Monday, September 13

Remaining Competitive: Lessons From The U.S.

WEF Global Competitiveness ReportFor the first time in history, the United States fell two positions as a competitive nation, dropping from second to fourth place. This is according to the World Economic Forum's (WEF) competitiveness survey, which analyzes each country's ability to remain competitive in global business.

While the meaning may have political ramifications, I thought it might be more worthwhile to apply some of the broader lessons to organizational and individual success. Among the top ten problematic factors for doing business in the United States, access to financing (regulatory caused), inefficient government bureaucracy, tax rates and regulations, inflation, workforce education, and work ethic round out the top of the list. How do these apply to business?

Five Lessons To Remain Competitive.

1. Avoid Debt. While many small business owners and individuals sometimes take on debt to rapidly improve the scope and size of their financial position, the wrong reason to go into debt is an attempt to maintain operational levels or lifestyle. Not only will access to financing eventually run out, but the interest rates on that financing can overburden long-term goals.

The best bet for businesses attempting to remain competitive (and individuals) is to accept such risks only when there is a clear outcome. For example, when founding Copywrite, Ink. almost 20 years ago, I used credit to purchase my first computer, a monochrome Mac Classic. Increased productivity (over typed assignments) quickly paid for improvements. Avoid any financing that does not produce a higher yield.

2. Remove Restrictions. Too many policies and regulations can thwart proactive thinking. In business, almost every organization that has an excess of regulatory procedures tends to struggle (consider the airline industry). When employees are not allowed to think creatively or make judgement calls, they become demoralized and stifled. Likewise, it always pays to eliminate bureaucracy, which tends to create regulations without relaxing them.

For individuals, the same is true. Overcommitting on favors, plans, and other personal commitments can eventually erode spontaneous free time, which the mind needs to recharge. Learn to say no once in awhile and don't assume working harder or longer hours will increase your productivity. Often, it will not. It also pays to never assume you can't do something.

3. Focus On Innovation. There is an old saying in politics that if you're defending, then you are losing. There is some truth to that. Businesses that invest more into fending off competition as opposed to innovating will eventually collapse.

Likewise, only individuals who subscribe to complacency ever need to "worry" about younger workers rushing to take their places. It's not their youth that gives them an edge; it's their tenacious passion in lieu of time-in entitlement. If you are not willing to think out of the box, you can bet someone else will.

4. Emphasize Education. Persuasion might be valued in the workplace today, but information will win in the long run. Social media pros often advise businesses to listen, and on this point they are right. The person who knows the consumer better will win.

For individuals, not only will the most successful professionals continually learn inside their fields, but outside their fields as well. I've met and worked for dozens of companies that were not the most competitive firms in communication and marketing, but could be easily considered the best in specialized fields (e.g., medical, finance, emergency response, etc.). Never stop learning.

5. Set Your Own Path. Yesterday, I mentioned that there is no singular path through the forest to success. More correctly, there is a forest to success but most successful companies and individuals cut new paths to reach the other side.

In classes, I sometimes joke that Robert Frost was wrong. It is not the path less traveled, but carving out new paths that will make all the difference. It's how this country was founded. It's how most companies excel. And it's why there are so many different stories for individual success. It's not about implementing what everyone else is doing; it's about finding a better way.

Lessons From WEF And Back Again.

Just as individuals and organizations might learn something from how the WEF ranks countries, our government might learn something from those individual and business tips above. If the government wants to play a role in strengthening the economy, it would be prudent to stop overspending, remove restrictions (taxes and regulations), focus on immediate innovation, invest in education, and stop attempting to duplicate what Europe does.

On that last point, I have nothing against European ideas. On the contrary, they have great ideas for Europe. But transplanting those ideas have profound consequences here. Case in point: building a super department store in an urban setting is a good idea, but when that same store is built in a rural community, it kills the economy. One size does not fit all.

You can find the two-page report on the United States here. In addition to citing those problem areas, the survey ranks 15 indicators with subcategories. Some subcategories are surprising, including that we ranked 40th among property rights, 120th in national debt, and 89th in total tax rates.
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