Reading:: The Support Economy

Originally posted: Mon, 28 Jun 2004 17:55:29

The Support Economy: Why Corporations are Failing Individuals and the Next Episode of Capitalism

by Shoshana Zuboff and James Maxmin

Shoshana Zuboff's last book was In the Age of the Smart Machine, a really remarkable text that drew on several studies of workplaces to discuss essential shifts in work introduced by the computer. The point, despite the title, was not that "the computer changes everything" -- an overreaching claim that is sometimes made by more wild-eyed technology theorists -- but that automation has wrought some key changes in management and labor. Smart Machine is practically required reading for anyone interested in computers in the workplace.

Then there was a long, long hiatus. Zuboff, by her own account, held off on writing a second book until she could coherently discuss some phenomena that weren't adequately addressed by her first one. Now, she says, she can. Hence The Support Economy, written with her husband James Maxmin.

Zuboff is a professor of business administration at Harvard and Maxmin is a CEO, so it's not surprising that the book is very business-oriented and very concerned with the shape of business in the near future. It's also not surprising that this book is part of a larger effort that involves speaking engagements and consulting. What is surprising is the sheer scope and vision of the book, which attempts to predict and define a fundamentally new stage in capitalism.

Really. Zuboff and Maxmin claim that we are on the cusp of a genuine paradigm shift, a true realignment of thought that takes place at most once a century. The last time this happened was the birth of managerial capitalism at the turn of the 20th century, when Henry Ford realized that you could satisfy consumers by making lots and lots of the same thing, as long as you made it very very cheap. The essential enterprise logic led to the split between ownership and control: ownership was distributed across many shareholders, while control was concentrated tightly in the hands of CEOs. This led to what Zuboff and Maxmin describe as a "solar system" in which the company is at the center of everything; suppliers are in orbits farther out; and at the outermost reaches of the solar system are the customers. Customers might be given lip service, but ultimately they are forced to "contort themselves" and conform to the company's demands because, under this enterprise logic, the only way for the company to get ahead is to give everyone the same experience and to continue reducing the costs associated with that experience.

Zuboff and Maxmin, however, see the beginnings of a "Copernican revolution" that will reorient this solar system, placing the customers at the center. They envision a distributed capitalism in which control will be just as distributed as ownership -- distributed across the customers, that is. Digital technologies are a necessary but not sufficient condition for this Copernican revolution; other conditions include the individuation of consumption (i.e., the desire for unique identities and unique experiences), the consequent rise in relationship value, and the desire for deep support (i.e., stable beneficial relationships among consumers and producers that support these individual experiences). In this support economy, the existing enterprise logic is inoperative; supply chains are dismantled; professional relationship workers called "advocates" assemble temporary "federations" of suppliers for each individual transaction; and nobody gets paid until the customer pays. The last point is especially important because it is what ensures that control is distributed across the system and the customer remains the center of the new "solar system."

That summary doesn't do justice to this complex and well developed vision, and I encourage anyone to read through this book and see what you think. Especially the last three chapters, where the vision is clearly laid out. Bottom line, I had very mixed feelings when reading The Support Economy. On one hand, it does a remarkable job of pulling together and coherently discussing things that others have been discussing piecemeal: the individuation of consumption (Virginia Postrel's The Substance of Style, some of David Sless' work in Australia); Internet technologies meant to foster civic engagement (Spinuzzi, Bowie, Rodgers, and Li; Zappen); open systems meant to allow people to expand information systems (Spinuzzi and Zachry; Spinuzzi, Tracing Genre through Organizations); complex problem solving (Barbara Mirel's work, including her book); the question of how workers from different organizations form relationships and alliances (Nardi et al.; Engestrom et al.). Or just look at the rise of content management systems and other ways of customizing experiences and distributing control; the proliferation of ATMs; the tendency for large churches to place recordings of sermons online. Something is happening here, something big, and Zuboff and Maxmin give us an explanation of what it might be.

But on the other hand, their description of the support economy sounded like science fiction. In fact, it sounds a lot like a Bruce Sterling novel I read a while back. The underpinnings, the moorings of this new economy, seemed curiously two-dimensional. Maybe that's because, although Zuboff and Maxmin may be describing their ideal new economy, it doesn't sound very attractive to me. Consider the following:

1. The death of privacy. Our privacy, in tatters as it is, would disintegrate completely in this new economy. The thing about being at the outer reaches of the "universe" is that you can hide; in the support economy, everyone wants, needs, and shares your information.
2. The death of small business. Remember the cardinal rule that nobody in the federation of service providers gets paid until the customer releases the payment. Larger companies can get away with this because they have large budgets. Small businesses, which often ask for money up front and mark up the services of others in the supply chain, will get squeezed out. In fact, although the book provides numerous examples of small businesses finding niches that presage the support economy, they are absent from the description of the realized support economy and the illustrative examples of it. That's sort of a big deal in the U.S.
3. Smothering customers with kindness. A key member of the support economy is the "advocate," the person who forms and maintains long-lasting relationships with customers and who coordinates these ad hoc "federations" of suppliers. In one of the unintentionally disturbing passages of the book, Zuboff and Maxmin point to a real-life advocate, a woman who worked for an airline company and who was well known for going above and beyond the call of duty -- and was repeatedly disciplined for it. She would stand in the rain with tickets for customers who were running late; she would page customers with information about changes in their flights; she even visited a customer in the hospital during his cancer treatments. She, Zuboff and Maxmin tell us, is a forerunner of the advocates they envision being a key to the new economy. Am I the only one who finds this to be creepy? To me, this person came off as a bit unhinged and more than a little needy, and I shudder to think of an economy filled with them. Zuboff and Maxmin, by the way, tell us that people often prefer to deal with ATMs and e-commerce rather than human beings because they have been treated poorly by the managerial economy. That seems too pat. My pharmacist is a great guy who always remembers my name and my wife's, makes sure to have our prescriptions ready for us, and even tells me when he'll need to renew the prescription with the doctor. The service is really remarkable, and he's not needy at all. But I would replace him with a vending machine in a second if I could; I'd rather my transactions be quick, impersonal, and entirely controlled by me.
4. The centralization of functions. The federation model means that companies essentially split into modular units that concentrate on what they do best. Such a thing would be unthinkable in the managerial economy because it would require each group to have its own apparatus for accounting, payroll, and other managerial functions. But in the envisioned support economy, companies would outsource those services to other companies. In other words, functions that are now integrated within each enterprise would be consolidated and offered as services to each enterprise. That would squeeze a lot of redundancy and waste out of the system -- but paradoxically, it would mean more centralization rather than decentralization for those sectors. In the wake of Arthur Anderson's recent troubles with Enron, I worry.

I'm sure that Zuboff and Maxmin have answers to all of these objections, but in too many spots the future vision seems like handwaving. And in too many spots, the case against the old economy seems overmade. For instance, at one point, Zuboff and Maxmin make the point that women have been disadvantaged in the managerial economy. That seems pretty obvious. So why follow it up with page after page of statistics? Slimming these down might have shaved 30% off of this behemoth.

Enough. I've spent a lot of time on this review and discussed many objections simply because I think that this book is too important to ignore. You really ought to read it and see what you think. Whether you totally agree with it or not, you'll find a lot that sounds familiar, and you'll get used to that "a-ha" moment happening over and over again.

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