THE ENTERPRISE
WE ARE IN UNCHARTED WATERS
One of the brightest people I know said it this way: "We are all in the dark on this situation, all we can do is look for the footprints and follow the correct path. We are living history and our grandchildren will learn from it." Since many readers are business people and investors, you are all wondering "what to do now?"
So am I. See, there is comfort in knowing you are not alone. Robert Galvin, retired former chairman of Motorola was speaking at an Industry Week Leadership conference a decade ago. I asked him to describe a leader. He answered, "A leader is someone people will follow to places they are afraid to go alone." What a wonderful and profound way to describe leadership.
As I watched our newly inaugurated President Barack Obama celebrate at Ball after Ball, I hoped he will be that kind of leader for our country. I missed the full text of his speech today, but I read the full text and it sounded like he was preparing the American people for the challenges that exist and the sacrifices that must be made. Part of the leader's job is to create a clear understanding of the current reality. This is a task that Obama's communications skills make him well prepared. His calm demeanor helps allay people's fears, even though his carefully chosen words describe the tough times with clarity.
WHAT CAN YOU DO? IN YOUR BUSINESS? IN YOUR CAREER?
First, don't despair--stay positive. Even a 4% drop in consumer spending means that consumers spent 96% as much as last year. That's not so shabby--is it? Yes, unemployment is at 7% and probably heading to 10%, but still 90% of people will be employed. Below, I have posted an excellent article from Reason Magazine by Senior Editor Radley Balko. He makes many good points. Perhaps, this recession can be viewed as a glass half-full instead of half-empty. Maybe this isn't the "end of life as we knew it." Maybe it is just a new beginning, as President Obama likes to say. I hope so. I know one thing: a positive mental attitude is a good starting point.
Please read this, and then, at the end of it, I will add some (I hope) useful tips to make your business and you more successful.
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Reason Magazine
The Good News From a Bad Year
Things are still getting better all the time
Radley Balko, January 1, 2009
Be prepared to see a lot of doom and gloom this week. Those year-end video and photo montages, year-in-review summaries, and "a look back" reflections are inevitably gloomy even in boom times. That's likely to be especially true in 2008, a year that, admittedly, wasn't particularly filled with hope (Barack Obama's campaign promises aside).
I recently heard a conservative talk show host bemoan the "lack of God in our society" as reason for, among other things, the recent "Santa shooting massacre" in Covina, California. The left, meanwhile, is pointing to the financial meltdown as indicative of a different kind of moral failing—the unbridled greed they associate with free enterprise.
Truth is, they're both wrong. The last 12 months may prove not to be the most fondly recalled in recent American history, but things aren't all that bad. Most social indicators are still moving in the right direction. In general, our standard of living continues to improve. Advances in technology are helping us beat the diseases most likely to kill us; giving us more leisure time; making us more comfortable; giving us more convenience; and with the Internet, putting much of the world—quite literally—at our fingertips.
So here's the good news:
Crime rates are still falling. Violent crime in America has been in a free-fall since the early 1990s, despite a slight uptick in 2005 and 2006. Economists, criminologists, and sociologists can't conclusively say why. Explanations range from the 1990s economic boom to changes in crime-fighting strategy to the legalization of abortion to reductions in childhood exposure to lead. Whatever the reason, long-term trends show crime is down across the board.
Sex crimes are down, too. Many conservatives and some leftist feminists often argue that the widespread availability of pornography and the "mainstreaming" of sex may effect an epidemic of sexual violence. It hasn't happened. Incidence of rape in America has been in swift decline for 20 years. In 2006, it hit its lowest point since the government started keeping statistics. Crimes against children have also been in decline. Both trends have taken place over a period in which there has been less social stigma attached to being the victim of a sex crime—meaning we're seeing fewer rapes, even as rapes are more likely to be reported. More interestingly, they've also taken place alongside the rise of the Internet, the medium that has done more than any other to mainstream and provide easy access to pornography, gambling, and a host of other vices. Somehow, society has managed to stay afloat.
Our allegedly sexualized culture hasn't had much effect in other areas, either. The divorce rate is at its lowest point in four decades. This is in part because people are waiting longer to get married. More women in the workforce means more women are waiting to get married. And they are getting married for the right reasons, not merely for financial security. It's hard to argue that society is worse off with strong marriages, even if that means fewer marriages over all.
Life expectancy is up. In June, the Centers for Disease Control announced that in 2006 (the latest year for which data is available), Americans once again set a record for life expectancy. Men, women, blacks, whites—all can expect to live longer today than at any point in American history. Discrepancies in the average age of death between ethnic groups are narrowing, too. All of those things we're told need heavy regulation because they're potentially killing us—obesity, alcohol, coffee, sodium, pollution, stress, cell phones—aren't doing a very good job.
We're beating our biggest killers. The same CDC report noted that mortality rates for eight of the 10 leading causes of death in America dropped in 2006. In fact, deaths from the two biggest killers—cancer and heart disease—have been in decline for a decade. Deaths from the third leading cause of death, stroke, are also down.
A generation ago, a cancer diagnosis was a death sentence. No more. In November the National Cancer Institute announced that for six years, both incidence of and deaths from cancer have been in decline, the first time that's happened since the organization began issuing its report. The drops were consistent among both sexes and across all ethnic groups, with the exception of American Indians, for whom incidence and deaths largely remained stable. In 1962, the 5-year survival rates for five of the 10 leading causes of childhood cancer were 10 percent or lower. Today, the survival rates for all 10 are at least 55 percent, and six are above 80 percent.
The kids are all right. Despite the periodic outbreak of moral panic over violent video games, MySpace, "rainbow parties," and dirty lyrics in rap music, America's kids are getting along just fine. Teen pregnancy was up slightly in 2006 (again, the latest year for which data is available), but that's after a 15-year decline to historic lows—again over the very period during which critics say our culture is overly sexualized. Since 1991, fewer teens are having sex, fewer are having sex with multiple partners, and more are using condoms when they do engage in intercourse. The abortion rate is also at its lowest point in 30 years.
Beginning in 1994, juvenile crime dropped dramatically for a decade. By 2004, juvenile crime was at its lowest point in a quarter century. The numbers edged up slightly in 2005 and 2006, but juvenile violent crime is still 40 percent lower than it was in 1994. The juvenile murder rate is a whopping 73 percent below its high in 1993.
We have more leisure time. Americans work on average eight fewer hours than we did in the 1960s. Believe it or not, lower-income Americans are actually more likely to spend time at leisure and less time on the job than their wealthier counterparts, suggesting that when we do work long hours, it's more likely to be because we want to than because we have to. We also seem to be enjoying ourselves more. We're spending more money per person on recreation. And the toys we do have (high-definition televisions, iPods, computers, sound systems) are immeasurably more fun than they were generations ago.
Doom and gloomers have been predicting the downfall of American society for generations. The last 20 or so years in particular have seen incredible advances in technology that have given us a wealth of new choices, exponentially enhancing our personal and economic freedom. The worrywarts fret that our society can't handle that sort of freedom—that prosperity and unlimited choices coupled with the absence of need will spell our ruin.
This year's headlines aside, we seem to be handling it all pretty well.
http://www.reason.com
http://www.reason.com/news/show/130861.html
Radley Balko is a senior editor at reason. A version of this article originally appeared at FoxNews.com.
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SOME SNIPPETS TO GET YOUR MIND UP TO DATE
A great use for Social Networks--comparing notes on Doctors and Medical care and conditions. Some groups of people are using the social networks to become mini-test sites for drug results, side effects, etc. Check out http://www.patientslikeme.com/
Pension costs will be a new "cost increase" challenge. Why? Because the drop in the equity markets will make them all unfunded, and require larger company contributions for a long time to come Plus forward returns based on actuarial assumptions will plummet and worsen the situation.
Local, state and Federal deficits will skyrocket. as tax collections plummet. Lower business results lead to lower tax revenues and most governmental costs are more fixed than variable. And even then, cutting services is unpopular and these organizations are run by elected politicians who want to be reelected.
Ad revenues are dropping like a rock. The most recent editions of magazines are thinner than ever. As I went through a few recent Business Weeks, I was stunned by how few ads there were. Newspapers are failing too. So are on-line ad expenditures. Look for some of the newer "Web. 3.0" and social network sites to struggle--because they are "free" and advertisers pay the bills--or not.
People like "home grown" service--so much so that Dell will try charging $12.95 a month to guarantee that its tech services you call are handled by a North American agent. Wow. Right? Or Risky?
Liquidators and liquidations are thriving--so, if you aren't liquidating, look for great deals on used everything from office furniture to equipment as companies shut down and cut back.
Severance? What's that? It is quickly becoming an artifact of the past as companies cut loose people with less and less of a safety net. Even though COBRA durations will probably increase in Obama's Administration, companies are cutting severance pay to the barest of minimums.
When the "tail wags the dog"--Apple is enjoying increased computer sales because there are so many iPods and iPhones out there. The iTunes store and iPods work so well with Macs, and Macs are now "Windows" compatible machines with Intel processors--so why not switch. All the popular software runs cross platform just fine: Microsoft Office, Adobe Acrobat, Quicken, Real Player/Windows Media Player, etc., etc. And Macs recognize most digital cameras immediately and import pictures into its great iPhoto software which allows editing, slide shows, etc.
A FEW THOUGHTS TO HELP YOU IN THESE UNCHARTED TIMES
Carefully study customers--current and prospective--to identify their needs, their wants, their dissatisfiers and what drives their decisions.
"Hook your wagon to the stars;" choose the customers who are most likely to win, succeed, and survive and go after them with all you've got.
Start with a PLAN--that is essential; then develop tactics (plays) to achieve your objectives.
When things don't go the way you expected, (in the football parlance) "run to daylight"--find the openings where you can make gains and take them.
You only have limited resources (people-time & money) available--spend them wisely--on worthwhile opportunities
Take care of your "500 lb. gorillas"--(that's your best people)--they are who will help you win, succeed, and survive.
Conserve your cash--getting more will be hard or impossible; spend sparingly, pay slow, collect fast, postpone all but true essential needs.
Spend company money like it was your own. In the long run, it is—because your future depends on it.
USE YOUR GOD-GIVEN SENSES
When you are in unfamiliar territory or lost somewhere, stop and look around--again and again. Sniff the air; listen intently. What do you see (hear, smell) that will help you figure out where to go, what to do. What do you NOT see (hear, smell)? Stop and reflect on what your senses are telling you. Often, it is what's NOT there that reveals a lot. Get out of your office. You won't learn nearly as much there as you will out in the "field"--with customers, watching end users or consumers, and LISTEN—not just with your ears, but with your EYES. After all, 70% of all communication in non-verbal. Body language, tone of voice, facial expressions, the eyes, hand gestures, posture, nervous movements, things the Poker players call "tells."
THE FUNDAMENTALS DON'T CHANGE
No matter how tough the environment, fundamentals are, well, fundamental. They seldom change much or at all. Nature contains a lot of lessons. Gravity is free; so is sunlight. Fewer parts usually cost less than more; lighter parts usually cost less than heavier ones; if one part can do the job of two, no assembly is required. You get the idea. And one last point--something I learned early in my career when designing computers (that didn't always work quite as intended)--when in doubt--make "it" 'look good' (in case "it" doesn't work as intended). Nobody likes to throw out something that looks good, especially if they already chose it, or bought it, or touted it to someone (especially their boss).
So there you go. Some tips. They all work. I know, because I've used them--in at least three recessions (early 1970's, early 1980's, late 1990's/early 2000's). But then every new one has new conditions and new solutions are needed--so do "what I meant, not exactly what I said!!" Good luck.
(NOTE: Next week's edition will either be late or "straddle" the next two weeks, as I am getting a little R & R time in this week.)
All the best, John
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