Helen Walters, writing at Thought You Should See This, relaying insights from Roger Martin, dean of Rotman School of Management at the University of Toronto:
The problem society faces, says Roger Martin, is that the best way to become rich is to trade value, not create value.
Trading value may be lucrative, but creating value through software can be tremendously lucrative too. Growing up I was often reminded I would work in a service economy. What I didn’t learn at the time was the role software would play in providing services.
It sounds almost silly to put it in these terms in 2011, but Internet-connected software products are services. Products like Facebook, Nike+, Siri, Square apps, etc. all provide a valuable service to their users. Developers and programmers make up a key organ in the service economy. The best part is software products are inexpensive to build and distribute but have the the potential to create as much value for the creator as trading value through equities or other investments. And the software is creating value for the user and society as well.
Here’s the advice Martin offers for creating value:
Focus on serving customers, not on maximizing shareholder value or on making money.
It may sound like that would get a CEO who does this would get fired, but the way you maximize shareholder value is not to think intently about making money. It’s to think intently about making great stuff. That’s what will make money, and thereby maximize shareholder value. Steve Jobs famously advocated laser-like focus on products people love instead of profits – and that may have been his most important insight in building his greatest creation. The most important thing he did after he returned to Apple in 1997? It wasn’t creating the iMac or the iPod. It was firing the whole board, which was a stipulation of his return as full-time CEO.
Any other board probably would have fired him for focusing on customers instead of profits.