What will next year’s Labor Day look like?

Today is a strange Labor Day. The holiday was created as a way to get back to work. Yet the U.S. economy currently has a high unemployment rate, not counting those that have stopped looking for work and those that are independent and/or permanent contractors, whose work (or lack of) does not get counted in these statistics.

This unemployment is happening at a moment of incredible challenge (and, yes, opportunity). The challenges facing our nation (and our globe) include the need for sustainable energy production and use (to avoid wars and to save the environment), the need for sensible health care, the need for healthy food and the need for better education (I’m sure you can think of many more). Each one of these challenges represents opportunities that could fuel our economy for decades.

Yet here we sit. Paralyzed by assumptions and models that are failing us. We moved from the industrial to the knowledge era but haven’t adjusted our business tools. For decades, we have assumed that short-term profitability would lead to long-term prosperity. Shareholder value became the mantra to defend this short-term thinking-the assumption that a rising stock price built value even if the short term profit fixes ended up putting the whole company (and sometimes the economy) at risk. Look at the financial industry and the automobile manufacturers. They kept making money and no one asked about the long term.

This short term thinking was enabled, actually fueled, by the growing failure of our accounting systems. As computers came to play a bigger and bigger role in our economy, more of more of the “productive” capacity of a company went AWOL in the accounting model. It allows us to capitalize the computer itself but tells us nothing about what is going on inside of it. This means that if you manage a business, if you sit on a board of directors, if you invest your own or someone else’s money-you have to rely on your gut to figure out what’s going on.

The only hard metric of success produced by accounting today is revenue and profits. No balance sheet to measure the true health of the corporation. You have no concrete measures of the flow and value of knowledge inside those computers. No operating data to show the day-to-day progress of the organization.

It doesn’t have to be this way. That’s what the series I just finished on intangible measurement was all about.

So what needs to change so that next Labor Day we can say that we have an economy that is back on track, where our people are productive and where we are positioned to create a fuel an economic renaissance? Here are a few ideas:

• Get your knowledge into your management reporting, start using it strategically
• Create an atmosphere where your employees are empowered to do what they do better
• Take on new challenges in areas where you have expertise. Solve new problems or create better solutions to old ones.

The seeds of the future already exist. They are in the heads of your employees and in your collective knowledge as a company. Tomorrow, it’s time to get back to work and build a new economy. Hope to see you there.