Maintaining a Nation's Economic Superiority

Economic development is an important topic of discussion for academics, business leaders and government staff. Without a strong economy the country becomes subject to the powerful economic forces of other nations. Maintaining America’s dominance in economic influence is every bit as important as having a strong military. Proper labor and capital management can lead to higher levels of national productivity.

Productivity is a process of creating output with value that adds to the economic strength of the nation. Because we exist within a global world that economic return is generated by selling products increasingly overseas. A nation can focus on the amount or value of products in order to generate wealth back to their home countries that leads to more jobs and the raising of standards of living.

There are a number of ways an economic system can produce more value and create higher levels of national relevancy in the world. According to John Kenneth Gabraith in his book The Affluent Society (1958) the output of the economic system can be improved in five different ways:

1. More engagement of productive resources such as labor and capital (including materials) by eliminating idleness.

2.  Labor and capital can be combined in a way that can better meet consumer tastes in products and services.

3. The supply of labor can be increased.

4. The supply of capital can be increased.

5. Technological innovation can be better used to improve labor and capital.

National systems should seek to enhance their economic engines through fostering international investments in local companies that lead to better use of resources, capital, and labor in a way that enhance the value of regional outputs. Capitalizing on core competencies through education and technology puts resources to better use to generate higher levels of income, jobs and government revenue.

Galbrath, J. (1958). The Affluent Society. NY, ON: A Mentor Book

Do You Manage the Metrics or Does the Metrics Manage You?

Metrics are an important method of understanding what is happening in your business at any particular time. It provides a feedback loop that helps executives make decisions about business strategy. Even though metrics are important, it is equally important to understand that metrics don’t tell the whole story as one can become derailed by over-reliance on metrics.

You need to know how many products are being made, rejection rate, overtime, staffing numbers, sales volume, stock value, time spent on activities, and customer perception. These metrics, in addition to the thousands of others, help describe how a business is functioning. It is possible to run some metrics by the day, month, quarter, year, or decade to get a better grasp of what is going on.

Metrics can also influence employee performance in positive ways by letting employees know that their contributions count. It provides a level of feedback and expectation building that is used for evaluating employee performance. The numbers help motivate and define the nature of work.

The downside is that numbers take on more importance than the actual work and organizational output. This occurs when metrics take on a life of their own and become the focus of employees who want to seek praise and rewards without actually servicing the needs of the company. The focus switches from the customer to the numbers.

The consequences of switching from real life customers or outputs to numbers are that the numbers become the main focus of operations. It is possible to meet all of the numbers but still be turning away customers or turning out an inferior product.  If your business is not measuring properly then the numbers become a type of smoke and mirrors to what is actually happening.

Metrics should be used to create a full picture but also should not supplant common sense in managing entire process. If the numbers take on a life of their own organizational targets may not be hit even though the metrics are giving positive results. Adjusting and changing the metrics from time-to-time can ensure people don’t only focus on the numbers.

Trees or Forest-Manager or Executive?

Seeing the trees or the forest is a good indication of the caliber of the person you might be assessing for future positions of authority. Everything exists within something else greater. A tree exists in a forest in the same way as your finger is part of your hand or a feather is part of a bird.  The level of thinking is based on how much a person sees in any particular situation. In business this seeing leads to all types of strategic improvements.

The first thing we should understand is that seeing is based in differentiation. Differentiation is the ability to compare and contrast at least two things to better understand them. An experienced eye can see much more than an inexperienced one in the comparison process. This is one of the reasons why more knowledgeable people guide less knowledgeable people to higher forms of understanding.

Two people can look at the same thing and see different things. For example, a manager may focus on their daily functions while an executive focuses more on the bigger picture. When a person can see the trees and understand how they fit within the forest they are able to create better strategic plans.

If a candidate can only see the trees and does not have the systems thinking skills to see the forest they will never make a good executive. The big idea is built from the experience with the small ideas and only a few people will be able to make a leap to connecting the trees together into a system.

It is this systematic thinking that allows a person to manipulate an entire forest to ensure that it works at its optimum. They understand which trees, in what arrangement, make up the foundations of the root system and which trees are expanding that root system. Diseased trees are nursed to health or removed from the system.

Success of organizations requires selecting, recruiting and grooming future managers and executives to positions in which they mentally qualify. Not every manager will make a great executive just in the same way as not every employee should be a manager no matter how well they perform their daily function.

Critical Thinking among Business Graduates

Critical thinking is the art of understanding that delves into the alternatives to generate the most feasible answers. Business students should learn the art of focus and thinking to make better decisions that impact operations. At times we become subject to our own way of viewing the world and it is necessary to break the mold to discover something new. Critical thinking can be learned with years of practice and implementation.

Critical thinking is lacking in many business schools in a way that limits the nature of business thinkers to make proper strategic choices. Business schools should provide a clear definition and the ability to integrate critical thinking into their curriculum (Bloch & Spataro, 2015). Future managers should have a solid ability to understand and use critical thinking upon graduation.

Critical thinking is the objective analysis of a topic to form an opinion. This is harder than you think as each person holds all types of bias and false beliefs that seem like the only viable answer to a complex issue. The problem is that bias is based in our personal experiences that are hard to refute because our perception creates our reality.

Those that can combine personal experience, knowledge, theory and the experiences of others can create a different sense of critical thinking. Viable alternatives are evaluated based upon objective criteria that lead to a logical conclusion that removes as much bias as possible. Formal metrics and analysis can help balance personal thinking and scientific thinking to understand events in a real way.

Ensuring that business schools help students make proper assessments of situations and then design appropriate strategies is helpful for making future managers. Integrating the knowledge into courses is helpful as students need to have solid definition and a working model of how critical thinking in real life scenarios. Letting them explore their thinking is one of the best medicines for higher performers when they make it to the market.

Bloch, J. & Spataro, S. (2014). Cultivating critical-thinking dispositions throughout the business curriculum. Business Communication Quarterly, 77 (3).

The Customer as a Co-Creator

Businesses often forget that the customer is the end user and they determine the success of any product, service or organization. Designing products with the customer in mind is important but using customer’s feedback in innovating those products can create higher income streams. Reaching out and asking customers for their feedback can take different forms in today’s world. 

The product development process includes ideas generation, screening of ideas, development and testing, business analysis, marketing testing and commercialization (Finch, 2012). New ideas are reviewed for feasibility and then then tested to ensure they work. A thorough analysis of the profitability and marketability of the product is conducted before mass production. 

Great ideas can come from many different locations. An often untapped source is the customer themselves. Product reviews, focus groups, and questionnaires were some of the tools to gain insight into products. As Internet technology develops new ways of collecting and evaluating customer information is beneficial. 

The process of evaluating customer preferences can be as easy as reading online and asking customers directly or as complex as conducting living labs and designing in-depth psychological experiments to understand latent factors. Collecting that information and using the feedback loop to improve products/services over time is beneficial. 

Product and service development takes time. Listening to customer needs helps to develop higher levels of understanding of consumer needs that should be funneled through product/service design to increase customer satisfaction rates. Without this input significant resources are invested into items that don’t appeal to customers and won’t generate significant returns on investment.

Finch, J. (2012). Managerial marketing. San Diego, CA: Bridgepoint Education, Inc.