s I was driving down a road in New York State, I passed this sign. Fascinated by its size and complexity, I had to pull over to capture its image. Looking through my viewfinder, I found beauty in the symmetry and color coordination of this monument. The visual aspects of the sign captured my attention, my conscious mind interrupted my appreciation by pointing out that the actual purpose of this sign installation is not for motorists to take pictures of it, but to give directions.
The number of competing directions has striking similarity to the battle of our political leadership about the best way to reduce our debt and balance government spending against the need to build our country. They are clearly confused. If we ran our corporations the way we run our country, we would go out of business. Wait, how far away are we from that? If we would run our country like we run our corporations, we would define our objectives and bring our brightest minds together to evaluate the options and agree on a course of action. If they are unable or unwilling to find a solution, we would simply replace them with team players who work constructively together. As the shareholders of the United States of America, Inc., we, the citizens who elected these leaders, must realize that they are not doing their job. None of them, regardless of which party, are working effectively to solve the country’s problems.
Let’s take a look at the business plan:
Pricing: Benchmark our pricing (income tax rate) against the global competition for income tax and we find that the United States is only Number 39 of the top 100 countries. Virtually every country in Europe, as well as China and Japan, have higher tax rates. There is sufficient elasticity in our pricing to make a positive contribution to our gross margin. Customers (the people of the U.S.) like great products with low prices, but that simply does not work. It does not work for our corporations and will not work for our government. All of us, including myself, must accept a price increase, which equates to rising income taxes.
Product: We need to review products and services both at the Federal and State levels. Product managers hate to change or discontinue their products but if we fail to constantly optimize, discontinue, and innovate, we will lose our competitive edge.
Cost management: The on-going discussion about spending cuts and the heated and utterly unproductive arguments between the parties reminds me of an annual corporate budget meeting. Question your team about their spending plans and each and every departmentmanager immediately paints a picture of doomsday should you fail to approve their plan. We must realize that our government spending is disproportional to our revenue stream and our balance sheet is getting weaker every day. The Department of Defense sounds like a marketing department projecting devastation and a loss of market dominance should we not continue to fund all of their projects. They should ask: How effective are our investments and what is the productivity of every dollar spent? What is truly needed? If USA Inc. would be a corporation, we would definitely need to reduce our operating costs and work harder to improve efficiency. Every single program is up for review and we must accept that structural changes are necessary as a matter of urgency.
Human Resources: It is very simple: if we don’t identify, train, and retain top talent, our company will not be competitive and fail in the marketplace. USA Inc. is structurally underfunding education, which is one of the biggest mistakes being made as it endangers our future. Only 2% of the federal budget goes into education. A fundamental educational reform is mission critical! As we continue to benchmark ourselves against other market players, such as the European Community and China, we must make education our top priority.
The bottom line is that if the executive management does not start working together and make some hard decisions, we must fear for the future of our company.