Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Thu May 15, 2008 6:22 pm Post subject: US In A Recession? Or Is The Recession In US
People sometimes like giving names to things they don’t understand. Perhaps this is far easier to accept than actually having to work though the problems. An example, taken so far to the extreme as to be ludicrous, in my opinion, is the term “recession.” This term is thrown about, jockeyed for political advantage and basically exploited as an excuse for almost every problem people do not wish to expend the effort to solve.
Technically a recession is when the gross domestic product (GDP) of a nation, drops for two consecutive quarters. Yet despite continued growth in the GDP people continue to blame every economy woe they encounter on “The recession.” Isn’t this just an easy excuse for our failing to take self responsibility for a changing market? No one said business was easy and no one said you just hang out a sign and expect the bays to magically fill with profitable work every day. As Deming stated, “Change is not inevitable, Survival is optional.”
In every segment of the economy there are businesses doing poorly and there are some doing quite well. I feel, those doing well, have taken responsibility for and made changes necessary for their own success. My thought is, acceptance of and dwelling on “the recession” theory excuse, may actually speed the decline of many businesses.
I feel once people accept that something outside their control is responsible for their business success, a feeling of complacency tends to come over them. With this feeling comes less likelihood of trying new solutions. In fact, my observation has been, they tend to try to convince as many others as possible of the hopelessness of the situation. They seek out and make known any evidence they can find of how bad things really are. They cite news reports, surveys, business closings, graphs, anything they can find to support their position. The feeling tends to be, I’m still making it in spite of all this adversity, I must be really good. The point is, just making it is not really good and why aren’t they instead making changes to make things better? This tends to have a contagious affect on others, who fail to see through it.
My second point is, success has never been easy. It has never been achieved by those who sit back and wait for it. I have NOT seen it achieved by those who just work hard, at the wrong things. Success is the result of hard work, in the proper direction. It is most easily obtained by understanding and emulating the methods of others who have achieved it. Using methods such as PDSA, SPC and the fourteen points, can greatly stack the odds in our favor, as long as we are willing to do our part. But we must do our part and this does not involve excuses.
I research it constantly as knowledge of the conditions are critical in knowing how to approach business. This helped us greatly in having the best April in 30 years while having the best first 4 month start since 1999.
Where you are located makes a great deal of difference.
Four years is NOT a recession, it is a change of reality. Many of the formerly more affluent parts of the Nation are beginning to experience this change of environment. This is NOT something that is perpetrated upon those residents any more than it is a cycle or something likely to pass. Rather it is a change that must be adapted to. Calling it a recession or not will not change this reality. Personal adaptation by management will help businesses survive.
Tom Ham wrote:
I research it constantly as knowledge of the conditions are critical in knowing how to approach business. This helped us greatly in having the best April in 30 years while having the best first 4 month start since 1999.
I suggest clearly YOU have demonstrated YOU are responsible for how you do and rather than "the economy." In the same area, many people report having done increasingly worse. The same is true of every area in the Country. Your personal initiative appears more likely the reason.
Tom Ham wrote:
Where you are located makes a great deal of difference.
This does not appear to be the case for as you state, you are having:
tom wrote:
best April in 30 years while having the best first 4 month start since 1999
Yet this map shows you clearly in a recession area. The same may be true in every other area on this map. I am sure almost anyone can cite businesses doing well and poorly with little regard to their locations. The more influential difference Tom, seems to be the personal initiative taken by their management.
I believe you are doing well because you have adapted to the changing conditions. Others are doing well for the same reasons. At the exact same time and in every area of the Country businesses are closing and eking out a living. The question seems, if recession is the main factor, why are some businesses affected far more than others?
tom wrote:
When one is in a booming area it can be tempting to question the methods of those who are not.
As you well know, a chart or graph can be found to show almost any area is booming or failing, from some perspective. For instance U.S. business bankruptcies from 2003-2004 have fallen from 38,540 to 35,037, a 14.7% decrease.1 In Michigan and in the same period, they fell 802 to 684, (14.7%.)
Figures can easily be gathered and interpreted to support almost any belief we care to endorse. Do a great number of the vehicles in a particular area stop breaking because it is declared to have a recession or do people in those States stop driving? Obviously not.
tom wrote:
I would not recommend many of our methods in areas of economic expansion...just as many of the methods used in those areas would fail miserably here.
I think sound business methods are far more likely to produce results and gimmicks far more likely to fail, regardless of the area in which they are employed. Economies tend to expand as more people in an area adapt to current conditions.
This may appear easier for some areas than others. In formally more affluent areas, and as highly paid jobs leave, the business climate changes rapidly. Clients now are more likely to seek value than before. Businesses that provide value and can demonstrate that fact to large numbers do well. Businesses that do not are more likely to do poorly. The problem may be one of change and adaptation, as well as the rate of change.
Traditionally less affluent areas have always had to provide high value to survive. This is nothing new to them because if they were not able, they likely never got started. For example, the mean income for all occupations in the U.S. as of May 2007, was $40,690.00. 2 In Michigan it was $42,210.00. In Louisiana it was $34,060.00.
With less disposable income, people tend to seek higher value. Businesses accustomed to economically depressed areas tend to do well with this. We have grown over 10% annually for over ten years. Geographical income level seems less a factor in local business success than providing value. I suggest it is precisely the same with the excuse of “recession,” as your figures seem to indicate.
Congratulations Tom, you are doing well. I feel this is due to your seeking answers and implementing solutions. Your’s is an example of how taking personal initiative contradicts the excuses of recession. Thanks for your contribution.
1SOURCE: "Table 9. Business Bankruptcies by State, 1990-2003," in Small Business Economic Indicators for 2003, -- U.S. Small Business Administration, Office of Advocacy, August 2004. U.S. Bureau of Labor Statistics; Division of Occupational Employment Statistics; Suite 2135, 2 Massachusetts Avenue, NE Washington, DC 20212-0001
2”May 2007 National Occupational Employment and Wage Estimates” -- U.S. Small Business Administration, Office of Advocacy, August 2004. U.S. Bureau of Labor Statistics; Division of Occupational Employment Statistics; Suite 2135, 2 Massachusetts Avenue, NE Washington, DC 20212-0001
It is common for American-trained managers to analyze numbers the way Tom has. April might have been 'better' than any 'other April,' well and good.
But if you apply statistical control to, say, the past seven Aprils, the story changes. We would perhaps learn that the 'better month' was only due to random chance and common causes, and not because of anything specific the manager did.
In fact, we might learn that we can't predict with certainty that the better month will repeat itself in the future, and that the future is just as likely to have worse Aprils.
I'm not picking on Tom, but am just saying that there are other ways to analyze numbers that are not well known.
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