What If?
There are four management principles, two of which should rule corporate, government, and individual lives: planning and control.* Why am I going to go through these for the umpteenth time? Because there are too many who are repeating history, that's why.
Planning: Let's start with something simple. Two weeks ago, somebody said that we should go to the Gilroy Garlic Festival. When it started some 27 years ago, we'd be looking at a two hour drive (and 100° temperatures). Because it has been quite a success and because this is the summer of staycations, we would have been looking at a three hour trip (and 101° temperatures - global warming dontcha know).
The plan calls for getting out the map or Googling it (no Garmin here - just the sun and north star). But the real planner asks "What if?" and "What has experience taught us?" Experience has taught us that traffic will be thirty percent more than it was so many years ago, and the what if is, what if it's fifty percent more or there are accidents?
That gives us alternatives. We chose the first one: we took mass transit to a baseball game fifteen miles from here in a cooler climate to boot.
Control: While planning gives us alternatives and direction, control gives us power over our destiny or destination. Individually, we can control little, but what little we can control can be life saving or life altering. If only I hadn't eaten that banana split, I wouldn't have gotten brain freeze, look like the Michelin Man, and be $7.50 richer. Experience tells me that.
If I didn't buy that Audi A-6, I could have had enough money to go on a Mediterranean cruise. If I hadn't taken a Mediterranean cruise, I could have paid off my student loan. If I hadn't bought the used Jag, I wouldn't have needed a student loan. You get the idea. Wants versus needs with a little thrown in for a new HDTV or TiVo.
Sometimes, there is no control: Just today, we have found that there are some things which can't be controlled like Vladimir Putin, the real Bad Vlad. Bush could have looked into his soul and seen his eyes (or was it the other way around), but this is not a nice person. You can tell by the way he walks. Besides, nice guys don't head up the KGB. The U.S. is spread too thin to take anything but diplomatic action, but NATO is reluctant if not weak, and Putin couldn't care less about Bush, Rice, McCain or Obama. Saber rattling doesn't work when you might have a Star Wars or a very real nuclear navy outside Cuban waters to get Russia to back down. (They do teach that in school, don't they?)
Still, going back to planning, could we have seen this coming? I'm always leery of the summer and weekends. What better time to slip something like an invasion or cheating on one's spouse than during an Olympics weekend? Really. This is the Short Attention Span Theater. I wouldn't be surprised if the CIA takes weekends off. The Enquirer doesn't. Anyway, what we're left with is rhetoric.
[I just saved what I have written. That's control. Experience led me to plan, and planning led me to have all articles I'm writing saved every 15 minutes even though my best thoughts come and go in nanoseconds.]
What If? There is something that is between planning and control. It's not a principle, it's a question. What if???? Start thinking inside the box. Then take a step outside and ask what if?
Trite? No. You want trite, starting "thinking outside the box." (Don't ever think outside the cubicle: there's a whole lot of bureaucracy and untrained managers to beat you down and back.) If Ford had asked, what if there's a repeat of the 1973 gas crisis, they wouldn't have put all their eggs in the truck. If GM had stopped thinking about being number one and started thinking about how to maintain their ranking, they could have staved off becoming a number that didn't matter. If Cheney had asked what if they don't greet us like heros. If he had asked, what if these radicals decided to blow up their own oil fields. If the public had asked, what if this house loses "value." If they had asked, what does "value" mean?
In other words, perhaps the most important question that can ever be raised is, what if. Asking what if makes you think about what is and what might be, and then you can plan ahead for contingencies.
Corporations and Government: So, how are you doing? (The "you" doesn't include billionaires.) All other things being equal - which they never are - if you're over 40 and have a little put away for retirement, are you better off today than you were in 1990? Absolutely not! Without a doubt, this is the worst (non)recession and government we've had, and that includes the Carter Administration. This is a Congress that does nothing or less than nothing, that has more pork than Iowa and West Virginia combined, that is stymied by itself and the administration, that is supposed to provide oversight but just has committees, and even an ethics committee that is a joke.
For 10 critical years or more, they let Wall Street run amok, and they still let Wall Street run amok. Freddie and Fannie are up to their ears in bad loan losses - which we really did see coming four years ago - and yet the CEO's are making $20 and $40 million a year for doing a lousy job. And it's the public who's paying those salaries! Unbelievable.
Oh by the way, I saw the Secretary of the Treasury with Tom Brokaw yesterday. He said that they knew there was a "housing mess" two years ago. He - not very skillfully - didn't explain why nothing was done.
When I was a banking manager... what banks complained about was the fact that, with the exception of one bank, they could not have branches out of state in which they were licensed to operate. Then in 1981 or close to it, Congress allowed savings and loans to make car loans, to have ATMs, and to provide many services that banks traditionally provided. To assuage the banking community, Congress then allowed banks to go out of state and layer, and even sell life insurance (that's what annuities are). When the S&L debacle of 1987 occurred, banks were often asked to bail out hundreds of S&Ls and take over those who were in default. So S&Ls became banks, banks became insurance companies, and credit unions became S&Ls. Very tidy, and that was the beginning of what you're seeing now with subprime loans and nothing down and nothing to show for it.
It's true. Because Congress started trusting banks and banks chiseled away at any anti-trust legislation, what started as cracks in the system ended up as chasms. Now you had corporations that were too big to control from the outside (I'll get to the insides in a minute), and as banks went, so went other corporations. Even the dot-com bubble taught Congress nothing. And so we had Oracle buying up all of its competitors. Banks buying so many other banks and even non-financial institutions, and utilities doing god-knows-what to invent an Enron or California utilities selling power to Oregon when the state couldn't keep the lights lit in Sacramento, but charged ten times what it used it, everything was out of control.
When things settled down, Congress looked the other way and allowed excesses and bad management to take hold of the banking industry - which not included all the S&Ls taken over by banks.
The government continued (and does even today) to lie with statistics. Unemployment was over ten percent, and I wouldn't be surprised if the real figures today aren't about the same. Hell, last week, the figures came out at about six and a half percent, based on "the fact that unemployment benefits were extended and, therefore, more people applied." Yeah, and more people were out of work or working part time or had given up, the latter often figured at four percent. Consider that the U.S. had a population of 100 million in 1967. Now, it has 300 million. Well, six percent of those in employment in 2008 is a hell of a lot more than six percent of those in 1967.
So much for background and good, solid diatribe.
Ford sees its sales slipping in 2000. GM sees its sales falling back in 2000. All manufacturers see Toyota and Honda cutting away at the Big Threes' place as the Big Three. How could they see 2008 coming? Well, they could have looked at October 1973 when OAPEC pretty much cut us off because of the Yom Kippur War. If it happened once, and if the Middle East was, is, and always will be so unstable, why not keep tabs on it? I don't know, but Ford and GM came out with Explorers and Escalades the size of Bradleys. Ten miles to the gallon, and when gas hit $4.57 a gallon (California) people stopped buying. Now that gas is down as little to $3.80, I'll guarantee that there's someone in the management of Ford or GM saying that this too shall pass and they can slough off their outward development of alternative energy cars. But Southwest Airlines hedges the cost of aviation fuel two years ago because they did indeed plan. Gary Kelly, the CEO, said they did that, not two years ago as reported by Fox, but as far back as 2000. They saw the past and they planned for the future.
And then in Congress, there's a push for ethanol which costs $3.50 a gallon to produce. But you've got to expect that from Tom Harkin, senator from Iowa where corn is king and Harkin needs to buy more votes regardless of what such pork does to the country. And because farmers took advantage of the buzz if not the truth, they moved from wheat to corn. (Too bad they had floods which wiped out half the corn crop, but weather is so unpredictable that farmers can only predict that they just might be skating on iffy ice.) Soooo, wheat goes sky high and the price of bread and steak and anything that has to be trucked to other parts of the country, we have inflation.
If a = b and b = c, it doesn't take a genius to know that a = c. Does that take planning? It wouldn't hurt, but if you'd care to substitute common sense for planning, that would be an improvement.
Control? What control? Congress has allowed special interests to run roughshod over it and us. Utilities and auto manufacturers got them to push pollution requirements back by twenty years. Corporations can come this close to monopolistic practices and get away with it. Banks get away with subprime loans, and Wall Street takes advantage of all of the above, saddling the world with debt and bankruptcies, financial and ethical. Congress allowed two or three people to take over the news, and now you can't separate the wheat from the more-than-considerable chaff. Note that every one of those industries is supposed to have congressional oversight. Where the hell is it or was it? Playing golf in Bermuda or Dubai or Palm Springs probably.
Gas prices finally scared Americans straight. NOW senators and congress people act or throw out such idiotic things as reinstituting those "solutions" that solved nothing. The 55 MPH speed limit was a total failure for 19 years, Jackie Spiers. John McCain, don't laugh. The first principle of gas mileage seems to have something to do with air pressure in your tires. So long as the Commander in Chief does have to run a full service gas station, you're okay.
Barack Obama, you can only change your mind so often before people stop listening. Nadir, go away. The Democratic Party, before you espouse universal health care, try studying any country with any country with near our population, and find out what you're getting yourself and us into. Oh, that's right. You have your own medical coverage. So just worry about us.
You did such a wonderful job with unions and labor laws. And unions, you screwed up royally and because of that, we've lost balance. NOW, you've demanded so much that there are no hours left to take care of the kids. You were more interested in political correctness than rights. SHRM, you went in the wrong direction and backed the wrong principles. And Americans, remember that gas was $2.50 a gallon a year ago. Don't get used to $3.85 and start buying Jimmies.
I recently sent email to Dianne Feinstein (and Nancy Pelosi), outlining in less than 200 words what I've stated here and because she is Chairwoman of the Senate Committee on Rules and Administration, and on four other committees relevant to anyone who's supposed to be planning and controlling. I was polite but direct, and the only thing I left off was that I wouldn't for Dianne for governor even if she promised me a job on this state's Unemployment Compensation Appeals Board ($150k a year for one day a month). I received a return email thanking me for my support. That's the same email I got 15 years ago from another of our state's U.S. senators. Pelosi didn't respond. Just as well.
I miss the old days, and guarantee you who weren't around, there was a balance. The political parties - broadly speaking - had specific platforms that told you what side you were on. What we have now is a lack of definition. It's like having glasses with the wrong prescription: the only thing clear is that there is neither planning or control. It's every man for himself.
If you don't have the experience, ask those who do. Read Jack Welch's book. Or even Lee Iacocca. Management principles don't change much, and they're what got us to the good times. They could return us to the good times if we start following the principles of planning and control. You don't balance a budget without either of those. You don't build up a company without them either. Yes, timing and dumb luck often play a part in small successes, but no dumb luck can ever dig you out of a $9 trillion hole. That's going to take real skill. Sometimes I think that the best candidate would be me, but I don't take direction well, and I often smell of garlic.
I'm Ethan Winning, and I approved this message.
*You can look at the five or more articles on these principles in the subscriber's section and in the book, Labor Pains. I've been discussing these for forty years, sometimes to no avail. But those who have taken heed have done very well. As a consultant, I'm a small company's best control factor. For some perspective, see Management Goes Back to Basics and Prospers wherein I give accolades to David Duffield, founder of PeopleSoft - which no longer exists because Oracle needed to get rid of another competitor.