How Bad is it?

[Randy Mayeux]

I read and present on a minimum of 24 books a year. The exemplary companies and leaders of yesterday do not all last very long. The companies in Peters and Waterman's book are not all still excellent. Two CEO's praised in Good to Great were released for performance issues shortly after the book was released. And now, this question: is the U.S. business dominance about to disappear?

Read this article from Slate.com that indicates that yes, there may be reasons to worry. What do you think?

http://www.slate.com/id/2186547/

The Rise of American Incompetence
We used to be the world's most skillful entrepreneurs and managers. Now we're laughingstocks. What happened?

[David Zinger]

Even as a Canadian, we associate closely with America when it is good and distance when it is bad, I think the Slate article as a few decent points but also is cleverly written with some hype and hyperbole. I salute a level plain field and when good leads to arrogance by anyone I think they better look twice. We have only to look at Conrad Black in Canada and I bet each country can find their own similar person.

My own personal take is that it is much less about a country, and taking your shoes off to go through airport security, and more about each individual manager and entrepreneur looking at what they are doing, specifically around employee engagement.

[Robert Morris]

Thank you for initiating this discussion of Daniel Gross’s article and related issues. “How bad is it?” Seven years ago, the US had the largest federal and trade surpluses in its history. Today, its federal and trade deficits are greater than ever before. After the attacks on the World Trade Center and the Pentagon, US relations with most countries were probably better than they had been in decades. I do not recall (at least during my lifetime) when they were worse than they are now. Corporate and public service scandals (e.g. Enron and Spitzer) are embarrassing. So I think that much of the “it” is very bad. However, that said, I think it was inevitable that other countries (notably Japan and Germany after World War Two, and more recently China and India) would close the economic, technological, and productivity gaps between themselves and the US. We should keep in mind that many of their CEOs earned degrees from our most prestigious business schools. Moreover, our most successful companies (i.e. those that have sustained profitability for the last 10-15 years) continue to serve as role models. Here are two specific areas I am especially concerned about in terms of global ranking: what we save as opposed to what we consume, and, what the most recent Trends in International Mathematics and Science Study (TIMSS) revealed, notably that whereas in some Asian countries nearly half of the students score in the top tier, only 7% of US students hit the mark. Given our preference to spend rather than save, is it any wonder that our economy is in such bad shape? And given the fact that our school students spend (about) three hours each day on recreation for every hour they spend on homework, is it any wonder that their counterparts in foreign countries are out-performing them?

[Randy Mayeux]

Robert,

I think you are right, and honest. And you have the observations and stats to make your thoughts pretty weighty!

For some reason, this article has reminded me of the book The Reckoning by David Halberstam. In it, he wrote of the greater drive, partly from hunger and desperation, that the Japanese youth had over the youth in the United States. He then described how, almost overnight, the youth in Korea were rivaling the Japanese, while the "comfort" in the United States seemed to take away part of our ambition.

I know the optimists are convinced that all will turn out ok here. I hope so -- but I think we have some very serious adjusting that we need to do.

[Daniel Tocchini]

Interesting article to say the least. Mr. Gross declares that our current problems are a result of incompetency. Is it incompetency or could it be a character issue? I believe the concern Robert voices in his post about the difference between our savings and consumption represents an indicator of something beyond competency and that is character. We all know ferns don't grow in a desert, regardless of how much water you bring to the desert.

I believe our character is the context that our competency takes root in and our Nations culture is deeply tied to self-gratification and convenience. From education to politics we are a people who have become enamored with immediate gratification, entertainment and convenience to name a few. We value image more than character.

An expression of our context is seen in the difference in compensation between professional athletes, actors and that of teachers. Our context encourages that our competencies be directed toward what is valued most and that is immediate and convenient. So we seek the answers, solutions, prescriptions etc. that are most immediately convenient. We hate having to really roll up our sleeves and grope around for what is wanted and needed. We don't spend much time considering all the factors that might be involved in a breakdown. As a whole I have noticed that business leaders are reluctant to consider that our concrete actions are produced by a set of invisible assumptions and attitudes rooted in values that determine to what end our competencies will be used. We tend to only value what is directly measurable and divorce ourselves from the thinking that has brought about the results we end up with.

Again, I think Robert makes a great point that many of the worlds business leaders are graduates of U.S. Business Schools. So, how is it that they flourish when we find ourselves flailing?

Perhaps we have grown oblivious to the context of our own character? In fact, when I work with executive leaders I have experienced a general disdain toward really looking into character as context and engage in in accounting for its contribution to the breakdowns they face. In my work with business leaders the demand for tips and templates for action as well as the 7 Laws of this or that and these tend to be far more important than considering how relating to the problems, people and other executives could be contributing to the frustration of synergies that should be present. I believe these types of attitudes demonstrate our focus on content and our lack of concern for the context the content is being engaged from.

Perhaps our competencies in finance and systems management have overshadowed our competency for character development? "With great power comes great responsibility." We have been cleverly competent in how we have manipulated the monetary system for many years and now we are faced with paying the prices of years of avoiding corrections that have been artificially postponed because of our great skill. I believe the question now is will we address the context of our own character or will once again rearrange the deck furniture on the Titanic?

Will we pay now or will we pay later with even more penalties and interest?

[Skip Reardon]

I think a lot of this wave is from lack of focus and thinking only in terms of "short-term-itis".

For publicly-held companies, the pressure is enormous to keep your eye on the quarterly prize (in an effort to meet shareholder and more specifically -- Wall Street -- expectations. For privately-held companies, the continual search for the next "big thing" (take your pick: to be more productive, to be more X-Y-Z) - causes leaders to take their eye off the ball long enough to forget that excellence is an enduring pursuit - it requires an enduring approach..

Stick with what works - have clarity of vision and purpose, engage everyone - every day - in making decisions about daily activities that support the organization's strategy - and something consistent and magical can happen.

[Stephen A. McPherson]

Randy, first let me say that I am not an American; I'm a Canadian, so my point of view may be a bit off centre for you. I don't agree with the basic tenant of the Slate article that "Americans used to be the most skillful entrepreneurs and managers." I think there are a number of falacious and specious arguments presented in the article that are not supportable with fact. I recommend 2 books that might change your thinking on the issue - "A Man Called Intrepid" and "Boom, Bust and Echo".

America was the recipient of a tremendous portion of the gold backing Eurpean currencies during WW2 because the USA would not accept any paper for goods and services to feed the Allied war effort. The USA was very well positioned at the end of WW2 economically. America also benefited greatly from the huge impact that the baby boom has had and is still having on the USA economy.

Things were so rosy in the US that no one paid much attention to the oil crisis of the 1970's because it didn't impact them all that much nor for very long. I was living in Europe during that time and the impact was very different and more severe. In fact, the oil crisis of the 1970's changed consumerism in Europe in some very dramatic and lasting ways. My peers with similar experience were quick to realize that the next major armed conflict was going to be in the Middle East not North West Europe. Most western militaries and their political task masters were so focused on another war in North West Europe that they were caught with their pants down around their ankles when 9-11 happened. So America's political, military and business leadership were all asleep at the wheel.

Further, the collective thinking in the US is still very much focused on the individual. For example, America is the only G8 that does not have a universal health care program. If I was limited to one single thing that is crippling America today, this is it.

So how bad is it? It's just the status quo. Getting people engaged is difficult when you can't look after a basic need.