We Need a New Drug

Huey Lewis was on to something, to be sure, but the “new drug” I’m referring to must be administered to the numerous senior managers within corporate America who have lost their moral compass. Their maladies are varied and I’ll list a few:

ADD (Accountability Deficit Disorder): Many executives find it difficult to admit to nefarious activities within their companies. “I do not recall” or “I wasn’t involved in those discussions” or “I was out of the loop” are common disclaimers. Do you think for one minute that one titan of industry, what with a monstrous ego, would allow an organization to wander, willy-nilly, into areas of skullduggery? I don’t. This disorder requires a prescription that brings about an admission of knowledge (and guilt) from those that steer the corporate vessel.

AIDS (Aversion to Information Dependability Syndrome): It is clear that many of those on the upper rungs of the corporate ladder have no desire to pass along reliable and accurate information to the worker bees toiling on their behalf. Rather, they employ a program of fear, uncertainty, and doubt (FUD) so as to keep their minions in a constant state of agitation. This is seen as essential in gaining the most leverage and, without it, rebellion within the rank and file is more likely. This syndrome can be treated with medication that induces honesty when dealing with employees.

OCD Type 1 (Outsourcing Compulsion Disorder): This disorder causes executive teams to turn to foreign workers as a means of lowering costs and increasing profits. It is accompanied by a form of myopia which clouds the long range consequences of such behavior.

OCD Type 2 (Outrageous Compensation Disease): While this condition does not necessarily follow type 1 OCD, it is widely seen as an inevitable progression. The salaries of most CEO’s and their ilk are directly tied to recent profits and/or stock prices. The short term result of outsourcing is a dramatically improved bottom line. Naturally, the stock price soars, too. The myopia associated with type 1 begins to subside and the boss sees the prudence in taking his bag(s) of gold and hitting the road before the implosion begins.

(Are there more corporate diseases, disorders, and syndromes? Of course there are. As a matter of fact, feel free to come up with a few and pass them on to me. I’ll include your submissions in a future column. While I’ve tried to stay true to established medical acronyms, I see no need to similarly restrict your creativity.)

Capitalism is our preferred economic model, but it is in abysmal condition due to the absence of any morality playing a role in corporate decision-making. Spend a couple of hours with Michael Moore and watch his latest documentary on capitalism. Left or right, I believe you will leave the theater with a different opinion of our pillars of finance and business.

So come on, you pharmaceutical phenoms: find those new drugs that replace unbridled greed with a conscience that places value on all the components of a successful economy: the bosses, the workers, the investors, and the customers. Otherwise, we are left with nothing but the quagmire in which we currently find ourselves. We need a new drug...or a new model.

The Blame Game

Airline pilots have made the headlines this past week and for all the wrong reasons. As a near life-long aviator and a commercial airline pilot for 26 years (and still growing), I would be remiss to offer judgement on colleagues. I can, however, offer an opinion on the underlying causes for such lapses and how the airline pilot community is far from unique in this regard.

To refresh your memory, last Monday morning a Delta jet landed on a parallel taxiway rather than the runway at Atlanta’s Hartsfield Airport. The flight was an all-nighter (or red-eye, if you prefer) from Rio. Then, on Wednesday a Northwest jet overshot its destination of Minneapolis by a state before responding to Air Traffic controllers over Wisconsin and turning around. Far be it for me to render any kind of meaningful explanation for these lapses other than stating the obvious: these pilots were not paying proper attention to the task at hand.

Delta and Northwest Airlines, as separate entities, have both visited bankruptcy court and, as a result, the earning potential of all employees has been reduced. Retirement benefits, likewise, have suffered. Now these two airlines are merging and the seniority fallout among the pilot group could well have further negative consequences. Is it any wonder that these four pilots may have had other things on their minds? Many of my contemporaries have taken on other jobs to supplement what once was a comfortable life-style. No more three days “off” between trips: now, those days are filled with other activities to fill a financial void.

The airline piloting profession is not the only career field to experience such challenges. As a matter of fact, I’d say just about every worker-bee out there is filled with some degree of angst when thinking about income and job security. From doctors to lawyers to teachers to any other endeavor, we are being asked to do more with less and for less. I cannot imagine anyone doing high-quality work when faced with distractions and doubts about the future.

The tragedy lies in the fact that our four pilots may never again have access to their cockpit. This may come to pass in an attempt to paint them as aberrations so as to assuage the traveling public’s worry over an unsafe air travel industry. “The system’s fine, folks. It’s just these few bad apples that we need to weed out and then everything’ll be AOK.” This is tantamount to removing a few cancerous cells while ignoring the tumor responsible for their existence in the first place. In fact, they are nothing more than scapegoats to avoid a hard look at the underlying causes for such behavior.

Over-worked, under-paid, over-stressed workers from all sectors of the business world are “weeded out” under the same pretense while the underlying causes are ignored. This is equally bad for the provider of such service as well as the customer. Most of us want to do a good job and all of us want those that we hire to do a good job. But many outside forces are currently conspiring against such high quality results. Perhaps it is to be expected in these uncertain times, but to single out those that fall prey to such distractions as though there were no other mitigating circumstances is irresponsible and does nothing to prevent similar scenarios.

As some sort of stop-gap measure, many workplace environments have installed “fool-proof” safeguards to prevent such events. While this may provide a greater margin against error, there is nothing that is “damned-fool-proof” and it is damned foolish when those entrusted with varying degrees of responsibility allow themselves to be distracted. Not unusual or unheard of or even unthinkable. Just damned foolish. Only constant vigilance and the recognition of the root causes for such deviations can help prevent future blunders.

Full Speed Ahead...To the Past!

Rarely does one make progress while looking over a shoulder. In the case of improving our transportation options, though, I think it might provide the greatest potential for success. Allow me to explain:

Throughout the history of transportation in America as one mode became anachronistic, a newer and speedier mode was ready to replace it. The stagecoach gave way to the railroad and the trains gave way to busses (at least for shorter distances), and they both gave way to the airplane. But there is no new whiz-bang alternative to the airlines, is there? No particle beam transport a la Star Trek. Even the SST has been mothballed. We’re pretty much screwed. Or are we?

California’s Governor Schwarzenegger recently request 4.7 billion dollars in stimulus funds to apply towards a high speed rail system within the state. A step backwards, some might say, if we return to the rails as an answer to our transportation woes. Well, let’s look at a typical trip from Los Angeles to Sacramento. To make this trip by air, plan on arriving at the airport two hours before your flight so as to allow enough time for the poking and prodding of the TSA after standing in a lengthy line leading up to the indignity. The travel time is roughly one hour and fifteen minutes unless weather or other traffic interferes with the schedule. And we all know that either (or both) is a regular occurrence. Now we’re up to at least three hours and fifteen minutes, not including travel to and from our airports. The high speed rail travel time? Two hours seventeen minutes. And the stations will more than likely be closer to our final destination than the airport so the time savings increase yet again.

Can there be any rational argument against investing in this technology? Maybe, from short haul airlines who stand to lose major business to this quick and economical alternative, but that’s economical...not rational. Much of the infrastructure is already in place. Right-of-way problems are now relatively easy to solve, what with the lower values in real estate. No more sky-high prices for the land required to lay out our rails. Give them what the property was worth a year ago and watch them take the offer without a second thought. Other hardware and software technology required for these projects will create the need for companies to provide the necessary materials. Jobs, in other words. The best thing of all is that we’ll be making something. You know: manufacturing. That’s what we did before we made money by selling paper.

Look at virtually any state and the opportunities for high speed rail service abound. (Better yet, Google “high speed rail maps” and take a look at what is being envisioned.) Eventually, these networks connect with other areas to form a national high speed rail system second to none. Driving even becomes a secondary option in certain cases.

Yes, folks, the answer to our transportation quandary lies in the past, albeit with improvements. Climb aboard, literally and figuratively: let’s all go back to the future!

Shaken, Not Stirred

Sorry, but you won’t find martini recipes here. No, I’m referring to the assignment given folks elected to an office in the hopes of “shaking things up”. Mayors, governors, presidents: it matters not because, in each case, we look for one person to turn the related ship of state in a new direction. Others, as my friend, Sam, (who will appear in a later example), are brought into a public bureaucracy (school board or some like commission) with the same mandate: shake things up and get this body moving in the right direction. That’s the idea, anyway.

Unfortunately, the “shaking up” refers to the status quo and many pasts, presents, and futures depend on the continuation of things as they are. Jesse Ventura is a good example of what I’m trying to explain. The electorate of Minnesota apparently became disenchanted with the same old politicians doing the same old thing so they gave a retired wrestler the chance to shake things up. And Jesse tried, by god, but with little success. You see, the true power of any state lies in the Legislature. And that body is made up of career politicians. Now, why in the world would this particular group in Minnesota be interested in allowing an outsider to succeed? Wouldn’t that send a message claiming that just about anybody can do this job? And, if so, what happens to the future prospects of those career politicos hoping to one day reside in the Governor’s Mansion themselves? With these thoughts in mind, is it any wonder that Jesse served only one term? His failure was a higher priority than the citizenry of Minnesota, plain and simple.

Arnold Schwarzenegger is another prime example. Granted, he’s not the first movie star to run the Golden State, but he’s the latest and, in the years since Ronald Reagan’s administration, much has changed. Gridlock trumps progress if the other side of the aisle can claim a victory and California’s legislative bodies have stymied progress on virtually all fronts as the state continues to flirt with economic failure. Arnold gets the credit if they come through with a winning solution just as he gets the blame for their failures. And the blame is more palatable when considering the political fallout of opening future elections up to every common man and woman interested in running.

And finally, we get to President Obama. “Change we can believe in” was the message that got him elected, but, once again, many overriding agendas are best served by thwarting such change. It seems that the Republican Party is currently more interested in blocking anything on the premise that it won’t succeed. But should it succeed, their near-term hopes for regaining control of the Congress or White House are dashed. Once again, allowing your opponent to succeed is just not an option.

I wish it were that simple to get things moving in another direction, but ships of state are behemoths that require much coordination and bipartisanship to create even a few degrees of heading change. And, as I’ve tried to illustrate, many are keenly aware that change may well create a negative change in their own goals and finances.

Sam, whom I mentioned above, has been an educator for most of his adult life. In trying to put students first, he has sometimes been caught cross-wise with principals and school boards from time to time. Recently, he was offered a position in a school district to “shake things up”. Well, things were fine until the school board realized that they, too, would experience some shaking and that was something in which they clearly had no desire to participate. “Sam”, they said. “We meant to say that you should shake that other stuff up...not our stuff!” Needless to say, Sam’s contract was not renewed. So much for the shaking.

True to the 21st century, we seem to pin our hopes for the future on one person whose words or deeds rekindle the hope for a better tomorrow. Unless that person is the CEO (or Emperor), I’m afraid that other forces will continue to conspire against any meaningful progress. Does that mean we give up? Hell no, but it should give us a greater insight to the job at hand and perhaps be more patient before we turn to find yet another savior. And one final thought: rarely does “change” look like the “change” we envisioned when we called for it in the first place. Some will lose, but if many more gain then society, as a whole, is all the better for it.

Take Your Pick

Let’s try something different this week: rather than dwell on one subject, how about touching on a few salient topics from the headlines? In perusing today’s (October 3) Sacramento Bee, several things caught my eye:

Chicago loses Olympic bid: I’m surprised that Chicagoans weren’t the ones celebrating in the streets while those “lucky” Brazilians were wishing they were more careful in their wishes. Now, I’m a sports fan, but when I hear the Olympics is coming to town, I make plans to be somewhere else. Just like most everyone else. Promises of profit and opportunity abound and, depending on how you define “profit” and “opportunity”, the promises may be valid to varying degrees. Google “(un)profitable olympic games”. The top of the list will take you to an article from tourism review.com and I think you’ll be interested in the findings. (I’d link it for you, but it opens as a downloaded PDF. Sorry.) One would think that Chicago could put the same money to work in different ways to revitalize the economic maelstrom that now racks its citizens.

And Obama is getting heat from the conservative media types for going to Denmark when there are so many more important things to decide and discuss. (Of course, the conservative media would rather talk and discuss Obama’s trip to Denmark.) Who knows: maybe it was all show and, in the cloak room, he begged the IOC to give the games to those lucky bastards down south! I guess we’ll never know...

David Letterman: OK, here’s a guy who works with women and, over time, has found himself in a personal liaison with some. Who hasn’t? Hell, we’re all working about fifteen hours a day: if you can’t get lucky at work, you’re in deep trouble. True, Dave was in a long-term relationship with his future wife, but that’s between the two of them. The harassment angle is overplayed because no one has cried “Foul” and if someone comes forward now it is only because visions of fame and wealth are dancing in her head. We’ve all shared private time with co-workers (some above us on the career ladder and some below) with little or no fallout. Let’s move on and leave Dave alone.

Roman Polanski: Jesus, is this still going on? Let’s see, he rapes a 13 year old girl, leaves the country, promises to pay her a large sum in a civil suit (which he apparently never does), and now gets arrested to face the original charges. (Am I close?) Well, hell yes, he’s guilty. And of more than one thing and he should face the music regardless of elapsed time or his wonderful career as a film-maker. This has to do with taking advantage of a teenager and refusing to be held accountable. Enough said...

Paul Krugman: Paul writes for the New York Times and the Bee carries his column a couple of days a week. He won a Nobel Prize for economics last year and I find his point of view interesting, if not intriguing. His piece today is titled, “As difficult as it is to sell, spending is what U.S. must do” and it delves into how the government is doing too little to get the economy turned around. Yes, too little. Damn the deficit, full spending ahead! And you know what? I believe him. Picture a normal day in your nice, lovely home when, all of a sudden, a ray of sunshine (or drop of rain) intrudes from a space where intrusion is normally not allowed. That’s right, buddy: time for a new roof. But how can you afford it in these tough economic times? A blue tarp is cheaper and almost as good, isn’t it? Well, we all know the blue tarp ploy will only delay the inevitable and, in the meantime, more and more of your home is subjected to nature’s forces. At the end of the day, you’ve saved nothing and, more than likely, will end up spending much more than you would have in the first place.

Why would our national house be any different? Our financial roof is a mess and we’re trying to jury-rig a solution that will only come back to bite us on our collective backside. We do it all the time with our possessions when money is tight and what happens? We’re generally the worse off for it somewhere down the road. So I’m with Paul on this one. There’s no difference between your roof and our economy: they are both worthy of investment for long term security.

Not bad for one day’s news, huh? Maybe there’s still hope for the newspaper industry, after all.

Reverse Reaganomics

Ronald Reagan’s approach to governing still resonates with many who like the idea of smaller government, lower taxes, and “trickle down” economics. For those of you too young to remember, trickle down refers to the scenario where individuals and companies make a boatload of money and, in spending it, create opportunities and riches for those farther down the economic food chain. “Trickle” is the key word because a majority of the dollars seemed to stay in the pockets of those occupying the higher rungs of life’s ladder. Nevertheless, it still has support.

Unfortunately, the converse is also true: as money becomes scarcer at the top, less (or little at all) flows down to the lower reaches. We all know what does regularly flow downhill, though, don’t we and we’re getting more than a small taste of it as it “trickles” past. Within the upper echelons of the political and corporate worlds, much stays the same, but the trickling down of benefits has slowed to a barely perceptible degree. I’m not a physicist or an economist, but I’m surprised that such an outrage exists at such an understandable, and foreseeable, situation.

The slowing of the money train initially became obvious to me as Hurricane Katrina slammed into the city of New Orleans. The media reported that no agency seemed to be well prepared to deal with the aftermath. Perhaps “they” were very well prepared to allow other agencies to step in and foot a bill that “they” could not pay. The city was more or less broke and I find the idea that they simply waited for the state of Louisiana to come to their rescue more than plausible. Unfortunately, the state was no better off, financially, so deferred to FEMA. And we all know how FEMA performed. A combination of limited resources and bureaucratic obstacles created a debacle that continues to this day.

The latest example seems to be the extreme flooding in Atlanta and the surrounding areas. Once again, media reports show city officials hoping the state of Georgia will come to their rescue and state officials are turning to Washington for federal dollars. And, once again, we all know that the federal coffers have little to provide.

As help from Washington is reduced, states are forced to deal with their own problems, but their financial problems are no less severe. As the states turn to counties and cities for help by reducing the flow of money to those smaller entities, the supervisors and mayors look for help and find there is nothing lower (except the general population, of course). Each of us enjoys daily conveniences provided by each of these political players, but as the money slows to that trickle, those conveniences begin to disappear. Library hours are curtailed. Public swimming pools, parks, and the like are closed. Public universities reduce their enrollment numbers due to reduced faculty. Things we once took for granted no longer are there for the asking.

The business world is not much different as executive pay remains high so as to “attract and retain the brightest and best”. The worker bees, however, continue to struggle making ends meet as the cost of living goes up while the reward from working remains the same.

Let’s break this down to the family level. We’ll assume you have kids and they receive an allowance. They enjoy other benefits that seem to automatically flow from the fact that they live under your roof. Now you lose your job. The same trickle down that created a boon for your family during the good times is now morphed into their bane. The allowances decrease or disappear. Cable, cell phone, and the other accoutrements of the good life become, instead, luxuries that may not survive the scrutiny of a revised budget reflecting less discretionary income.

Face it folks: everybody’s broke. It isn’t limited to your family. Yes, your taxes are down because your income is down and/or your house value is drastically lower. So your contribution to the local, state, and federal cash boxes is lower. Why would you expect to maintain the same level of service from them when your own family can no longer expect the same level of service from you? The only way to find that money, short term, at least, is to raise taxes and that idea meets with instant outcry.

Our elected leaders claim to pay for everything by reducing (or eliminating) fraud, waste, and abuse. Nice theory, but I see it as more smoke than substance. First of all, nothing is 100% efficient, so you can scratch off waste as it is a by-product of effort. Fraud and abuse usually go hand-in-hand and so long as people are involved with any process, there will be those that take advantage.

It strikes me funny that, while many rant and rave about keeping government out of their medical affairs as we try to reform healthcare, some of the same folks rant and rave as services are reduced from the same government they claim to loathe. Which way is it? (No, you cannot have it both ways.)

Our economic way of life is changing in significant and perhaps irreversible ways and our consumer driven economy may well be a thing of the past. What will replace it? That’s anyone’s guess, but make no mistake: trickle down economics, just like most everything else, isn’t always a good thing.

BFF

There is no way anyone would confuse me with a cutting edge texter, but some of the more common abbreviations have made it down to my level. So BFF, or Best Friend Forever, is not completely foreign to me. What is foreign, however, is how the idea of best friends forever has permeated the world of commerce and how it has affected our buying decisions.

God only knows how hard it is to maintain any friendship “forever”, but those we do business with like to play on this BFF angle to instill a feeling of loyalty in our minds. Banks may well be the most proficient at this in light of their constant reminders of being in the neighborhood and always there when you need them. Airlines try for the BFF aura by awarding frequent flier miles and rewarding certain levels of participation with higher levels of attention. Kinda makes you feel warm and fuzzy, doesn’t it? But friendship is a two-way street and a closer look at the relationships claiming BFF status in the business world are anything but two-way.

I have a friend, Dave, who has maintained a long term relationship with the bank in his small, rural town. During this relationship, he has, from time to time, applied for an unsecured loan and has never been denied. And for good reason, since he has never failed in repaying the entire loan in a timely manner. Any business would consider him a good customer. Not any more, though. Dave’s most recent request for an unsecured loan (in an amount far shy of past requests) was denied. You see, the small town bank is now part of a larger group that passes judgment based only on numbers. No history, no relationship, no BFF. Sorry, Dave. Can’t help you. (He’s looking for a new bank, BTW.)

This tale got me thinking about our supposed long, close, mutually beneficial relationship we have with commercial enterprises whom we choose to frequent. The success of these BFF’s depends on one thing only: the continued flow of money from our pockets to their coffers. Once that stops, look out. No more BFF’s, my friends. Some companies dwell on their concern for your welfare while others “buy” your loyalty with perks that are dependent on your continued patronage.

Drug dealers aren’t much different, you know: they offer freebies until you’re hooked. Then the prices start going up. Prostitutes are famous for telling their clients what they want to hear and showering them with love and affection. For a price. Once the money train stops, so, too, does the affection. Am I likening corporate America to a bunch of drug dealers and hookers? I’ll leave that for you to decipher.

Try walking into your bank (assuming you are BFF’s) and asking to use their restroom. Or, perhaps, a cup of coffee. Something that a bank does not ordinarily supply, but something one friend would be glad to provide for another. Or walk up to the airline counter and ask for a meal voucher because you’ve had a bad day, the flights are late, and you’re hungry. After all, you’re a plutonium level flier and a BFF according to the literature they regularly send you. Simple experiments like these will readily separate the true BFF’s from the impostors.

It’s sad to say, but most of our commercial BFF’s out there are something far less loyal (or friendly). They hope that we’ll buy into their spiel, though, because, if we do, we’ll be CF’s (Customers Forever). Some businesses out there truly strive to meet our needs and expectations and will go the extra mile to maintain their business relationship with us. Others, unfortunately, are concerned only with creating the façade of loyalty and will turn their corporate backs should that prove to be in their best interest. It’s up to us to identify our true BFF’s out there in the marketplace and reward them with our repeat business. And for those that might think every business has a legitimate concern for the welfare of its customers: LOL!