INEFFICIENCY GROWING IN AMERICAN ECONOMY
By Ben B. Boothe, Sr. Publisher, Boothe Global Perspectives
In our company we do business with all kinds of companies, investors and properties, from coast to coast. One of the things that enhances company and business value is efficiency. When we are appraising a building or a business, we take into consideration efficiency. Sadly we are observing more inefficiency in the USA these days.
We have had a host of business executives comment upon how “inefficient” doing business in the world, and in the USA has devolved to in the most recent 2 years. Some even go further back and mention the new global tariffs, established by the USA 2 to 3 years ago, as penalizing some international business efficiencies. Hundred of corporations have been hurt by new "tariff wars" and some industries and thousands of farmers have gone out of business. But of late, with the Corona and Delta virus pandemics and related economic downturns, efficiencies in manufacturing, transportation, shipping, access to supplies, parts, products, even foods, all have been damaged.
For example: Some industries such as automotive and corporate entities that need semi-conductors and other high tech components have suffered. One international auto manufacturer just curtailed the annual auto production lines for lack of access to high tech parts, semi conductors and others.
Domestic supply and distribution lines have deteriorated. Trucking has become curtailed in some places for lack of drivers. A simple example, is two recent stops to Staples business and office supplies, that we have bought computers from, could not provide toner “Because we can no longer get the toner from China”... making some of our printers useless. Another example is a big hog producer/rancher in Oklahoma told us of having to kill his annual herd because of transportation and other issues of meat processors who deliver "finished meat products" to grocers.
From telephones, to computers, food supplies, avionics, and on to heavy industrial products, efficiency has deteriorated, supplies have suffered, and even servicing and repairs have become more expensive and sometimes impossible.
Some of the inefficiency is caused by lackadaisical employees, poor training and management, plus poor systems and poorly motivated employees.
Let me give you a small example of a survey we did in city in the Southwestern part of the US, but see the below article first.
The Wall Street Journal , in an article by Sara Chaney Cambon (we saw on the internet) article of July 29, 2021 alluded to the problem: We credit her for the good quote and recommend that your read the entire article in the Wall Street Journal.
Sarah Chaney Cambon
Updated July 29, 2021 3:51 pm ET
“The U.S. economy grew rapidly in the second quarter and exceeded its pre-pandemic size, but the outlook has suddenly turned cloudier due to the fast-spreading Delta coronavirus variant.
Virus cases are rising again, particularly in parts of the country where vaccination rates remain low. The Centers for Disease Control and Prevention this week recommended that vaccinated people resume masking indoors in places with high or substantial transmission of coronavirus, leading some local governments and businesses to reinstate restrictions on activity.
Apple Inc., for instance, said it would require workers and customers to wear masks in more than half of its retail stores, and Google delayed its return-to-the-office plans until mid-October. Several private and public employers have said they would require workers to be vaccinated or regularly tested for infection.
All of this has raised uncertainty about whether consumers and workers will retreat again, as they did last year.“ We suggest that you read the entire article, but it alludes to motivation, confidence, and uncertainty, impacting productivity.
I START OUR EFFICIENCY WITH EXAMPLES, OF OUR SURVEY:
My wife and I decided, to wear our masks and get out and go out to lunch a recent Sunday. We walked into a La Madeline’s resturant. We walked in and tried to catch the eye of one of the workers behind the food counters. They ignored us. No greeting. So we walked into the food line to order their famous Caesar Salads. A clerk walked by us 2 or 3 times, never made eye contact and ignored us. So we walked further up the line, closer to the cashier. She ignored us. Finally the clerk that was “running” the food service line, walked to the front of the store and started a lengthy conversation with another employee and a man who we thought appeared to be a manager. None of them bothered to take our order, greet us, let us know they would be with us later, the service was terrible. We tried to catch any employee's eye, but they ignored us.
So we quietly left and walked into a Jason’s Deli. When we walked in to the crowded room an employee said: “Welcome, what can we do for you?!” We asked if we could order a “salad bar” the cashier said: “Of course” took our credit cards and said: “Go 8 steps to the end of the counter and your plates will be ready”. When we got there a lady said: “Two Salad bars, all you can eat, here are your plates. Call us if you need anything else!” As she smiled. It was such a contrast. Plus we enjoyed a free ice cream cone and miniature "sweet treats" after the main meal.
We figured the difference was:
- A motivated, well compensated and well trained happy staff
- Good organizational ‘service’ policies, good employee motivation and training
- An attitude that customers were valuable and important
- Plus, the food was great and we left filled and happy.
- Pride in their business and the service or product they delivered.
- Good communication skills of employees.
Within ¼ mile of each other, one national “food chain” store had a lot of empty tables, a room with employees that seemed distracted or not attentive to us customers. The other resturant was filled with "eager to please" employees and happy customers. One was efficient, in the “before the Pandemic” style of business, the other was inefficient in the “Covid/Delta pandemic” shadow. At Jason’s deli they even gave us protective plastic gloves as we selected and ate our food, if we wanted to wear them. At La Madeline, they didn’t greet us, welcome us, ask what we wanted to order, indeed they didn’t even offer us the time of day or acknowledgement for walking in. No doubt we, and other customers who experienced that kind of service will not be motivated to return to a place that seemed to us, almost hostile to customers walking in. Well, give them the benefit of the doubt…perhaps the staff was just having a bad day, or worse perhaps they didn’t feel good. Who knows? We got the bad vibes and moved on. No harm intended to La Madeline, I have enjoyed their food for decades at other locations. But perhaps this "bad day" goes back to training and motivation of "the manager" or perhaps the staff...or who knows, perhaps someone just didn't feel good. We are certain they will observe and correct issues as they see them.
Now we don’t want to judge an entire chain or franchise, but we have noticed from dealing with hundreds of corporations, investors, businesses, that there is a oft heard refrain: Some companies, workers, corporations, or even local managers, simply are finding less efficiency, less pro-active motivation, or simply not the “gung ho” worker, management style of striving for excellence that the American economy and American worker has been famous for. An efficient worker, business, management, corporation, tends to have more marketability and appeal to investors and the general public. Plus, in business terms, or appraisal terms. An efficient business is a more valuable business.
Our firm deals with hundreds, or thousands of companies, in determining appraisal values and marketability, but we notice that positive, well motivated, well organized, companies with good policies and training, seem to do well, and are more attractive to clients/customers. They are also more attractive to investors, and bank lenders.
Just look at Afghanistan. Thousands of people are trying to escape the country because they don’t like the “style” of the Taliban vs the style that American investors built a dynamic economy often leading the world. One style is based upon negative motivation of fear, anger, rejection, hostility, even physical threats. The other a style based upon the motivation of building and growing a more prosperous and progressive society. Which place would you prefer? Similar truths apply to business growth and development, economic growth and successful endeavors. Perhaps we need to encourage people to understand the opposite of inefficiency like the pigeon below.
I think of the U.S. Post office. When I was in High School I worked for the U.S. Post Office to earn enough money to buy a new car, and then bought a brand new Mustang, with bucket seats, and all of my friends thought I was a “rich kid”. But I just went to school in the daytime, and did a night shift at the Post office and earned enough by hard work to buy my new Mustang. But then, we who worked at the Postal Service, were proud of the U.S. Post office, we were all led by managers who insisted on “2 day first class delivery” and efficient parcel post processing. Now, at my appraisal company, in 2021 typical first class mail delivery averages about 6 days, and parcel post can take weeks…yet the postal services have better delivery equipment, higher wages, faster air mail, more modern facilities, now than they had when I worked there decades ago. What is the problem? Perhaps lack of good management, operating systems, motivation and training. Perhaps a stale attitude lacking the “striving for excellence”, that the Postal Service had so many years ago. Perhaps a lack of pride in their service. I interviewed a local postal delivery person and that person just said: “We are overworked, not appreciated, management has irrelevant ideas and some workers who do routes are so unhappy they take an hour or two a day longer to do delivery routes, often delaying mail to near sunset.” It appears that this is an example of poor management poor systems, poor motivation of staff and change in what once was the most efficient mail system in the world into a national joke? Our company sent out a simple 1,000 piece promotional mailer advertising our appraisal company, a large number of them were stamped “no such address” and we checked, and a high number of the returned items were correct addresses. It appeared that someone at the postal service just didn’t want to deliver them. Either that or they were incompetent. We will never know, because when we wrote the postmaster, to inform him, we got no response. Just another example of inefficiency in America. All I can say, that is when I worked at the Postal Service 50 years ago, the service had a different management style, and workers took great pride in a job done efficiently.
I visited a local post office recently. It had opening hours posted at 9:00 AM and at 8:30 there was already a line. At 9:00 everyone was eager to get their mail processed, but the doors remained locked. At 9:15 someone slowly walked out and unlocked the roll up counter wall. And by 9:25 finally another worker came out slowly, and in an unmotivating and uneager voice said: “Who is first in line”…by that time the line was very long, 50 or 75 people standing there. All of us were anxious and eager to get to our jobs and lives…while these guys moved around so slow I wondered if they were victims of lack of sleep. There was general conversation among all of us in line about “what every happened to motivation and efficiency” at the U.S. Post Office that we all used to admire. Even Benjamin Franklin promoted the first postal system as an excellent idea for national efficiency. Americans were proud of the U.S. Postal Service. Seems like those workers who were not interested in opening the post office on time, lacked motivation, supervision, training, and pride in excellence.
What about banking. Some banks, as they have gotten bigger or merged, have become less efficient. The bigger they become it seems that their procedure manuals have grown to be endless, and I spoke to one bank officer who said: "The procedure manuals here take us more time than actually doing banking and loans". They seem to hire trolls who love to study and memorize and enforce hundreds of "procedural rules" that make banking with them seem endlessly complicated and hard to deal with. I will share an experience with two kinds of banks. One bank, BBVA USA, was recently bought by PNC. An officer of BBVA invited me to come to his bank, that he could provide me with a Line of Credit. I didn't need another bank, nor did I need a new line of credit, but liked the young loan officer and told him, "I have several other banks, but I will give your bank a try." Over a period of 2 months, the bank summoned me in on 8 different occasions to sign more and more paperwork, to just open a checking account (an account that I really didn't need). I have founded banks, and been a bank President, but the paperwork seemed endless with this BBVA (now PNC). Finally they rejected some paperwork because they claimed that the State of New Mexico didn't seal a business charter form correctly, and instead of simply calling the State Comptroller to get a new copy of the form, they rejected the paperwork. It seemed endless. Just getting the redundant paperwork all completed was taking me, the President of three companies, away from running my businesses. Then they wanted to charge me $220 for a checkbook for the new account (I told them I could get that for $30 at Walmart and no thanks). Then after the checking account was opened and approved they started work on the "line of credit" the young bank officer had approved and promised me months earlier. Same delays and paperwork, foot dragging, and finally, they gave a "line of credit" so low, I laughed. "I run three companies, am worth several million and this isn't enough to even buy a used car...why insult me!" The poor loan officer apologized, and said: "I have no idea what is wrong, you have a perfect credit and sterling reputation...perhaps the new merger or paperwork is the reason." In contrast I walked into another bank, handed them my financial statement, and the banker spun around and started some paperwork. "I am preparing a Line of Credit for annual expenses if you need it". I offered collateral and he said: "No, I already know your reputation, we trust you, this is unsecured." I walked out of that bank in 40 min with a new line of credit, a new checking account with money in it, and a happy feeling. I thought, "I will be loyal to that bank always". Two different banking philosophies. One bank gets more and more of my business, the other, I just hold my nose when I drive by. One has real bankers who understand how to lubricate the financial needs and financial stability of their community, (which is an expressed goal of the Federal Reserve Bank) and the other seems simply inefficient giant entity chained to piles of procedure manuals, where people in other cities and states make the decisions, and don't at all seem like "local banks". I would question how much loan authority local bankers around the country have, or do they have to get everything approved by the "home office". It is a good question any bank customer should ask their bank. They seem to be shells, buried with paperwork and endless policies, set forth and regulated by people in far off states. I will let the reader be the judge of which bank is most loved by its customers.
Let me tell you about an bank that I love. Southwest Capital Bank was founded in Las Vegas, New Mexico and has clients and customers all over the USA. They opened a beautiful bank on Central (1410 Central Av SW, Albuquerque, NM 86104). Southwest Capital Bank is managed by local people, staffed by local people and the owners are local people. It is devoted to helping people in New Mexico (and some around the nation) to grow and do well. They have taken a lead in progressive lending and I have found them supportive, quick and loyal. Which kind of banker do you prefer?
1. Those bankers who can quickly and efficiently take care of customer business needs or
2. Those who hide behind procedure manuals and don't let their local loan officers make important decisions.
Time will tell which business philosophy is the most successful and contributes most to the American economy. Which bank would you prefer? I like banks who know me, who believe in me, and who will back me up, on good healthy projects. When I was a bank president we knew our customers, backed them, were loyal to them, and were willing to make loans and lines of credit, in accordance with good banking practices and goals to help the community economy. The paperwork creators, will created millions of pages of paperwork. I wonder which will ultimately do the most for the U.S. Economy, during this time, when we desperately need good, progressive, competent bankers who truly wish to serve the people in the communities where they serve.
We are seeing a new Post Pandemic nation ahead. I have an idea that there will be a new and different America in the future. It is up to us, proud and motivated American Citizens, to hope we can build a better, new and improved United States. Certainly we are seeing results of the Corona and Delta Pandemic and the recession and unemployment and what appears will be over 750,000 American deaths when 2021 comes to an end. Lets demand better work, motivated workers, inspiring business and social leaders, and an America that can again be a leader of progress and new ideas for the world.
Are you and your business part of the solution and new America that is coming. Or are you buried in paperwork, procedures and endless policies that slow down progress...not create economic prosperity. We need people who believe in efficiency and who practice it at all levels of business. I call out for efficiency, productivity, progressive thinking, good procedures, training and marketing. I want all of us to help America to be see it's best days ahead. Not go backwards in the quicksand of thinking and management philosophies that just suck us under. Lets get rid of the inefficiencies that we see in almost every business in America, and re-educate business leaders who want progress and efficiency above all!