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The Language of Commerce

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ROI by Frank J. Rich

 

 

 

 

 

 

By Frank J. Rich

 

 

At a time when most are looking for solutions that might encourage economic growth, I’m reminded of a catch phrase in a critical thinking model that recommends lateral thinking. It is simply that the solution to most problems is usually hidden in plain sight. Our myopia, as we search for solutions, is a kind of “refrigerator vision” that afflicts most men. You know, when looking for that snack or the milk to go with it we open the refrigerator door and simultaneously call out, “Honey, where’s the milk?” In almost that precise moment, especially if we’ve spied it on the shelf where it usually resides, we gulp our words, hoping that the rush of air and liquids headed for the stomach will suck those words in too as though we’d never spoken them.

The answer, all too often, is the graphic phrase that a mental picture of things in the “fridge” usually forms. That is, when we give ourselves over to the simple work of forming that picture before asking for help. “The milk is on the door shelf next to the orange juice, where we always keep it.” Shoot—the gulp didn’t work!

Our efforts at mechanization or specialization have grown in us a heightened sense of the convenience in the support system around us. We routinely choose not to do things that can be done by another. Sounds efficient, doesn’t it? But at what cost to productivity? Indeed, creativity and innovation is the habit.

Increasingly, the attitude and skills required to grow opportunity—for oneself and one’s organization—require a knowledge base that itself requires a more comprehensive, root-development mindset than the age of specialization of the past 50 years has recommended. It requires that we become better at surviving in our environment and not just joining it. Surviving first asks of us broader skills. They include such things as a deeper understanding of the markets we work in, the societies we live in, and the cultures that influence virtually everything we do.

In our rush to “fix” the economic problems of the hour have we paused to consider the nature and effect of monetary and fiscal policy, for example? Had we done so we would have been prepared for the recovery effects in an increased money supply, and no less, the effects of the “growth and opportunity” sinew natural to a free market economy.

When the Federal Reserve Bank began its “loosening” of the money supply—printing money and short & long rates changes—M0 (notes and coins, bank reserves) increased, making more money available to people to spend. This usually takes a few quarters to show causal effects, but typically produces sanguine results.

The recent uptick of depressed housing markets in California, Florida, and Nevada draws attention to another fundamental economic principle. When the prices of real estate (a scarce commodity) are low and new construction falls off, demand for housing is likely to rise in a market where supply is limited. The resultant effect is a turnaround in depressed markets.

That’s the good news, so far. As fiscal policy, “Stimulus” or “Tax Cut” kicks in (fiscal policy usually works faster than monetary policy), we expect Americans to regain their confidence in the economy and drive it back to health by their spending.

Next, solutions require that we learn the language of those around us and especially those with whom we mean to have a commercial exchange. Consider the last time you went to the dentist. For many, the mere mention of it raises fear, discomfort, and perhaps even latent tendencies of avoidance, worst-case projections, and formal anxiety. The package defines an experience I call “The Chair.” For its effect on the population, most people (60%) consider going to the dentist among the most uncomfortable experiences, pre, peri, and post. It’s a wonder the dentist ever sees the same person twice.

The protective garb, the gurgling, the hook in your mouth, the pipe grease (lip salve) used to prevent cracks from dry mouth, the rape of an otherwise pristine and private enclave, and finally, the drill, and the awful smell of your teeth being ground to enamel dust summarize the assault that ensues. It’s hard not to feel like a fish ready to be yanked from the comfort of an ashamed smile or the now-friendly excuse for the pain when biting down on fresh seaweed.

So, what does this conductor of Poe’s instruments of torture—Briault probes, college tweezers, burs, bits, picks, and needles—do to turn one from a frightened bundle of nerves to putty in his hands? It’s called learning the language of stakeholders, as it orients us to the style, concerns, and hopes of others. Let me illustrate.

Before a dentist gains a “patient” he has a “customer,” just like all businesses. What happens in the exchange determines whether or not the customer turns into a patient, or in the case of a retailer of goods and services, into a patron—a person who gives continual financial or other support to another, an organization, cause, or activity.

He starts with the notion of opportunity, that is, the opportunity in a brighter smile, stronger teeth, or general dental health. Next, he prepares a model of what will happen, and how it will feel, in order to chase predisposing fears in his emerging patient. And finally, he delivers on the promise, assuring the “patient” that all that was promised has been delivered—an effective model of managing expectations.

The practice applies equally to all businesses, which are reduced to the simple equation of delivering on the promise. When done with care and attention to the language of stakeholders, the results are rewarding. No less, “The Chair” is reduced to a comfortable break in the day. Thanks, Dr. Ed.

In the model of “tax cuts” proposed by the current administration (and growing bipartisan support), the language is the same: note the opportunity in the measure, its unfolding, the practical ways each will experience it, then deliver on the promise while explaining every milestone along the way. And one more thing—be prepared to explain the misguiding of naysayers. The Kansas tax cut of 2012 could have been designed better (reducing the rate on businesses formerly subject to individual rates), but its effects—increasing revenue growth in all years (2012-2016) but 2014 (the result of the commodity price crash and an increased federal tax on some states)—were overwhelmingly positive. Simply, when people have more disposable income, they spend it (marginal propensity to spend), and when businesses have more money, they invest it in productivity stimulants, mostly increased wages. It’s a simple model of supply-side economics.

 

 

 

November 8, 2017 |

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