Monday, August 10, 2015
The American Difference
Very recently, I have returned from a very pleasant vacation in Northern New England. One day, in the far north at a golf outing, I was paired up with an international business man. I assumed that with the 4 1/2 hours around the course and perhaps a beer afterwards, I would have a good discussion with the fellow about international business conditions.
It did not turn out that way. I threw him a softball on the 3rd tee about the future of the dollar. He exploded and I paraphrase, “Who cares. Both the dollar and America are finished. Kaput!” He then went on a vulgar rant about how more than half of Americans are on the dole and the few people like him who were holding things together were fed up. It was the Mitt Romney 47% statement from the 2012 Presidential campaign but wildly exaggerated and in really bad taste.
I gently brought him in to my world of demographics and refuted his inaccurate and reckless statements. He became quiet but I noticed with fiendish pleasure how his backswing was way too fast on the next several holes and he lost at least one ball on each hole in the woods or the water.
Finally, he seemed to calm down and asked me why America would survive. I agreed that we had problems, big problems, but not nearly as severe as he painted them. Also, compared to the rest of the world, we were in far better RELATIVE shape. I then talked briefly to him about one important aspect of the American culture--our entrepreneurs.
American business people are resilient. Most entrepreneurs fail before they hit a business idea that works. It is not unusual for a man or woman to fail 3-5 times before their ship comes in with a winner. Economist Fred Gotheil put it beautifully when he wrote--“Unfaltering persistence defines the entrepreneur no less than creative energy.” Compare that to other cultures. Japan has been on an economic decline for close to 25 years. Part of it is due to the refusal of the culture to accept failure. Many zombie companies still exist there year after year as the banks refuse to foreclose despite inarguable evidence of mal-investment that needs to be swept away permanently. They also have zombie employees especially at large companies. I vividly recall a WALL STREET JOURNAL article from several years back describing how some employees at Japanese firms spent up to 10 years virtually doing nothing prior to retirement. Some stayed in reading rooms all day. It was more important for management to save face and guarantee lifetime employment rather than do what was right for the long term interest of the company. Couple this cultural issue with a rapidly aging population and things look grim in the long haul for the original Asian Tiger.
A few weeks earlier, I had received an e-mail from a French communications executive who essentially told we Americans to count our blessings. With a few slight edits, he said--“You Americans are so funny to me. I love to speak with American business people but all of you complain about regulation in your country. My friend, you do not know what regulation really is. I have employees, Don, that you once described as “zombies.” It is almost impossible for me to make someone redundant. The government rules make it very hard to remove people. I have smug staffers who do little and know I am not going to do much about it. I am told, in America, you can tell an agency staffer
‘things are not working out’ and they are gone that day. Is that true? Amazing!”
In the U.S., 30% of new businesses fail within two years. In the first five years of an enterprise, the odds are 50% that it will fail. Yet, there are no shortage of entrepreneurs who are opening a new restaurant, service business or even an ad agency. Many, of course, have failed before but are giving their venture a renewed sense of dedication and energy.
After the financial crisis of 2008-2009, I was worried about this country. Former Federal Reserve Chairman’s comment that if “a financial institution was too big to fail, it was too big” still rings true to me.
Yet, the angry comments I heard on my vacation do not resonate with me at all. There are still millions of Americans (many fairly new immigrants) who have an entrepreneurial spirit that will not be snuffed out. To me, they remain our best hope for the future.
If you would like to contact Don Cole directly, you may reach him at email@example.com