BlackberryBlackberry
– Extreme jobExtreme job
– Knowledge workersKnowledge workers
– Emotional InteligenceEmotional Inteligence

12. The NewThe New ParadigmParadigm
• A paradigm is created based in twoA paradigm is created based in two
soucressoucres::
• KnowledgeKnowledge
• ExperiencExperiencee
• Apart from the knowledge formerlyApart from the knowledge formerly
given, let’s know more from thegiven, let’s know more from the
globalised world where we live.globalised world where we live.

13. A few data of our planetA few data of our planet
• 30%30% of the world population don’t haveof the world population don’t have
proper food yetproper food yet..
• Every year, 25 million people in the worldEvery year, 25 million people in the world
goes down the poverty level.goes down the poverty level.
• 1.3 billion of people live with less than US$ 11.3 billion of people live with less than US$ 1
per day.per day.

14. What is going on in the workWhat is going on in the work
areaarea
• There is around one billion unemployed people orThere is around one billion unemployed people or
people who are not formally employed.people who are not formally employed.
• An increase of time in work during the week forAn increase of time in work during the week for
women: now they work 44 hours (from 39 hours inwomen: now they work 44 hours (from 39 hours in
’77).’77).
• An increase of time in work during the week forAn increase of time in work during the week for
men: now they work 49.9 hours (from 47.1 hours inmen: now they work 49.9 hours (from 47.1 hours in
’77).’77).
• In recent researchs, executives prefer a job withIn recent researchs, executives prefer a job with
less hours and more quality of life.less hours and more quality of life.

15. TheThe JapJapaann casecase
At the end of
the Crisis:
In 2002,
there were
160 cases of
death for
work excess
(43
suicides).

16. Now, let’s see our experienceNow, let’s see our experience
• Try to identify what happend in your careerTry to identify what happend in your career
in the last 20 years.in the last 20 years.
• Identify the organisations where you haveIdentify the organisations where you have
worked, which experience did you haveworked, which experience did you have
there?there?
• Try to establish some pattern from thoseTry to establish some pattern from those
experiences.experiences.

17. From hereFrom here……
• In the point you are today, what canIn the point you are today, what can
be foreseen in the future?be foreseen in the future?
• Which important elements do youWhich important elements do you
have to face this future?have to face this future?
• What is lacking to you to live theWhat is lacking to you to live the
future?future?
• What can you do to create the future?What can you do to create the future?
• Is there any future threaten you canIs there any future threaten you can
foresee?foresee?

18. TheThe TransformaTransformationtion
• In reality, the economy is in theIn reality, the economy is in the
transformation process, draging with ittransformation process, draging with it
the whole civilisation.the whole civilisation.
• This has happened whenever an AgeThis has happened whenever an Age
changed. And in all changes, leaderschanged. And in all changes, leaders
emerged who enabled us to reachemerged who enabled us to reach
where we are today.where we are today.
• Are you this leader of the newAre you this leader of the new
paradigm?paradigm?

19. The ChangeThe Change
• This is how we call the transformationThis is how we call the transformation
process.process.
• There are 3 types of change:There are 3 types of change:
– TransiTransittiioonn
– CrisisCrisis
– CChhaosaos
• How leadership works with each typeHow leadership works with each type
of change?of change?

20. The leader in the TransitionThe leader in the Transition
changechange
• Few changes, low impact orFew changes, low impact or
previsible impact changes.previsible impact changes.
• It is the case of monopolies whichIt is the case of monopolies which
keep power, but changekeep power, but change
something in their image, or usesomething in their image, or use
sale promotions.sale promotions.
• The leader has little impact,The leader has little impact,
he/she is more a boss thanhe/she is more a boss than
anything.anything.

21. The leader in the CThe leader in the Crisisrisis changechange
• Many changes, high impact orMany changes, high impact or
imprevisible changes. Normally, in aimprevisible changes. Normally, in a
short time.short time.
• This is the case of the finantial crisisThis is the case of the finantial crisis
of many countries, or the moral crisisof many countries, or the moral crisis
that affects the world.that affects the world.
• The leader is fundamental. He/she isThe leader is fundamental. He/she is
the one who can help to go out of thethe one who can help to go out of the
crisis or, at least, to live with i and findcrisis or, at least, to live with i and find
viable alternatives.viable alternatives.

22. The leader in the Chaos changeThe leader in the Chaos change
• Too many changes or huge impactToo many changes or huge impact
changes.changes.
• It is the case of tragedies as theIt is the case of tragedies as the
Twin Towers of the Asian Tsunami.Twin Towers of the Asian Tsunami.
• The leader doesn’t have a role inThe leader doesn’t have a role in
there. He/she should, much before,there. He/she should, much before,
create a group of “self-leaders”,create a group of “self-leaders”,
capable to handle surviving beforecapable to handle surviving before
chaos.chaos.

23. Leadership in the NewLeadership in the New
ParadigmParadigm
• Present paradigm has two basicPresent paradigm has two basic
complexities:complexities:
– It is still in the process of formationIt is still in the process of formation
– It has an unaccounted number of criteriaIt has an unaccounted number of criteria
• Due to that, the leader has to use theDue to that, the leader has to use the
elements he/she has, which enable him/herelements he/she has, which enable him/her
to run the organisation in times ofto run the organisation in times of
uncertainty.uncertainty.
• One of the elements is to understand the 5One of the elements is to understand the 5
forces that affect the work of theforces that affect the work of the
organisation.organisation.

24. Leadership in the NewLeadership in the New
ParadigmParadigm
• Apart from that, to understand theseApart from that, to understand these
forces not as something contrary or aforces not as something contrary or a
kind of resistence, but something thatkind of resistence, but something that
will help in the organisational visionwill help in the organisational vision
fulfillment.fulfillment.
• So, instead of calling them FORCES,So, instead of calling them FORCES,
we will call them DIMENSIONS.we will call them DIMENSIONS.

25. The DimensionsThe Dimensions
• Classicaly, This expression is refered to theClassicaly, This expression is refered to the
space-time we work. For instance, wespace-time we work. For instance, we
experience 2 dimensions on the earth (wideexperience 2 dimensions on the earth (wide
and long) and 3 in the water or air (addingand long) and 3 in the water or air (adding
depth and height). Some people considerdepth and height). Some people consider
time as another dimension.time as another dimension.
• In the organisations, there are 5 basicIn the organisations, there are 5 basic
dimensions, apart from those we talkeddimensions, apart from those we talked
briefly. They are the key for a goodbriefly. They are the key for a good
leadership and success in business.leadership and success in business.

26. TheThe 5 Dimensions5 Dimensions
Superiors/Superiors/ shareholdersshareholders
Work-teamWork-team
Internal CustomersInternal Customers
External customers/suppliersExternal customers/suppliers
The SelfThe Self

27. TheThe 5 Dimensions -5 Dimensions -
SuperiorsSuperiors//shareholdersshareholders
• They are the owners of the vision andThey are the owners of the vision and
strategy.strategy.
• The leader has a commitment withThe leader has a commitment with
them as he/she was hired for thethem as he/she was hired for the
company to follow a strategy and fulfillcompany to follow a strategy and fulfill
a vision.a vision.
• To conquer them, the leader needs toTo conquer them, the leader needs to
generate RESULTS and to havegenerate RESULTS and to have
proposals aligned with the vision.proposals aligned with the vision.

28. TheThe 5 Dimensions –5 Dimensions –
The work-teamThe work-team
• They are the ones who will putThey are the ones who will put
strategies into practice, bringin visionstrategies into practice, bringin vision
about.about.
• The leader needs to positionThe leader needs to position
himself/herself with the team so thathimself/herself with the team so that
he/she can fulfill what is needed.he/she can fulfill what is needed.
• To run a team, the leader needs TOTo run a team, the leader needs TO
DEAL THEM KINDLY and WITHDEAL THEM KINDLY and WITH
COHERENCE.COHERENCE.

29. TheThe 5 Dimensions –5 Dimensions –
Inner CustomersInner Customers
• They are the ones who will supportThey are the ones who will support
the team from inside.the team from inside.
• The leader needs to generate aThe leader needs to generate a
friendship and mutual support policyfriendship and mutual support policy
to prevent obstacles to get theto prevent obstacles to get the
objectives done.objectives done.
• To satisfy the inner customers, theTo satisfy the inner customers, the
leader needs TO HAVE GOODleader needs TO HAVE GOOD
RELATIONSHIP and EFICIENCY.RELATIONSHIP and EFICIENCY.

30. TheThe 5 Dimensions –5 Dimensions –
External customers/suppliersExternal customers/suppliers
• They are the ones who will make theThey are the ones who will make the
results.results.
• The leader needs to generate anThe leader needs to generate an
attitude of service with both,attitude of service with both,
customers and suppliers.customers and suppliers.
• To satisfy them, it is necessary aTo satisfy them, it is necessary a
SERVICE and GOOD EXTERNALSERVICE and GOOD EXTERNAL
RELATIONS policy.RELATIONS policy.

31. TheThe 5 Dimensions –5 Dimensions –
The SelfThe Self
• Self-leadership is fundamental toSelf-leadership is fundamental to
overcome various situations.overcome various situations.
• It is within where the true leadershipIt is within where the true leadership
spirit and the vision are born and it isspirit and the vision are born and it is
there where the strategies arethere where the strategies are
idealised.idealised.
• For self-leadership, the leader needesFor self-leadership, the leader needes
SELF-CONTROL and a CLEAR LIFESELF-CONTROL and a CLEAR LIFE
MAP.MAP.