Stocks and Flows

Follow a system’s Flows, and you’ll inevitably find places where resources tend to pool together. In this case, a Stock isn’t a certificate of business ownership—it’s a pool or holding tank of resources. A bank account is a good example of a Stock: it’s a pool of money waiting to be used. Inventories, queues of customers, and waiting lists are also

Hagel and Brown tell companies that they need to move “from monetizing stocks to monetizing flows”—that

Two Economies, Not One

As I have written in previous posts, the are two economies, not one. One is the Flow Economy that produces goods and services. The other is the Balance Sheet Economy that stores wealth

Money flows through a business in predictable ways. If you understand how revenue, expenses, receivables, and credit work, you can ensure that you continue to have enough Purchasing Power on hand to continue operation and maximize your available options. The Cash Flow Cycle describes how cash Flows (discussed later) through a business. Think of you

status is necessarily nebulous, it's much less of an abstraction than money. This is the basic currency of social animals: it can be traded, saved, invested, loaned out, or crystallised. Unlike health or knowledge capital, status is liquid—it can be readily exchanged for sex, information, money, or other favours.