Latest Thinking

The High Price of Uncertainty

Is uncertainty really stymieing growth? The leaders of Fortune 500 companies are sitting on trillions in cash awaiting clear indicators of where the economy is going. The stock market drops precipitously on the slightest hint of a problem. Business leaders of companies, large and small, say that they aren’t hiring because of the uncertainty over future healthcare costs.

Do these concerns reflect good business sense or the lack of will to lead?

I find it interesting that, in the midst of all this uncertainty, Apple is setting astounding new revenue and profit records? Equally fascinating is that the automotive industry is enjoying one of the longest cycles of sales growth and profits in decades. Then there are regular news reports of manufacturing returning to the U.S. What do these results demonstrate?

Consumer spending
First, that consumers spend, in good times and bad. As human beings we’re acquisitive by nature; we’re not happy unless we’re spending money to acquire things. If you doubt that, recall a time when you cut back on your spending for an extended period of time – several months to a year – and remember how good you felt when you resumed spending. This simple fact explains the sales growth the auto industry is experiencing despite all the economic uncertainty.

Apple’s experience
Second, consumers and businesses spend money on the things that are most important to them. The iPhone was introduced in 2007, just ahead of the worst recession in 7 decades, and has consistently led the field in sales and profitability ever since. If consumers were guided by uncertainty, they would have shunned the iPhone as being expensive and unnecessary. But they didn’t did they?

Imagine what would have happened if Apple had decided to postpone the introduction of the iPhone until the economic outlook had improved. The sales and profit growth they would have forgone is staggering. Not to mention the joy consumers experienced using the iPhone.

Return of manufacturing
The return of manufacturing to the U.S. is, in part, a testament to the higher quality available here. Of course, there are other factors as well. Labor costs are rising in China and oil prices are driving up the cost of shipping.

But the desire for quality and the willingness to pay a premium price to get that quality is undeniable. Consumers have demonstrated, time and again, the willingness to return to the higher quality products/services and pay a premium price when the lower priced alternative disappoints.

Uncertainty
What does this mean for business leaders’ claims that they can’t hire more people because of the uncertainty in the marketplace? It’s hogwash!

These ‘leaders’ have chosen not to lead. They’re not exploring their customers changing needs, other than the natural desire for lower prices. They’re definitely not making any attempt to see how their customers’ customers needs are changing so that they can help their customers enjoy greater success. Instead, they’ve adopted the role of victim.

What we need in this country are business owners/CEOs that are willing to lead. People who are so determined, so focused on fulfilling a dream, so committed to finding new ways to serve their customers that nothing will stand in their way.

Anyone who has enjoyed success, at any level, knows that the path is fraught with obstacles that challenge resolve and test the limits of passion. Knowing that these conditions are the norm for success, why in the world would we shy from a little uncertainty?

If you allow today’s uncertainty to drive your decision making, you’re accepting the victim’s role and you will assure that victimology. Conversely, if you believe that you and your organization are creative and can overcome any obstacle, whether of your creation or not, you’ll thrive in even the most challenging times. The choice is yours. Choose wisely.

Time To Take Action

You Have Two Options:

  1. Grow your business.
  2. Make excuses.

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At Summers Hospitality Group our sole purpose is to improve our client’s business. Our award winning blog, How We See It, is where we share our latest insight and perspective gathered from our work in the trenches and provides the basis for innovating through the tough issues both independent and chain operators face as we build sustainable, long-term success. How Can We Help You Build A Better Business?

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