Management Excellence by Art Petty

Note from Art: I’ve moved dangerously close to some controversial territory in this post.  I like that.  While my daily dose of wild-eyed optimism is not visible here, my core premise is always that the glass is half full and the most difficult problems are capable of being solved.  Our current and long-term economic challenges here in the U.S. are solvable, but as time moves on and critical missteps made, the solutions become increasingly difficult to conceive and implement.

Ghosts of the Economy

You’re to be forgiven if you’ve walked into a coffee shop, cafe, library or anyplace else where those “between jobs” congregate, and felt a chill run down your spine. It’s one of those feelings that we get when we sense that something is wrong but we can’t quite put our finger on it. Like the characters in Henry Miller’s The Turn of the Screw, it’s the flicker in the corner of our eye and the haunting sense that we just saw a ghost.

Most of us don’t know why we get that uneasy feeling as we look around at the tables filled with coffee drinkers busy reading, talking or pecking away at their laptops. Perhaps it has something to do with the time of day and the size of the crowd.

Why aren’t these people working?

The shops are filled with good, talented, motivated people used to going somewhere every day and feeling needed and part of something. They are the same Moms and Dads used to bringing home a paycheck, stashing some money in the college fund, paying the bills and using the extra for a vacation or a new car. That stuff is on hold for now.

You don’t notice it as much in the newly unemployed. Their emotions run from panic to anger to optimism. Some promise to “take a few weeks off” and enjoy the freedom from the rat race. Others get down to work quickly on their resumes and networking activities. Mostly, they meet for coffee with those in similar situations.

It’s the ones that have been out for a few months or longer that give you that strange sensation. There’s something different about them. They are the same formerly productive, needed, vibrant people reduced to shadows of their former confident selves. The strength is faded just a bit from the voice, the shoulders are just slightly slumped and the spark in the eyes doesn’t seem to burn with the intensity of prior days.

We’re watching as people are turning into ghosts of their formers selves. No, not the ghosts of myth. These ghosts still take up space and consume and breathe, but nonetheless they are noticeably transparent, moving through the ether with the rest of us, but not having the same impact on life and the physical environment.

The transformation accelerates as people take refuge from the cafes and coffee shops and begin to barricade themselves inside their homes, in front of the television or computer screen. CVs still get sent, but people are going through the emotions. After a lifetime of focus and purpose…sometimes no more than needing to be somewhere at a certain time to do their part…big or little, there is nothing.

The Ghosting of America

I doubt that my use of the word, “Ghosting” is accurate, but it feels right here. While critics of my commentary above will accurately highlight that unemployment is nowhere near levels of the Great Depression and that there are encouraging signs on the economic front, it’s hard to ignore the ghosts around us.

Some are waiting for the economic stimulus to kick in. We all hope that something works, but the confidence isn’t there, because there’s little substance behind it.

My own unofficial observation is that we are in serious danger here in America of becoming a nation with great roads to support the movement of everyone else’s goods. Roads everywhere are under construction and big orange signs proudly reference ‘We’re putting America to Work!” They credit one of the many trillion dollar recovery acts at work.

I like good roads. Our improved infrastructure will ensure that deliveries of non-U.S. goods get to us quickly and in good condition. Meanwhile, is one more factory being built to support the research, development and manufacture of something that someone is willing to pay for, or are we focusing for now on the roads?

Lenin was Right, Kind Of:

Instead of selling the rope to hang ourselves with, we sold the ability to know how to make the rope to someone else, so that we could buy the rope and metaphorically hang ourselves.

There’s a great deal of discussion recently in the business press about the sad discovery that as we deftly exported our manufacturing in the name of cost and competition, we successfully gave away something called the “Commons.” While the term is a bit abstract, it references all of the ancillary activities, technologies and know-how that surround core industries.

It starts with moving manufacturing offshore and ends up with not only the manufacturing and the suppliers, but the research and development and future “know how” that we’ve given up. The product begets companies improving the product and others seeking to leverage the know-how and innovations in other products. Soon, the place where the idea started is administering and no longer fostering and facilitating new idea generation.

After the ability to make is gone, the ability to create begins to fade.

A number of articles have been published showing that American firms in America cannot and could not manufacture the Kindle device that I read the Wall Street Journal on this morning. We don’t have the know-how, the access to the intellectual property and the physical facilities to produce.

Ooops, I just received an e-mail update on a new road construction project starting here in Illinois thanks to some nitwit’s belief that building roads will stimulate the economy. That’s good. We’ll have better roads to travel on and drive past the vacant retail stores in our communities.

In the words of Heinlein, “The Roads Must Roll.”

The Solutions:

There are no silver bullets, but there are some bullets that will make a dent!

• Incentives, not disincentives to research, develop and manufacture.
• A tax system that encourages not discourages business. We are dangerously close to having the highest corporate tax rates in the world, supplanting all major European countries. High corporate and personal taxes have proven fatal to economies for decades.
• Programs that train and educate and leverage the talent withering away in our communities on something other than road building.
• Programs that support basic and applied research on technologies that will dominate the future. The Romans mastered road building…we don’t need to bank on this ancient art as our salvation.
• Recognition and support for the development of the future Commons. There is no going backwards…what’s been lost is gone for good. It’s about inventing the future now.

But, this is tough stuff and it flies in the face of doing the things to get re-elected. It takes longer to translate into people having more to buy more, and it’s not bankable in November.

Oh well, who is John Galt?