PSI - The Secret Of Our Success

The Secret Of Our Success

November 20, 2002

Published in the Open Systems Database Association Newsletter, Winter 2002

All over America, they're doing it. Large and small alike, companies are reacting to the current economy with cutbacks, workforce reductions, and all around belt-tightening. On the surface, it seems like a practical thing to do; With decreasing corporate profits - if any profits at all - there just isn't a bucket of cash lying around waiting to be spent. Looking deeper, however, one must wonder if layoffs and holding patterns are really the best course of action?

If things continue on the current path, this holiday shopping season will be characterized as the season of "more with less". Many people have lost jobs. Others have taken a pay cut to help their company stay alive until things turn around. Still others are reeling from significant losses in their retirement savings due to market instability and corporate boondoggles. Consequently, can we count on these people to spend record amounts on holiday shopping? Of course not!

With the general consumer base working to stretch what little they have, companies shouldn't enter this season with wide eyes and big expectations. Bottom line, products don't sell when people don't buy, and people don't tend to want to spend much with the specter of cutbacks or layoffs on the horizon.

But the problem doesn't end there. Lackluster sales lead to reduced corporate profits, which - left unchecked - leads to increased investor caution. Take away the customers and the investors and you're left with a company facing more cutbacks and belt-tightening, and the cycle of corporate decline continues.

Anecdotally, some might blame the decline on the great "dot-bomb" implosion, the horrors of terrorism, or even the rash of corporate scandal that has rocked the American business scene. While any or all of these may have been catalyst, today's problem has grown beyond these issues. In short, the problem with the economy - and perhaps in part the solution - is an issue of confidence.

To illustrate this point, what if we took a different course of action in response to the sagging economy? If only for a moment, consider what might happen if a company kept all their employees, minimized overall project reductions, and used the extra manpower to plan an expansion of their operations. Just by virtue of the company offering stable employment, employee satisfaction is enhanced. More importantly, though, money continues flowing into the hands of those who will be spending it.

But the benefits of this approach reach far beyond employee morale. When an organization maintains a clear and consistent path towards a goal, confidence goes up. By contrast, cutbacks and other generally accepted responses to a depressed economy are commonly interpreted as distractions and disruptions along this path - and confidence suffers because of it.

Certainly, there is cause to be concerned when profits are declining. However, is it best to take steps that negatively alter consumer and investor confidence? Be assured that in whatever direction confidence is moving, spending and investing dollars are matching it step for step.

To restore confidence, we need to reverse the process that brought us to this point in time. Catalysts aside, confidence began its slide when companies began reducing their workforce. It then took a beating with the corporate scandals and revelations of unscrupulous business practices. And now, confidence continues its decline because we - American businesses - are simply holding tight, waiting for something to happen.

So let's make something happen.

Where protocol would dictate cutbacks, focus on growth. When looking square down the barrel of a workforce reduction, consider how these people might contribute to an expansion. Crazy - and in some cases as impossible - as it may sound, the future of our economy may very well depend upon it.

We've heard stories of terrorists' plans to destroy the American economy. Who knew that all it needed was a push and we'd inadvertently continue the damage? No, the time to wait for something to happen has ended. The sooner we aggressively press forward and tell the world we will not go quietly into that good night, the sooner we can restore the confidence that our economy so desperately craves.

Kevin King is the President and Chief Technologist with Precision Solutions, Inc., a leading technology solutions provider in Longmont, Colorado. He can be reached by email at Kevin@PrecisOnline.com or by voice at 303/651-7050.