The Soul of Enterprise: Business in the Transformation Economy by THRESHOLD

Over the years, many fellows at VeraSage Institute have coined various laws, such as Baker's Law: Bad customers drive out good customers. In this episode, Ed and Ron will explore more famous, and infamous, VeraSage Laws.

In an ironic twist on Karl Marx's idea of the proletarian revolution, in today's capitalist society, labor trumps capital as the chief source of all wealth. According to The World Bank, 80% of the developed world's wealth lies in human capital. Today, knowledge workers themselves own the firm's means of production, in their heads. This is a seismic shift in our economy, the ramifications of which we are still trying to comprehend. Thinking in terms of human capital investors lends dignity and respect to the value of each person. The word "human" comes from the Latin Hominem, for man, and the word "capital" from the Latin caput, meaning head. In a strict sense, a company's knowledge is created only by individuals, albeit some are outside of the firm's employ, and thus no knowledge can be created without people. Join Ed and Ron as they explore why Wealth equals Knowledge and Growth equals Learning, or Das Intellectual Kapital, as Karl Marx might have written.

In 1997, Ron attended Disney Institute's professional development program: The Disney Approach to Customer Loyalty: Creating Service that Keeps Your Customers Coming Back. How does Disney create superior value for its guests? They have a foundation that is composed of three components: core competencies, core offering, and core customers. Here was the Walt Disney World Resort promise to its Guests in 1997: "We create happiness by providing the finest in entertainment to people of all ages, everywhere." Ron and Ed will discuss Disney's approach to customer loyalty, along with other exemplary companies that have a reputation of excellence in customer service.

The last Friday of every month Ed and Ron will do "Free-Rider Friday." Most of our shows are "topic" driven, where we dive deep into one subject. Free-Rider Fridays are designed to be "event" driven, whatever issues are in the news that we (or you) find worthy of commentary. In economics, free riding means reaping the benefits from the actions of others and consequently refusing to bear the full costs of those actions. This means Ed and Ron will free ride off of the news, and each other, with no advanced knowledge of the events either will bring up. If you'd like to call-in during the live show, the listener line is: 866-472-5790. You can also participate on Twitter at #ASKTSOE, @asktsoe, or email us at asktsoe@verasage.com.

Request For Proposals have become more commonplace as competitive bidding has replaced negotiation for price buyers. It is as if dysfunctional buying practices have arisen to counter dysfunctional selling practices. It is important to judge the seriousness of potential buyers going out to bid, as a lot of the RFPs are, in reality, nothing but hammers used against incumbents to obtain price concessions. That said, many firms have to do a certain amount of RFPs. If you do, you should be well versed with what economists call the winner's curse. In auction markets, economists refer to the dreaded winner's curse, whereby the winning bidder is often a loser, because obviously all of the other bidders believed the engagement had less value. In other words, the only request for proposals (RFPs) that buyers will accept are ones you should not make. Join Ed and Ron for strategies you can deploy to avoid the winner's curse.

Ron and Ed interview for a second time Father Robert A. Sirico, the president and co-founder of the Acton Institute and the pastor of Sacred Heart of Jesus Parish, both in Grand Rapids, MI. A regular writer and commentator on religious, political, economic, and social issues, Rev. Sirico's contributions have been carried by the New York Times, the Wall Street Journal, Forbes, the Washington Times, CNN, ABC, CBS, NPR, and the BBC, among others. In his recent book Defending the Free Market: The Moral Case for a Free Economy, Rev. Sirico shows how a free economy is not only the best way to meet society's material needs but also the surest protection of human dignity against government encroachment.

Back by popular demand, on Friday's show Ron and Ed will interview Tim Williams, a noted author, international speaker, and presenter for major advertising associations, agency networks, universities, and business conferences worldwide. Tim is author of the books, "Take a Stand for Your Brand: Building a Great Agency Brand from the Inside Out," ranked by Amazon as one of the top ten books on brand building; "Defining the Agency Brand," published by the American Association of Advertising Agencies is regarded as the standard in agency brand development; and his latest book is "Positioning for Professionals: How Professional Knowledge Firms Can Differentiate Their Way to Success." Tim is a major thought leader and consultant to advertising agencies worldwide, specializing in pricing, business model innovation, positioning, and strategy.

Hourly billing is deeply entrenched and has been widely used for decades, which proves is has some advantages. The case against the billable hour is not that it is not a profitable pricing policy. Rather, it's that hourly billing is suboptimal (if profitability and value creation is your goal), and its disadvantages outweigh its advantages. It has become, to borrow a term from the medical profession, an iatrogenic illness, that is, a disease caused by the doctor. Time is indeed precious; it's what we give up when we are at work, and thus professionals have started to think their lives are bifurcated into billable and nonbillable hours. But this focus is far too narrow. That value is not measured by time, but rather results. Hourly billing forces us to focus on the wrong measurement. Albert Einstein once wrote, "Our theories determine what we measure." Hourly billing is the wrong theory that measures the wrong things. Join Ed and Ron to find out why.

The last Friday of every month Ed and Ron will do "Free-Rider Friday." Most of our shows are "topic" driven, where we dive deep into one subject. Free-Rider Fridays are designed to be "event" driven, whatever issues are in the news that we (or you) find worthy of commentary. In economics, free riding means reaping the benefits from the actions of others and consequently refusing to bear the full costs of those actions. This means Ed and Ron will free ride off of the news, and each other, with no advanced knowledge of the events either will bring up. If you'd like to call-in during the live show, the listener line is: 866-472-5790. You can also participate on Twitter at #ASKTSOE, @asktsoe, or email us at asktsoe@verasage.com.

Companies use personality tests for a variety of purposes, such as employment screening, assessing leadership potential, fostering corroboration and teamwork, etc. The most widely used is the Myers-Briggs Type Indicator (MBTI), created by Pennsylvania housewife Isabel Myers. This particular test is utilized by 89% of the Fortune 100, given to 2.5 million people each year to identify strengths and enhance teamwork. The Minnesota Multiphase Personality Inventory (MMPI) was developed in 1946 to sort mental patients into diagnostic categories. It was then expanded in an attempt to describe normal people. Of course, popularity does not imply validity. What is worse, most companies keep these tests confidential so the data cannot be tested to determine effectiveness. These tests are also popular among consultants, who are paid good money to administer them in a convivial atmosphere. Helpful or hokum? We will attempt to answer in this week's show.