Reshaping Our World
In 30 Seconds or Less ….
Markets continue to rally on the hopes of returning to normal and look past earnings results.
- Irrational Exuberance? As I watch the Dow trading up on news of another drug treatment that had strong results supporting severely ill virus patients and the Administrations release of the 3 Phase Re-opening plan, I’m hear former Federal Reserve Chairman Alan Greenspan’s words of warming “Irrational Exuberance!” Is that fair? Only time will tell. One thing is certain, keeping your head and taking the middle road is required in this market and in life right now.
- Fallen Angels – The new badge of shame! Companies that did not keep enough cash (or liquidity) and are in the hardest hit segments of the economy, are getting punished. They are big names which makes sense why the U.S. Treasury is now including their bonds in the lending facilities. Looking at the losers helps us understand which segments will lead us out of this recession.
- A Call to Re-shore Manufacturing & Supply Chains – As China was hit with a wave of quality complaints from Europe last month, they have added extra quality measures and red tape requirements before shipping medical products to the west. Caught up in the middle of the red tape and the new Shanghai outbreak, millions of PPEs produced by US off-shore manufacturing plants in China. These much needed supplies are now “backup supplies” for Chinese hospitals. (WSJ 4/16) I’d like to say, we’d do the same, but the 3M case has proven we’ll sell our mother’s life for a buck! And it’s not the first time if you look at pre-WWII. As consumers, it’s our responsibility to use our buying power and investment dollars to say “Enough!”
In The Weeds – let’s explore in more detail
Irrational Exuberance? As of yesterday, the markets had regained 20% of the 35% sell off. Small Cap stocks have had their best week EVER in the face of a recession! Clearly, the bounce is driven by the remarkable speed of engagement from the Fed and Lawmakers (11 weeks vs 84 weeks to engage in the Great Recession) and breadth of their engagement. All things for which we should be amazingly thankful! Now the challenging news, if you look at China’s economic numbers as a bell weather of what’s to come, consumer confidence and lack of demand continues to challenge their economic re-opening with the 2nd wave of virus hitting. We should be cautiously optimistic until we have a confirmed vaccine and widely studied treatment plans that allow us to move freely about our worlds. The experts say 18 months.
Fallen Angels – Today, Investor Business Daily reports that 40 U.S. Companies listed on the S&P 500 which depend on consumer discretionary spending are in jeopardy of getting their credit ratings cut down to junk (or below investment grade). They are big names and no real surprises … Marriott, Hyatt, Nordstrom, Sysco, and energy firms like Hess. They would join the 14 U.S. firms already downgraded including Kraft, Ford Motor, Macy’s, Royal Caribbean, Delta and Occidental. These stocks have lost an average of 57.4%. Junk status is considered a “ratings cliff” in financial speak. It makes it almost impossible to get access to cash and if they can, it costs a fortune! That’s why it’s so important that the Fed has opened up the Corporate Bond Purchase Program to support these bonds too. In times like this I hear my grandfather ~ Back to the Basics. Look in your pantry and in the rest of your house. What do you really need? Who makes those products? Who supports their infrastructure (think tech)? And supplies the raw material? Focus your investment dollars there.
Re-Shoring U.S. Manufacturing & Supply Chains – We need to look ourselves in the mirror on this one! No more finger pointing. As consumers, we always want better products at the lowest price point possible. We have pushed U.S. companies to look for cheap labor and inexpensive raw material to meet our voracious consumption appetite. We are as accountable as the executives, board of directors, and management teams in the big manufacturing firms that have offshored U.S. manufacturing. We have allowed our love of consumption to jeopardize our countries safety. Full Stop.
As the pandemic has gripped the world, over 60 countries have introduced export curbs with many more adding to the list daily ensuring they keep critical supplies within their country for their citizens. (CNN Business 3/27) While the president was given the Wartime Production Act, he has chosen to work with CEOs directly rather the invoke his authority which is an admirable approach. We are a free society and everything should not sit on the shoulders of government. Sadly, not all firms put their civic duties ahead of the all mighty dollar as witnessed by 3M’s distributors. Unfortunately, our companies have a long history of choosing the dollar over doing the right thing. Companies like Ford, GM and IBM supported Nazi Germany prior to the outbreak of WWII. They chose to continue to work with the Nazis despite the headlines. (Washington Post 11/30/98) There was more than one reason it was called the Dirty Thirties!
It’s incumbent upon us as consumers and investors to lead the way and make “Doing the Right Thing” a tenant of Corporate America. But how? Easy ~support businesses that choose to do the right thing. Buy from domestic manufacturers who produce medical supplies, hand sanitizers, and keep associates on the payroll. They need to be rewarded and not hammered by investors because they spent cash on supporting their associates. And as this crisis drifts into a bad memory and it will, we need to remember to continue to buy critical supplies like penicillin from U.S. based manufacturers even if it costs more money. We are paying for the privilege of supporting our free society. Nothing speaks louder than your dollar!
As always, what can we do?
Stay healthy and choose wisely where & how you spend your money. Please help those in need within your community, support your local businesses with curb side service, and be your amazing selves!
We are leading our families, communities, and teams calmly through this event! #BeTheCalm #RealLeadership!!!
Please leave comments, topics, and LIKEs on my website! And please forward to those you think would enjoy the article.
Stay Healthy! Susie
2 thoughts on “Reshaping Our World”
Great read! Thanks Susie!
In response to Susie’s comments about Fallen Angels, I thought it might help to share a lightly edited post I made recently to a listserv for consulting/coaching psychologists like myself. It speaks to her valid concerns about companies that do and do not behave in ethical ways. The suggested nuance in thinking might help contribute to a solution.
I’ve found myself reflecting on the nature of organizations, thinking about my own experiences with them, experiences that my coaching clients who work for them have had, as well as my friends and family. I would enjoy hearing your thoughts about what follows.
Think about times that you’ve dealt with a large healthcare organization. Maybe you’ve helped shepherd a loved one through a serious illness. Maybe you were the patient. Did the experience enhance your sense of yourself as a human being? Or did you find yourself lost in a maw of processes, procedures, and awful communication while the people working there did what their organization told them was necessary? Think of times you’ve called customer service numbers for large organizations, meandering around robot led telephone trees seemingly designed to prevent customer service. How come these things happen? What makes organizations, built by actual people, behave in inhuman ways?
My conclusion: We can’t expect organizations to behave humanly. It is not in their nature. We might as well ask a tree, a bicycle, or a chainsaw to behave humanely. It simply isn’t in them. We’ve all seen organizations unthinkingly steamroll people, sometimes employees, sometimes customers, sometimes a community or planet, doing unnecessary damage. I’m reminded (a little) of HAL in 2001 A Space Odyssey. An organization is dedicated to its own survival and success, usually but not always defined in terms of money. The organization itself is not dedicated to the survival and success of the people who work there, nor to its customers, nor to other stakeholders.
And yet, I imagine that you also can think of times when you have dealt with people in organizations in which your experiences were affirming. A doctor or nurse connected with you in a very human way, which is apparently happening a lot in ICUs these days. You’ve probably talked with customer service people who were eager to help you “work the system” to get what you needed. Do these experiences call into question my statement about organizational nature?
People within organizations can behave humanly, and often do. But first, they have to free themselves of organization-think. People and organizations are not synonyms. People may build organizations, but before long, the organization takes on a life of its own. (Here comes HAL again.) Those people who won your heart in the hospital or on the phone have not fully surrendered their humanity, and their judgment to the organization. That’s what frees them to behave the natural human way.
The distinction between organizations and the people who work in them may have important implications for what we do. It seems to me that a big part of our mission may be to help people in organizations not get caught up in inhuman organization-think. We can help people remember their humanity, i.e., to be dedicated to the welfare of the people in the organization and the people the organization serves. In other words, we need to help people not over-identify with their employer, but rather to differentiate themselves, recognizing that they are separate, with interests that overlap but are also different from those of the organization.
To draw your attention to something all of you know, but may fit here, humans have two competing drives: to be an individual and to be part of a group. Perhaps what I’m getting at is that a good bit of our work may involve helping clients navigate this seeming contradiction.
The task is not simple, for several reasons. (a) The people we coach, and others who work for organizations, depend on those organizations for income (i.e., food and shelter). When people accept money and other rewards from an organization, it is all too easy for that organization to become an authority figure. (b) There is reciprocity. That is, organizations and the people attached to them (employees, customers, other stakeholders) owe something to each other. But it’s still important to maintain one’s individual identity to avoid the danger of losing it to the organization. (c) Organizations resist human nature. Humans are messy. Organizations like neatness. (Warren Bennis – Why Leaders Can’t Lead)
Those people who get caught up in organization-think may well get financially wealthy. The organization will reward them, but only in the ways that organizations have at their disposal, such as money and position. It can’t cuddle them at night, nor can it be a friend when one is needed. Humans need to connect with other humans in human ways or they die from the inside out. I suspect that those organizations with a large percentage of people who successfully maintain their separate identity are far more adaptable to changing conditions and, perhaps paradoxically, more likely to thrive.
Dana C. Ackley, Ph.D.
Comments are closed.