Cyreenik Says
As the Hostess debacle has so poignantly demonstrated, even rock-solid success can be spoiled. In the Hostess case the brand identity is rock solid, but the management, investors and workers trying to exploit that icon have failed. To explain that failure there's been a lot of public finger pointing between management and various unions. Each says they were giving up too much and various others haven't given up enough. But the reality is this failure has been going on for more than a decade. This is, just to belabor the point, the second bankruptcy.
What we are witnessing here is "encrustment", as I will call it for this piece. Over many years of success the brand and the company acquired so much dead weight that continued success first became difficult, then impossible. The lesson to be learned here is not the specifics of which weight at Hostess was the dead weight, but to identify the process under which it was acquired. And what was it about the acquiring process that also made the dead weight so difficult to lose when harsh reality -- lean times -- called for it.
How does encrusting happen? The most insidious way is that during successful times -- fat times -- people involved with a successful organization say, "We've got a good thing going here. Let's add some emotionally attractive features to the basic mission. We're doing well so we can afford them." These neat features are added, then sadly, taken for granted not long later. They become "givens" of the environment, "Of course we have [X]. Why wouldn't we have [X]?"
This encrusting is a constant threat. Any organization controlling the movement of resources is threatened, right down to the personal level. At the individual level impulse buying is an example of encrusting. When it gets out of hand, the individual, and those around him or her, don't get full value for their efforts. Hostess is an example in the business scale range and on the regional scale we have what I call the "Midwest Disease", which I have written about in in other essays. And at the state and federal level we have entitlements being handed out today that our children and grandkids will have to pay for.
Encrusting is easy to slip into, and because it becomes taken for granted it is difficult and painful to slip out of. We all must be aware and vigilant.
Egypt's recently elected President Mohamed Morsi has given himself dictatorial powers over the legislature and courts. This move to supporting a strongman is a common evolution in revolutions. The justification is to protect the community from enemies and chaos. As is common, Morsi claims he is doing this to protect the revolution.
Nothing new here. The only question now is will he be the "moderate" leader that gets replaced by a "ruthless" one as the chaos continues to grow, or will he be the ruthless one who clamps down, kicks butt, takes names, and brings some modicum of stability to Egypt's society and economy.
If he is the latter, the concern then becomes how "adventurist" he becomes in the process. Will he start talking about secret external enemies who are even now sabotaging the revolution, and then start hostilities designed to foil those secret enemies? Many, many dictators who are "protecting the revolution" have taken this path to distract citizens from domestic problems that won't go away even with a strongman in charge. Taking this path leads to bloody distraction.
So far, no surprises in the course of this revolution. ...But there could be some. In this day and age of smart phones and handheld videos, bloody repression is a lot harder to conceal and justify. This could make bloody distraction also harder to justify. That would be a real good thing. It would be a demonstration that being a prosperous society does make a difference in the course of human events.
One interesting tidbit is that this is big, and amazing, news in the US, but not noteworthy for the rest of the world. As of this writing the UK-based The Economist has no reporting on this. Meanwhile in the US, this 18 Nov 12 WSJ article, Hostess Union Clings to Hope by Rachel Feintzeig and Mike Spector, reports that the bakery union leadership is still in denial that this is end for them. For them, the game of "chicken" with the management is still unfolding.
This is big news in the US because Hostess is such an iconic brand, and food is always such an emotional issue. It is also news because the various managements of Hostess and the unions have been feuding for a decade now. Hostess is... has been... definitely "old school" in its views on what role unions should take in a company.
Mixing food and unions, umm... hard to get more emotion-laden than this in a business setting. I'm surprised no one has suggested nationalizing Hostess. That would kick this can down the road a bit.
...LoL! No sooner than I finish writing this I read on Facebook that there has been a petition to nationalize posted on the White House site.
This 9 Nov 12 WSJ editorial, Craigslist Crime Wave: Politicians want to prosecute people who sell gas to people who need it., describes how deeply the emotions on crisis pricing run in two ways. On one hand you have the people who believe deeply that it is fair to stand in line, and on the other you have people who believe deeply that they should be able to make their own choices about how to allocate their resources, and spend more to get something instead of standing in line.
The election is now past. Choices have been made. We now get to live with those choices and the emotions that linger on.
My feeling is that this election has transformed Obama from channeling Hoover to channeling FDR. Sadly, we are still channeling the 1930's, a time of slow growth and bitter social acrimony in the US and around the world. I had been hoping that we could move on and channel Reagan and the booming 1980's instead. But it appears that's not going to happen.
The media this week has been gloating about the defeat of the plutocrats. Many people I follow on Facebook have been wailing and gnashing their teeth about four more years of Blame Bush and no results. My feeling is that I'm scared by the bitterness on both sides following the election. This is new. Most elections I have experienced are followed up by vigorous efforts at reconciliation and fence mending.
During the last four years both Republicans and Democrats have been disappointing to me.
Thanks to the media we've seen a whole lot about Republicans being wacky on abortion and science issues. This leaves me face palming. Historically I've liked Republicans because they were pro-business which meant they were pro-growth. Nowadays they seem to be a lot more pro-creation and pro-evangelical. That's too wacky for my taste. They are no longer in touch with the harsh reality of what it takes to grow America.
The Democrats haven't figured out that expanding a prescriptionist government is also anti-growth. Supporting solidarity and various kinds of rights does not grow America either. Acts such as Obamacare and Dodd-Frank support Beltway growth handsomely -- Washington's lawyers and lobbyists are a boom industry this decade -- but they are death on making America fertile ground for the next generation of disruptive technologies that will be the backbone of the next boom.
Perhaps it is time for my favorite party to emerge: The Cool Head Party. The one that favors staying in touch with harsh reality, using good analytical thinking to understand issues, and using cost-benefit to make policy choices.
-- The End --