I’m not sure whether this article identifies causes or effects, but it seems clear that people who profess a religion, delay children until after marriage, stay married, and finish high school, if not college fare better economically than people who profess no faith or religion, have children outside of marriage, get divorced, and do not, at least, finish high school.  The article does not examine whether the more “traditional” lifestyle leads to more economic success or whether people who are more economically successful gravitate toward a more “traditional” lifestyle.  The presented facts are food for thought.

The demographic differences seem to suggest that, as the middle class experienced division since 1960, during a time of broad cultural change in the United States and elsewhere, two seemingly distinct cultures emerged.  These distinctions may help account for the increasing sense of division in U.S. society and among our elected officials, along with the increasing sense of polarization in general.  Whether these are causes or effects, what is the vision of leaders for addressing the causes and the effects?

Leadership and Innovation, Part 1 (10:31)

Leadership and Innovation, Part 2 (10:22)

The Organisation for Economic Co-operation and Development reported that income distribution inequality, as measured by the Gini coefficient, was 0.26 in Sweden; 0.30 in Germany and Australia; 0.32 in Greece, in Canada, in Japan, and in Spain; 0.34 in the U.K.; 0.35 in Italy; and 0.36 in Portugal. By comparison, the Gini was 0.38 for the United States and Yemen, 0.43 in Turkey; 0.47 in Mexico; 0.34 for Egypt,  0.40 for Tunisia, 0.42 for Syria and for Iraq, and 0.4 for Jordan.

Another apparent measure of potential unrest seems to be unemployment in various demographic groups. Table 1 shows the unemployment rate  for 16-24 year-olds and overall and measures of national debt, % GDP of exports, and % college graduates.

Table 1

Unemployment, national debt, export, import, and college graduation levels by country.

Income inequality may not be a predictor of anarchy, unrest, or revolt. Egypt, Greece, and the United Kingdom each experienced unrest in 2011 and had lower Gini coefficients than the United States, while Tunisia, Syria, Jordan, and Iraq each have more income inequality and have experienced unrest in 2011. Then we have Germany, Australia, Canada, and Mexico with less or more income inequality and no apparent unrest, at least unrest related to economic disparity.

The official unemployment rate for all working age people and young people in the United States is lower than in most economically-developed countries and, for most Western countries, is lower than in most economically-developing countries, including countries experiencing unrest and anarchy in 2011. The exception seems to be the United Kingdom. Unemployment rates seem to predict unrest, like the 2011 Arab Spring, but most of the Western world does not seem to be nearing an Arab Spring on the basis of lack of employment.

Likewise, national debt as a percentage of GDP, national budget deficit as a percentage of total budget, and exports and imports as a percentage of GDP do not seem to predict national unrest and anarchy.

Table 2 shows human rights (for 2010 compiled by FreedomHouse.org), and corruption, democracy, and press freedom (compiled by WorldAudit.org) for these same countries. Table 2 also includes  World Economic Forum rankings of  national competitiveness cited by Schumann and Hauslohner (2011).

Table 2

2010-2011 Relative human rights, corruption, democracy, press freedom, and national competitiveness rankings by country.

The data in Table 2 seems to be a better indicator of anarchy, unrest, or revolt. Three tiers of countries seem to emerge. Most at risk, based on the 2010-2011 data in Table 2, are Egypt, Iraq, Jordan, Syria, Tunisia, and Yemen. Each of these countries has experienced some level of unrest in 2011. At moderate risk, based on this same data, are Greece, Italy, Mexico, Spain, and Turkey with France and Portugal nearby. Likely not at risk for anarchy, unrest, or revolt in the near future are Australia, Austria, Belgium, Canada, Denmark, Germany, Japan, Netherlands, Sweden, Switzerland, the United Kingdom, and the United States.

So, are the United States and Western Europe at risk for an “Arab Spring”-like event in the near future? The data does not seem to support a prediction of unrest in most of Western Europe, the United States (or the other countries of North America, Mexico and Canada), or in Australia or Japan. The data seems to point to legitimate concern about the potential for unrest in Greece, Italy, Spain, and Turkey with France and Portugal worthy of attention. This analysis should not be interpreted as suggesting that people in countries with an indication of low or moderate risk will not demand change related to the national economy, employment opportunities, and effective leadership, but only may indicate comparative risk.

Schumann, M. & Hauslohner, A. (2011, August 22). Seeking growth after the  Arab Spring. Unless it can nurture entrepreneurs and create jobs, the popular  movement that toppled dictates won’t make a difference in real lives. Time, 178(7), B1-B6.

Thornburgh, N., Adams, W., Assinder, N., Cooke, S., Mayer, C., & Grose, T.  (2011, August 22). London’s long burn. An  outbreak of arson, looting and lawlessness caught Britain and it’s leaders by  surprise. Why they should have seen the troubles coming. Time, 178(7), 28-31.

The downturn in 2008 was led by a liquidity crisis, a shortage of cash, that resulted from mythical wealth and cash from over-valued real estate. The real estate bubble resembled a grand Ponzi scheme without a Madoff-like figurehead to blame. The feared second dip is not a result of a crisis of liquidity but of confidence and uncertainty. Bruder (2011), writing about Egypt following their Arab Spring episode, observed that investors do not and will not pour capital into economic environments when the direction of the country is uncertain. In that regard, the current climate in the United States is similar to that of Egypt.

Hough (2011) observed that publicly-traded U.S. companies, excluding financial companies, currently hold 12% of reported assets in cash, the highest reported level since 1954.  Business executives are unwilling to release the estimated $1.2-2 trillion in cash on their balance sheets (Foroohar, 2011), and unknown amounts hidden offshore and elsewhere, until people in positions of leadership lead and re-establish certainty and a sense of confidence about fiscal policy, tax policy, spending policy, the deficit and whether to continue deficit-driven budgets, and what to do about companies and countries allegedly to big to fail. Compounding the uncertainty are conflicts and political turmoil seemingly around the globe and the limited recognition that the issue of debt extends beyond nations to states, businesses, and individuals.

While the political debate in the U.S. capital seems to focus on taxes and entitlements, too little attention shifts to releasing some of the cash on corporate balance sheets. One reason for this may be the dearth of business understanding among elected representatives in both chambers of the U.S. Capitol. The cost of participating in three significant conflict zones sometimes enters the discussion and then seems to dissipate with the somewhat cynical recognition that all this military spending, on personnel and equipment, keeps at least that part of the economy moving.

Debate rages in some circles about what the stimulus actually stimulated. Pouring a ton of cash into the economy logically had to stimulate something, but it seemingly didn’t stimulate as advertised. A review of the projects funded by stimulus money seems to suggest that, at best, the stimulus kept economic indicators from getting much, much worse than they got. On the other hand, very little money seems to have stimulated new spending; the stimulus may have simply enabled companies and universities to pursue projects already underway, and not cut them and their corresponding jobs.

If, as Foroohar suggested, companies will not spend their cash in the United States even with more certainty, then perhaps policy gurus need to provide incentives for that cash to flow into domestic jobs and facilities. Foroohar, citing Nobel laureate Michael Spence, noted that evidence of companies outside of government, healthcare, retailing, and hospitality contributing to domestic job growth suggests the need for the paradigm to shift, yet public discussion of doing something new is lacking. Policymakers seem content to continue trying what they have always tried and somehow hoping for a different result; yes, that is what some define as insanity.

Part of the new paradigm may need to include creation of jobs that allow people to work where they currently live. Such a policy would help people continue to make payments on homes until the housing market recovers. One of the challenges to developing this policy is that, as Foroohar suggested, alignment is poor between the skill sets of the recently and the chronically unemployed and the skills needed to fill 3 million current job openings and unknown yet-to-be-stimulated jobs from the new policies.

Foroohar (2011), citing a Kaufman Foundation study, noted a decline in entrepreneurship in the United States since the 1980s, corresponding to the rise in the financial sector. Why? What will reverse this trend?

Oddly, a Time article from the May 30, 2011 issue (Zakaria, 2011), apparently citing the same study, noted that small business yielded close to 100% of net job creation in the United States between 1980 and 2005. In the May article, the author recommended stimulating small business growth by facilitating basic research, re-engineering the patent, and presumably other intellectual property, processes, rationalizing regulation, and stimulating funding of new ventures. The May article recommended retaining more of the highly skilled immigrants trained in United Staes universities; a variation on this theme, consistent with a seemingly unrelated recommendation from the same author, is to provide the training needed to turn unemployed and underemployed residents of the United States into comparably highly-skilled workers. This does not need to be an either-or scenario; both are feasible as the approaches are not mutually exclusive.

The May article (Zakaria, 2011) identified repatriation of manufacturing jobs and stimulus of production of “high-end, complex products,” retraining, growth industries, small business, and putting people back to work in interim positions to address near-term, dare I  say “shovel-ready,” needs in the country as a long-term and near-term approach to the challenged economy. Good ideas, each of them essential to building the economy sustainably. Not only are they not mutually exclusive but they are also not operating in a zero-sum economic environment. Success of one does not detract from the success of other approaches and, if done right, they can be sustainably additive.

Foroohar (2011) suggested the need for a national economic policy. Concerns by Republicans and Democrats about the concept may derive more from implementation and control issues than about the merits of such a policy. Perhaps out-of-the-box thinking is another area for which the backgrounds and education of our elected representatives has them prepared sub-optimally. Attorneys and politicians, the dominant backgrounds, prepares them for writing policies and laws, but not for being creative in determining the content or focus of those policies and laws.

Sadly, as Scherer (2011) indicated, we are more likely to see political gamesmanship and handwringing than new policy before the 2012 election victors, whoever they may be, take office. While our elected officials in Washington, DC resume the pursuit of their primary obsession, re-election, after the seeming distraction of governing, the U. S. economy and electorate wait for somebody to lead. Voters in the United States, and especially business executives, seem to be watching elected representatives in Washington, DC to see if anybody steps up to lead before November 2012.

Bruder, R. (2011, August 8). Jobs first, then peace. Why we shouldn’t give up on the Arab Spring. Time, 178(5), 22.

Foroohar, R. (2011, June 20). What U.S. Economic Recovery? Five Destructive Myths. Time, 177(25), 22-26

Hough, J. (2011, August 27). Those safe havens you’ve been flocking to aren’t so safe. Wall Street Journal, 258(49), B7.

Scherer, M. (2011, June 20). Grin and bear it. With the economy sputtering again, Washington has no plans to ride to the rescue. Time, 177(25), 28-29.

Zakaria, F. (2011, May 30). A Flight Plan for the American Economy. Time, 177(22), 36-38.

The Mid-Markets Channel of a global telecommunications company completed it best revenue year, thanks in part to the implementation of a new strategy, and the executive team wanted to continue the accelerated growth curve.

The Problem

The increase in revenue for the channel, consisting of 2,000 sales and service representatives, was largely a result of a 53-branch rollout of the channel’s new operating model. The new model helped increase sales and service representative activity by 45% and sales by 32%. Raising the bar again required new tools.

The company had tried, and failed, on three earlier attempts to introduce sales force automation to its 1,200 sales representatives plus sales managers. The company believed that sales force automation would be part of the answer and recognized that the cost, both financially and in terms of credibility, made the stakes high for a fourth attempt. On the heals of a successful 18-month initiative to implement the channel’s new strategy and organization, the executive team recognized that bottom-up behavioral change was essential and engaged the same team of  “outsiders” to lead the sales force automation design and implementation effort.

The Solution

The timing was ideal. Presenting the sales force automation (customer relationship management) initiative as an opportunity to automate the new processes and behaviors of the field sales force and to equip the sales managers to monitor and manage those new processes and behaviors provided a logical basis for the new technology.

The Approach

The approach consisted of four steps:

• Customize and test the technology to support and integrate with the newly-deployed sales model.
• Modify the sales process to integrate with the technology and capitalize on the automation.
• Implement sales territories to faciltate and manage market penetration.
• Introduce the sales automation technology in three pilot branches, followed by full deployment across the sales channel.

The pilot involved 20 sales managers and more than 100 sales representatives in 11 locations.

The Results

The pilot was successful, based on the following selected metrics:

• Sales per representative (compared to non-pilot branches),  28% increase;
• Sales quota attainment (compared to channel average), 363% increase (40% in pilot locations compared to 11%); and
• Annualized incremental revenues, $19 million.

The automation scope included prospecting, funnel management, activity management, and territory management and dramatically improved monthly sales forecasting and market penetration analysis. The automation reinforced the earlier strategic change implementation and helped internalize new and desired sales manager and sales representative behaviors while increasing the productivity and effectiveness of both.

The client was, and is, a major global telecommunications company who had recently received a new strategic plan from a major global strategic planning consulting firm.

The Problem

Internal efforts to implement a new organizational structure and strategy failed. Adoption by dozens of domestic field offices had no traction and did not produce the increased focus on acquisition and retention of customers. The fundamental strategy called for the client to shift from a geographical orientation to a customer-centered focus, resulting in acceleration of new account acquisition (‘new logos’) and retention and growth within established accounts. Improving customer service relied on changing mindsets of the sales organization and the field service team with enhanced alignment of the sales and service elements in each branch.

Simply having a new strategy did not yield increased sales productivity and revenue or service level gains desired by the client and anticipated by the strategy consulting firm.

The Solution

The consulting team used representative locations to identify existing technology, sales and service processes and organizaation, and management techniques. The team developed consensus on best practice business processes among the representative locations, created and  implemented new management techniques and reward andrecognition tools, and developed training materials to support standardized processes and terminology and the new business model.

The Results

Across two years following the initiation of the strategic plan implementation, the client reported the following results:

• Initial meetings with prospective new accounts, 36% increase;
• Total sales meetings held, 45% increase;
• New client proposal presentations, 30+% increase;
• Annualized labor productivity (measured in initial four offices only), $2.1 million;
• Combined average activity (sales and service), 45% increase;
• National sales channel productivity, 45% increase;
• National sales channel per-representative sales, 32% increase valued at $1,500,000 in added sales per month.

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