Many of the problems we face today probably have no quick and easy solutions.
Yet, quick and easy solutions are what most people seem to want. This apparent
focus on only the short-term makes it difficult, if not
impossible, to solve our present problems.
Notice, I said focus on only the short-term. It is clear that all businesses have to
be aware of the short term picture, but to focus only on this
leaves them blind to business opportunities that may take
decades to develop.
This article lists some of the changes that we may need to make to move
forward in our long-term problem areas: education,
transportation, health care, and retirement. These are all
long-term problems that cannot be fixed with quick solutions.
This is why we continue to face these problems and will
continue to do so until we change our focus.
Let’s take a look at one of the areas. Specifically,
domestic transportation. Some people like to point to labor
unions as the main, if not sole, reason for what ails US car
manufacturing. While poorly led unions may be part of the
problem, the facts suggest the larger and more complex
problem is management focused only on the short term.
The domestic vehicle manufacturing industry has been in a
decline for some time. While GM was trying to build bigger,
more expensive, and less efficient SUVs and trucks, Toyota
and Honda also invested in developing bigger SUVs and trucks.
But they also invested in hybrid vehicles – both big and
small. Toyota and Honda are now among the leaders in hybrid
vehicles (although recent sales have slowed). As the price of gas passes $3 per gallon, heading
toward $5, people are buying them by the thousands.
Were domestic car manufacturers blind? Did they not see
the indicators that clearly showed fossil fuel costs would
increase, substantially? I don’t think so. I think they saw
the same indicators that Asian manufacturers saw, but the US
chose to ignore them because the US is focused on short-term
profits. Hence, we were unprepared.
Making a shift from the internal combustion engine to
hybrid vehicles did not occur over night. It took decades for
the Asians to develop the technology to make this work. But
because of our short-term decision not to pursue alternative
technologies, we don’t have the vehicles that people want to
article takes a look at another example of how short term business
decisions have negative long-term effects. In this case, on
retirement/pension plans. Such pension plans are some times
given as an example of the crushing costs employers have to
pay. Yet. It is a problem of their own making, based on short
To be fair, it’s not only bad management. There are
factors that management do not directly control. One example
is the globablization of labor. No matter how cheaply you try
to pay your employees, there is almost always going to be a
less developed country that will pay even lower wages (or no
wages at all in the example of slave labor). Moving your
company to so called “right to work” states, eliminating
pensions, and cutting health care may give a few short years
of additional time but, in the long run, many companies who
take this short-term route will find these as temporary fixes
and eventually move manufacturing off shore.
A longer-term alternative solution is to add value to what
you make. Rather than making the engine, that was high tech
in 1950, we can make the engine management system. Rather
than making headlights that were hot stuff in 1920, we can
make high intensity discharge units. Rather than making the
drum brakes that were state of the art in 1910, we can make
the anti-skid disk brake system designed for this century.
Rather than focusing only on cost, we can shift to building
reliable, forward looking vehicles that people are willing to
pay more for.
Yes, this is a shift in the types of jobs to be done. Yes,
this is a shift in the types of workers that are needed. But
the biggest shift is in the focus of management. Do I see US
car makers making such changes? Unfortunately, I do not. What
they are doing are bringing back big block hot rods. The
Dodge Challenger. The
Chevy Camaro. The hemi powered
gas guzzler SUVs. Is this the future that will lead the US back to the
As I said in the beginning, many of the problems we face
today have no quick, easy solutions. Hence, as long as we
focus on only the short-term, it becomes difficult, if not
impossible, to solve our long-term problems.