Market Economics Inside Corporations:
how to eliminate backlogs and manage priorities rationally

Abstract

Principles of economics can transform an organization's internal resource-management processes from a bureaucracy into a dynamic marketplace.

Traditionally, resource decisions and controls -- budgeting, project approvals, and accounting -- are based on bureaucratic mechanisms such as committees and staff oversight. Budgets are given to suppliers to manage. Customers think everything is free and demand the impossible. Swamped staff are forced to set priorities, disempowering customers and perhaps undermining strategic alignment. And faced with a backlog and irate customers, staff find no time for research or professional development.

A more sensible governance process becomes evident when you view an organization as a business within a business that "sells" its products and services to customers throughout the corporation. Whether or not money actually changes hands, budget represents a "checkbook" that belongs to customers, not suppliers, until staff deliver their results. Customers defend the budget for their projects and services, set priorities, and live within their means. This leaves staff free to be customer focused and entrepreneurial.

This session describes how market economics can be applied within organizations, the various stages of evolution, and how to get started implementing a market-based internal economy.

Outline

* What is an internal economy?

* What goes wrong: symptoms of a dysfunctional internal economy

* How to make the most basic internal economy work

* More advanced types of internal economies that work even better

* A straightforward process for fixing your internal economy

Contact us to discuss your specific interests and requirements.