Power to the people

Customers are in control. Are citizens next? Patricia Seybold, in her new book, "The Customer Revolution; How to Thrive When Customers Are in Control," argues that "customers are wresting control of companies away from suppliers, and dictating the new business practices for the Digital Age."

Networks are driving the change in two ways. First, it is easy for customers to compare, and even to set, prices and services before they buy — eBay Inc. and Covisint are leading examples. Second, customers can swap notes with each other before buying. They can visit the GM Truck Lemon Center or a variety of forums on the merits of Nike's running shoes or labor practices.

The notion that customers are in control of companies has implications far beyond business. A recent article in the Financial Times argues that "consumer democracy, roughly defined as people's ability to vote with their cash," is displacing politics as the dominant expression of popular will about how society should look, citing the example of consumer reaction to the introduction of genetically modified foods in the United Kingdom. Prime Minister Tony Blair supported Monsanto Co.'s position that the foods were safe. But supermarkets ignored the politicians and responded to consumer concern by refusing to stock genetically modified foods.

On the service side, governments are talking about being "customer-focused." E-government service portals such as FirstGov are proliferating. Singapore's new site (www.ecitizen.gov.sg) offers 170 services and special high-speed connections for local citizens. But where government is a monopoly provider, the market driver that makes companies innovate is missing.

Or is it? Increased voter apathy is often seen as a symptom of government's declining legitimacy. Of course, much could be accomplished by improving the U.S. election system. (Most countries don't confine voting to a single day in the middle of the workweek.) But what if eBay is a relevant model to increasing citizen participation? Popular participation in issues of social concern is actually increasing. And networks are now the principal means of organizing populist campaigns against issues such as globalization.

E-government starts with information and moves to services. But soon this will not be enough. What is needed is to find ways of using the Internet to give citizens greater control over government itself.

The current economic slowdown suggests that the U.S. global leadership role now owes as much to U.S. consumers' buying decisions as to our diplomatic and military strength. To hone the old saw, when America sneezes, the world catches a cold.

It's time for government to wake up to the implications of the customer revolution to keep its constitutional mandate to "establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty."

McConnell, former chief of information policy and technology at the Office of Management and Budget, is president of McConnell International LLC (www.mcconnellinternational.com).


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