Some 235 years ago Adam Smith wrote about what we call “the invisible hand”. Smith said that as each individual works to improve his or her own personal situation this results in an improvement for the economy as a whole, and thus improves everyone’s welfare. This principle has become recognized as one of the key drivers of the enormous wealth created over the last 200 years, and the consequent improvement in living standards for all who live in societies so guided.

This improvement in living conditions is sometimes hard to grasp. I was at a history lecture a few years ago where the lecturing Professor was asked “Did wealthy people 100 years ago live as well as wealthy people do today?” His response was that “100 years ago no one in our country lived as well as the poorest of us today”. We forget that a bath was a bi annual affair. Inside plumbing was just coming into use, as were cars, airplanes, and electricity. Radio, TV and things such as cell phones were a distant dream.

So what does Adam Smith have to do with the Occupy Wall Street protests? The protesters have varied objectives, but it seems that one recurring theme is to get rid of “corporate greed”. A corporation is, of course, a legal person allowed by law for the purpose of aggregating wealth for use in pursuing expensive ventures. Corporate greed? The invisible hand? Sounds like the same thing to me.

Do the Occupy Wall Street protestors want to throw out this approach to creating national wealth, and the consequent benefits it has accrued in recent centuries? People like Karl Marx also wanted to throw out this approach, but he offered an alternative. Unfortunately for his adherents, his alternative was a colossal failure in countries that tried it. But the question remains, what do these protestors want as an alternative?

One adage we hear a lot these days is not to quit your job until you have another one lined up. Shouldn’t we say the same thing about replacing economic system that lies at the base of our long term growth in prosperity?

1. Relative to what? We all have opinions, but they are all relative to some base assumptions that we often do not choose to examine.

2. Who are they? The infamous “they”. When a business representative, referring to another area of his or her company, says “they will/will not . . . “, how do you feel?

3. When should I do it? How about now?

4. How do I get people to listen to me? Is it the quality of the information, or how it is presented? Or where? Or to whom, which is usually how this question is directed.

Jim Hirshfield
May 26, 2011

Any organization that serves others must provide what is commonly called Customer Service. That is, when a customer has an issue, they need some one to call who will get the issue resolved. Here are some thoughts on providing excellent Customer Service:

1. Don’t give the customer any reason to call. That is, anticipate and fix problems before the customer ever sees their effects. We used to hold top level weekly meetings where we reviewed all unsolved customer service problems. More often than not these were new issues, often easily solved, but things the customer service people had not been trained to address.
2. Get rid of those extensive call director menus, and allow your customer to talk to a real person, quickly. I know this is a cost issue. My solution? Allow the customer to self select into a longer automated queue if they are comfortable doing so.
3. Have your Customer Service people take charge of the customer’s problem, lift it off of the customer’s shoulders, give your people a procedure for dealing with these things, and compensate them for doing so. Get back to the customer when a solution is provided.
4. Training, training, training. How can you expect your customer service people to know the answers to all the problems that might come up if you do not gather information company wide, craft solutions, and inform your people about them?
5. Compensation. Craft a structure to pay good employees for good work, as an incentive compensation plan laid over base wage.

Remember, you will not receive a call from your customer when he switches to your competitor.

Health Care Reform

It is interesting how the process of making public policy highlights so many of the business adages in my book Fortune & Freedom: The Entrepreneur’s guide to Success. Previously I wrote about the need to define the problem before you attempt to solve it, and noted that little of this had been done in the national debate on health care. Someone must have read my blog, because starting shortly thereafter all I have been hearing about is the goals of health care reform. Unfortunately, there has been little discussion about specifics that would address those goals.

So let me give you an illustration of a business fallacy titled “Oh no, you did exactly what I told you to do!” See the picture in my book of the man with anguish on his face? He has just seen the result of his hasty solution to a problem he has not taken the time to define and analyze. Will this be all of us after the Health Care Reform initiatives become law? Or, to say it another way, let’s go back to the issue raised above, define the problems we are working to solve (there are plenty of them), and discuss and agree on solutions to those problems.

It seems to me that most people agree on the need and the goals of health care reform. The problems lie in laying out solutions to specific health care problems, and discussing and agreeing on these solutions. Pretty much all the discussion I have heard to date is vilifying the other guy for not agreeing with you. You certainly could not stay in business if you ran your company that way.

In my book “Fortune & Freedom” The Entrepreneur’s Guide to Success”, I note in Part IV that identifying the problem before solving it is priority number one. I quote my middle school math teacher who said: “If I had ten minutes to solve a problem, I would spend eight minutes reading it.” So what is the problem we intend to solve with the proposed new Health Care Legislation? Is it covering people who do not have Health Care Insurance? Covering people who do not want health insurance? Or is it cost?

The President at various times says it is both, and that the present high cost of health care is caused by the profits of the for-profit insurance companies (not all providers are for-profit organizations). Some politicians such as Robert Reich assert that government competition to private providers will bring down the cost. (If you believe that, I have a bridge in Brooklyn I want to sell you – but back to the subject at hand). So what is the problem we are trying to solve?

And, of course, the above is only talking about the evidence of the problem, not its causes. So once we decide whether we are solving the problem of cost or coverage, we then need to identify the drivers, the problems that cause high cost or spotty coverage. Only after these drivers are defined and agreed to can we start to craft a solution.

Have you heard the phrase “A solution in search of a problem”? We need to be careful what we wish for. Our wish might be granted.

Jim

OUT OF WORK?

That question is being asked more often in recent months. If your answer is “yes”, then in addition to seeking your next job opportunity, you might consider working on future opportunities in general.

In “Fortune & Freedom” I talk about the need to accumulate “necessary skills”, whether you intend to become an entrepreneur or simply to improve your future job performance. Those skills include selling, learning how our political system works at the grass roots level, and others. (Take a look at the Table of Contents on the www.furtuneandfreedom.biz web site for the list of the five key skills I think are important).

So between job interviews volunteer in a political campaign (yes, they are going on even now), get a job selling on commission, or take a course in accounting. My book has a lot more detail on what I recommend. So go for it!

Jim

Let me make a couple of points. First, a credit crunch arises in an economy when a meaningful number of people come to believe that they might not get their money back from their bank, stock investment, etc. Given this, repeatedly telling people that they are likely to lose their investments and then jobs if they do not support a candidate or vote for bailout legislation, is the height of lunacy. No wonder we are seized by this credit crunch.

Second, people pay $3 million for a 30 second super bowl ad because by and large advertising on television works. Wouldn’t you thus think that several years of media bombardment telling us how poor the economy is might have a similar effect? We used to call it Bush bashing, then election politics, and now bailout, but it is all media advertising, and the message has been the same.

Who is surprised by where we have come to?

Jim

A Writer’s Budget Take a look at the attached Word file link. It contains a budget worksheet for a self-published book. This information was no where to be found when I embarked on my writing project. Perhaps you will find it helpful.

“Almost everything we do involves making a sale.”

This point I make in Fortune and Freedom is never challenged. Interviews, presentations to supervisors, employees, parents, and community groups all require us to articulate a message and present benefits of doing something within a specific timeframe.

Yet selling to potential customers frightens people more than death.

Many firms have even decided that sales departments should not be referenced on their respective org charts.

“Business development” and automated systems designed to avoid contact with other human beings are popular. I find the most successful companies and business leaders still acknowledge that sales is a learned skill. Respect for this skill usually follows.

Jim Hirshfield

Author

www.fortuneandfreedom.biz