Made in The USA
By
James T. Bogden, PMP
Made in The USA alluded to a sense of nationalistic pride in which an individual’s hard work is forged into quality and durability. The unfortunate circumstance is that Made in The USA turned out to be sandcastles in the surf’s wash. The mantra eroded as time passed, entire industries seemed to commoditize. The first attempt to resolve the commoditization problem was to send production offshore, outsource labor, and divest American businesses with foreign ownership diluting the Made in The USA sensibility. Made in The USA became a run-of-the-mill brand alongside Made in Japan, Made in China, and Made in Mexico. As the commoditization worsened, industry gained a growing and influential new partner, The Government, who contributes nothing productive and takes an increasing share of the revenue. At the same time, most business seems to have lost sight of their purpose; policy became king, human labor was treated as robots, narcissism became the new normal in workplace relationships, and sociopolitical causes seemed to have become the focus over commerce. Work had become a drudgery of endless tasks, political correctness, narcissistic personalities, and with little focus on commerce.
In another attempt to overcome the worsening commoditization, investor groups bought up companies using a brand saturation strategy to consolidate incremental market share and sustain earnings since markets were not growing at substantive rates. This effort usually bought companies competing in the same market then bought the tier 1 supply chain, sometimes both upstream and downstream to control the wholesale and distribution channels. Companies became product brands which then became bland as the investor groups sought to standardize production across all the purchased companies seeking an economy of scale to lower production costs. The result has been little difference between brands other than market perception.
The commoditization phenomenon will continue until some phenomenon ends the cycle. While all that sounds dreary, my focus is not on those issues so much in this post. That does set up the discussion on some of the critical factors affecting that commoditization cycle as well as solutions to the problem.
Aside from a maturing product or service, one of the Super Cycles known as the Kondratiev Wave is the underlying driver attenuating profits. The wave is characterized as the 30-year rapid growth cycle of wealth creation followed by a 30-year low growth cycle of increasing commoditization. Repeating the wave is indicated by 20 years at the end of the low growth cycle that has a short economic boom, a bust, a major war (the common phenomenon that breaks the commoditization cycle), then a new way of living upon entering the next rapid growth period. The emergence of this wave was with the formation of modern economies out of feudal Europe. The wave coincides with significant American history; The Revolutionary War, Civil War, World War II, and the current period.
The United States has seen the Dotcom and housing boom, a bust period, and many predict that a major war is coming. Futurists predict that networks, information, and the Hybrid age will be critical factors in the next rapid growth cycle. There are numerous networks to include social, informational, communication, and logistical that will become more important as rapid growth begins. Information is not limited to silicone-based binary data but also biological-based information to include nanotechnologies, the genome, and tri-state logic. The Age of the Hybrid is a blurring of domains to include virtual and physical realities, biological and silicone-based processing, and other domains that will become fuzzy. Out of this prediction by futurists will yield new markets for products and services not yet imaginable.
Given a future vision of the new way of living that is coming and the 30-year boom cycle, industry can be poised to act. Those actions should be based on a free market and free enterprise even though Governments have partnered with industry placing constraints on their ability act.
Free Market Capitalism is creativity in service to humanity. There are numerous instruments used to move the economy forward and overcome commoditization, such as creative destruction, disruptive technologies, as well as other forms of innovation and invention. The old axiom was that necessity is the mother of invention, but the accurate axiom is invention is the mother of necessity. Through invention and innovation, new markets are possible, and with new markets comes wealth generation opportunities. Commerce is the vehicle through which creativity, intellectual capital, is monetized.
In a simple-minded thought, commerce and business cannot exist without people but people will persist without business or commerce and people did persist before the formation of modern complex economies and communal farming. Commerce’s purpose in a free market is to redistribute wealth based on productive value. Business is the vehicle to redistribute wealth. Therefore, business at its core serves humans by providing each human with just rewards for the fruits of their efforts. People who are business owners take a risk and have responsibilities, and they receive rewards for those risks and responsibilities. Owners, at one time, touted about their responsibilities to the staff and their families. Staff perform duties and have responsibilities receiving just rewards for the fruits of their labor. The opportunities are equal, but the rewards are not equal due to the inherent nature of risk and responsibility. Business is really about giving people the incomes that dignify their lives and families. Businesses have to be successful to provide for those people.
Success in the coming rapid growth period begins with proper strategy, deliberate decision-making, and the ability to put the strategy-to-task in a way that manages complexity and risk. Unfortunately, leadership seems to have become distracted trying to stay afloat in commoditizing markets, overwhelming regulation, and social causes that have little alignment to the business. A newer model is needed to refocus industry, and a fresh approach must be employed. Effects-Based methods used by the military and applied to the private sector offer some exciting solutions to put vision and strategies to the task.
The Effects-Based method is an ideal instrument when combined with deliberate strategy development and the proper implementation methodology. Effects-Based thinking is a paradigm shift in thought. The old way of thinking was attempting an increase in revenue, which is a measure of effectiveness and not an objective or inventing a thing. The goal should be to achieve a desired effect or outcome while managing undesired effects or outcomes. Solutions such as inventing a thing, creating a tangible deliverable, or providing a service, are then a chosen means in the process of achieving the effect. A measure and indicators determine when the effect is achieved. In this effect’s framework, there are ways to manage complexity, uncertainty, develop the strategy, and apply actions to pressure points that aid in delivering the desired effect. I will discuss the Effects-Based method in more detail later.
Made in The USA has the possibility of meaning something again, but only if the industry leaders can focus on the core purpose of business and monetizing creativity. The refocusing industry may require Governments to rethink the relationship with industry as well. Corporate Governance should have a stronger alignment with the business; dropping sociopolitical causes not fully aligned with the operation. Then apply deliberate decision making and planning to take strategy-to-task in the rapid growth cycle that is quickly approaching. Significant wealth creation is coming. Will you have the right stuff to monetize creativity and put strategy-to-task?