Anyone interested in the breakdown of the Fordist model of American productivity and the ideas jostling to replace it should read Adam Davidson’s piece in the New York Times Magazine, “What’s an Idea Worth?” It demonstrates something that we’ve long been observing here at Via Meadia: the industrial conception of how to organize and evaluate work has become obsolete in every service profession from teaching to medicine and law, and new ideas are needed.
The article profiles Jason Blumer, a young accountant who noticed that the factory work template that still shapes his profession is costing both accountants and their clients too much time and money. Among other things, his firm has done away with the hallowed billable hour, which he sees as a hindrance and artifact from an economic age long gone:
Just as Apple doesn’t want to be in the generic MP3-player business, Blumer didn’t want to be just one more guy competing to charge a few hundred dollars an hour to do your taxes. A few years ago, he said, he realized that the billable hour was undercutting his value — it was his profession’s commodity, suggesting to clients that he and his colleagues were interchangeable containers of finite, measurable units that could be traded for money. Perhaps the biggest problem, though, was that billing by the hour incentivized long, boring projects rather than those that required specialized, valuable insight that couldn’t (and shouldn’t) be measured in time. Paradoxically, the billable hour encouraged Blumer and his colleagues to spend more time than necessary on routine work rather than on the more nuanced jobs.
But those complex problems were the ones that Blumer wanted to solve, and he also knew his insights were more valuable than the time it took him to conjure them. So he identified a niche — creative professionals who struggled to manage their finances as their start-ups became mature businesses — and he endeavored to help his clients make (and save) enough money that they would gladly pay a significant fee without asking about the hours it took him to figure out what to do. Blumer has been so successful in his approach that he has become a leading voice among a national band of accountants who call themselves the Cliff Jumpers. Many Cliff Jumpers have abandoned the traditional bill-by-the-hour approach to focus on noncommodity accounting solutions for specific client groups. One focuses on entrepreneurs hoping to sell their new businesses; several work with people who are terrified about starting a small business.
As the article notes, the “billable hour” is a concept that came from a 1950s economy where service professionals charged fees by simple, predictable units of time, allowing productivity to be organized and measured “as mechanically as a conveyor belt managed its throughput,” as Davidson puts it.
This is no longer the economy we have—many of these jobs are being done more efficiently and cheaply by computers—yet it’s still the way many of our service professionals think of work. Creative thinkers like Mr. Blumer and others like him will eventually lead us out of the crumbling blue model. A more dynamic, efficient, and prosperous economy awaits.
Read the whole thing here.
[Image of blue box courtesy of Shutterstock]