Saturday, February 23, 2008

There is no Recession




Every Friday. Just like clock work...

I get Wally's "Three Star Leadership Letter" eBlast. This week, he explained the lack of a recession:
If you're a leader ... the way you present a situation to your people has a big impact on how they will evaluate it and deal with it. To quote Shakespeare's Hamlet:

"there is nothing either good or bad,
but thinking makes it so."


I oft tell the joke about the media predicting ten of the last two recessions. It is more like twenty-seven of the last two... and recall that a recession is when your neighbor is out of work. A depression is when you are out of work.

Three financial facts that I know to be true beyond a shadow of doubt at this moment in time:
  1. There is no recession
  2. There is no inflation
  3. Richard Milhous Nixon is the most popular question on Jeopardy
How is Nixon a "financial" fact? When in doubt (if you are ever on Jeopardy), simply guess, "Who is Richard Nixon." Your monetary score will increase! But I digress...

None of my neighbors are out of work

Almost all of the requests that I know of for jobs, are from folks who have one that they no longer want. Recently, Yahoo! had a feature on folks "swapping" homes, as the market is so depressed. Would that work for jobs?

Speaking of Yahoo!

I am moving all my mail to my corporate email identity: ski@throughput.us in case the hostile take over happens. Plus, I started using gmail as it works much better on my iPod touch. But I am still way off topic...

You can quote me: There is no recession in America

It is simply a decision. Nothing more. Or less. Time to move on. Time to address the real problem facing your business.

Cost accounting

Look, we have one of the weakest dollars (in the world) ever. We should be exporting like mad! We should be sending stuff to Europe night and day. 'Stuff' is a technical term for "goods and services". Many years ago, my eCommerce business used programmers in New Zealand because the exchange rate was like forty-two cents on the dollar!

Why are we still exporting jobs overseas?

Cost accounting

Until you change your vantage point, and look at your business through the eyes of your customers (or prospects), you are going to be subject to the whims of the idiots that write headlines for a living. Sorry, editors are not idiots. I love mine like a sister (hi Thayer)... by the way, I do not take the time to have her edit my blog posts (as much as she would like to!).

Editors of the news get paid as a direct result of viewership. Recession headlines sell.

But you do not have to participate.

Lets do an Exercise

Consider drawing a line in the sand. Yes, that is much easier for us with an ocean in our backyard (well, to be honest, it is actually two miles away). So, take out a piece of paper. Draw a vertical line from the top of the page, to the bottom of the page, right smack down the middle of the page.

On the left, write down the word "DR" and on the right, "CR".

Oops. Sorry. We just made a huge T account (inside joke for all us bean counters out there!).

On the left, write "Internal" and on the right "External".

Now, consider this simple question: "If your business were to double in sales today, could you produce the required 'stuff' to meet this new demand?"

In others words, if you did $100k in sales in March 2007, and you do $200k in sales for March 2008, can you produce the necessary product to meet this demand? Without adding personnel? Without adding on to your store/building? Without buying more equipment? Without upgrading your computer?

Down the left side, right down all the roadblocks to doubling sales. List only the items that you control, or what we call internal constraints. Eli Goldratt gave us the term UDEs (undesirable effects). As in, we cannot double production of the XYZ Widget because our Mazak CNC lathe is already operating 24 hours a day! As in, both our inside sales reps are on the phone 7+ hours a day now!

You must identify your weakest link. Those that own my book know where this is headed. For the rest of you, more tomorrow.


Jeff 'SKI' Kinsey, Jonah
Throughput.us LLC
(330) 432-3533

©2008 Jeff SKI Kinsey. All rights reserved.

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