Strategists trying to understand and influence the future of an organization will study the “containing system” surrounding it. That is, factors that affect the environment in which the organization operates. Social forces, regulatory changes, competitor actions, and global economic trends are examples. But rarely do strategists consider the notion of whether our nation remains a democracy or operates under capitalism as a component of that containing system. It may be time that we do so. Chairman of the Joint Chiefs of Staff General Mark Milley‘s comments at his farewell ceremony moved me deeply. Appointed by Trump, he is voluntarily retiring. You might remember that when Trump refused to concede the election, Milley reached out to his counterparts in China. He said the US would not attack China during Trump’s increasingly erratic last days in office. For this act, Trump has accused Milley of…
Healthcare Costs Part One: Who Benefits from our Broken System?
To solve a problem, some say, look to who makes money from its existence. So, who benefits from the high cost of healthcare in the U.S.? At a minimum, looking at the beneficiaries will help us identify those who will impose barriers to changing the status quo. (In the next blog, I’ll look at root causes of the cost problem and worthy solutions.) High Cost U.S. healthcare costs exceed those of other developed countries according to several key metrics: as a percent of our GDP, cost per family, and cost of procedures and hospital stays, among others. Self-insured employers reported to MedCity News that the average per-person cost of healthcare would be $17,201 in 2023, a $1,339 increase (or 7.8%) from 2022. By way of comparison, median annual income was $69,021 in 2021. No wonder a significant lifetime achievement is securing a job…
Grading The Lincoln Project
The Lincoln Project (TLP) is a tribe of GOP political consultants created in advance of the November 2020 election. Its immediate objective was to convince right-leaning-independent and GOP voters in the swing states to vote for Biden and Democratic Senate candidates. Its broader aim, one that continues after this election, is to protect American democracy. Democracy for TLP is one that contains strong democratic institutions (e.g., voting by all, a Justice Department independent of politics) and fulfills the promise of our nation. Steve Bannon (Trump’s 2016 election advisor) said that if TLP could turn 4% of GOP voters to Biden, Trump would lose in 2020. So, 4% became TLP’s key performance indicator. I would suggest a higher benchmark as 4% of GOP voters voted for Hillary in 2016, according to Pew Center research. Did TLP get more than 4% of the GOP…
The economic issues facing our nation require political cooperation, not divisivenesss.
Biden is our President-elect and one thing is certain: Whatever the ultimate balance of power in the US Senate, we do not need four more years of a stalemate. The major economic issues facing our country require a US Congress that can listen, learn, debate, and collaborate with the President to find solutions that advance the well-being of our nation. What are our major economic issues? The pandemic. The exponential growth rate in COVID virus cases (and with it, ICU bed usage and deaths) is slowing down our economic growth while at the same time increasing the deficit, food shortages, evictions, anxiety, and business bankruptcies, small and large. Our excess death date and virus incidence proved we are not managing the pandemic effectively. We need the President and Congress to act on Federal powers to drive manufacturing to support Covid-fighting efforts so that…
From “Mass” to “Craft”: The new differentiator
“Mass” was the economic drive of the last few decades. Mass markets replaced national markets, which had replaced local markets. Walk into any city’s retail centers and malls a decade ago, and they looked identical. Manufacturing automation and global supply chains made goods cheaper. Clothing, curtains, bedding, hairdryers, blenders … much of what we buy has become so cheap that we throw items away rather than repairing them. My seamstress, who has been in business some 40 years, cannot believe how poorly made clothes are today. And her comments refer to the pieces she is seeing, the ones worth repairing. True, cars are more expensive. But based on their quality, longevity, and performance, they are a hell of a lot cheaper than their predecessors considering lifetime costs. And have you noticed that they increasingly look alike? IKEA brought us furniture so cheap that…
Why we should all be depressed, not just Michelle Obama
Michelle Obama is experiencing mild depression. If she can feel depressed, I feel better about my own malaise, especially about the state of the US economy. Without additional fiscal stimulus, we will experience an economic depression, a situation where the economy lacks its own ability to recover. There are other things to feel terrible about – unnecessary deaths, inequality, school-age children falling behind, and another generation likely to incur long-term effects from sustained, high unemployment. All these painful experiences are worsened as the economy tanks further. It’s helpful to remember Macroeconomics 101. The level of our nation’s Gross Domestic Product (essentially our national income) depends on the addition of four terms. Consumption of disposable goods like food, entertainment, and clothing. It is the dominant majority of our GDP, coming in at about 69% in Q2 of 2020 GDP. Government spending on things like…
What if you made market and customer understanding as important as your organization’s financial information?
Financial information infuses company activities. From budgeting to closing the monthly books, from measuring progress to managing cash flows, numbers are to business what the ABC’s are to our reading. It’s no wonder then that companies large and small have invested heavily in their financial system, teams, and processes to generate financial information. Let’s call this entirety the Financial Information System. Numerical data is collected, processed, and stored in data warehouses, where it is then used to develop insight and inform decisions. While the Chief Financial Officer is in charge of this system, all employees play a role, whether they fill out expense forms, develop budgets, or make investment decisions. And all decision-makers are encouraged to use the processes’ information (e.g., making a presentation as a product manager about your category). A stellar CFO is like a great coach in winning the game…
Change is never linear. Don’t be fooled by obstacles to change or a reversal in a trend.
Liberal media sites often highlight the positive trend of solar and wind power. In contrast, Mr. Jenkins, a Wall Street Journal opinion columnist, concentrates his energy-related columns on the well-known flaw of solar and wind energy not being as reliable as fossil fuels. He suggests wind and solar will be niche energy sources. Jenkins is wrong. He has fallen into a trap called mistaken (and sometimes hidden) assumptions. Jenkins assumes the intermittency flaw is a constant. But battery technology is continually improving, and its use in power storage to solve the intermittency problem is spreading in many countries. Battery technology is advancing so quickly and effectively for automobiles that one can now reliably predict when petroleum-powered cars will become more costly to produce and run. No wonder Tesla is worth more than Toyota. There are always naysayers to change. The Kodak Board was…
Should businesses care about economic inequality beyond justice considerations?
Today is scary. Our lizard brains want to hold tighter onto what we have. But embracing a spirit of abundance and thinking about “we, united” versus “me, safe in my status” is exactly what is needed by business owners and leaders. Why should leaders worry about inequality beyond justice considerations? GDP growth. We live in a consumer-driven economy. Without a growing middle class, consumption will continue to grow slowly, as the wealthy have much lower propensities to spend, even in today’s luxury branded world. Today, the most prosperous people secure an astoundingly large and rising share of national income, while the worst-off show little to no growth in income (despite rising housing, medical, and education costs). The middle class is disappearing. Global data shows nations with more equitable income distributions have more rapid real economic growth. Young people’s inability to afford homes and…
The price of profits
Today’s youth pose burning questions about capitalism. For examples: How is it that we live in a country of extraordinary wealth but have low ratings on many societal quality-of-life measures, like infant mortality, affordable housing, food insecurity, and maternal health? How do we continue to abide by a system that generates untold wealth while risking natural calamities due to climate change? Wasn’t the point of technology to let us work less and live more freely? Instead, technology has created increased productivity that benefited incomes for the few at the top while the rest of us can’t even afford health care and a roof over our heads as gig workers. I studied economics after asking myself, “How is all this order – jobs, incomes, homes, and goods – created? What makes it all seemingly work?” I learned that capitalism is the mechanism that incentivizes…