Americans do not engage in a discussion about the essence of a decision to be made. If a discussion does takes place about the decision in and of itself, however, it is strictly for the purpose of defining who and/or what is to be served by making a good decision.
Americans invest less time on identifying how a particular decision fits into the broader picture. Their approach to all decisions is primarily motived by pragmatism. Decisions lead to actions, which in turn lead to further decisions to be made. Americans avoid getting weighted down in what they view as over-analysis. Forward movement is of priority.
Alexis de Tocqueville (1805-1859) – French political thinker and historian best known for his Democracy in America – wrote: “The country appears to stretch on forever and is of limitless resources. But, no matter how fast it grows, it will remain surrounded by resources it cannot possibly exhaust.”
Energy: The United States has more coal reserves than any other country in the world and represent one-quarter of the world’s total coal supply. The U.S. has 272 billion tons of coal reserves and uses about 1.1 billion tons of coal per year. At this rate, America’s 272 billion tons of coal reserves would last nearly 250 years.
According to the 2012 article “American Oil Growing Most Since First Well Signals Independence“ by Asjylyn Loder on bloomberg.com domestic output of oil grew by a record 766,000 barrels a day to the highest level in 15 years, government data shows, putting the nation on pace to surpass Saudi Arabia as the world’s largest producer by 2020.
Net petroleum imports have fallen by more than 38 percent since the 2005 peak, and now account for 41 percent of demand, down from 60 percent seven years ago, moving the United States closer to energy independence than it has been for decades.
Key natural resources: One-third of U.S. land is covered by forests (302 million hectares), making forestland the number one type of land use in the United States. One-fifth of U.S. land is timberland (204 million hectares), which is land capable of producing 1.38 cubic meters per hectare of industrial wood annually. 71 percent of all timberland in the U.S. is privately owned, while 29 percent is publicly owned.
Land: The United States has a land area of 3.8 million miles² (9.8 million km²) compared to 9.7 million km² in China, 0.36 million km² in Germany and 0.38 million km² in Japan.
Population density: United States population density per square mile is 84, compared to 365 for China, 609 for Germany, and 836 for Japan.
As a nation-state, in their international relations, Americans warn against becoming involved in complexity. Thomas Paine (1737-1809) – an English-American political theorist-activist, author, and revolutionary – instilled non-interventionist ideas into the politics of the American colonies.
His work Common Sense (1776) argued in favor of avoiding alliances with foreign powers and influenced the Second Continental Congress to avoid forming an alliance with France.
George Washington’s farewell address restated Paine’s maxim: “The great rule of conduct for us, in regard to foreign nations, is in extending our commercial relations, to have with them as little political connection as possible. Europe has a set of primary interests, which to us have none, or a very remote relation.
Hence she must be engaged in frequent controversies the causes of which are essentially foreign to our concerns. Hence, therefore, it must be unwise in us to implicate ourselves, by artificial ties, in the ordinary vicissitudes of her politics, or the ordinary combinations and collisions of her friendships or enmities.“
Thomas Jefferson extended Paine’s ideas in his inaugural address on March 4, 1801: “peace, commerce, and honest friendship with all nations, entangling alliances with none.”
In 1823, President James Monroe articulated what would become the Monroe Doctrine: “In the wars of the European powers, in matters relating to themselves, we have never taken part, nor does it comport with our policy, so to do. It is only when our rights are invaded, or seriously menaced that we resent injuries, or make preparations for our defense.“
The appreciation that Germans have for individual competence and their aversion towards incalculable risks sometimes set the condition of a certain degree of caution used when working with innovations.
Therefore, it fits the bill that German companies always approach the execution of updates and improvements in a cautious and well thought-out manner. All of the pros and cons must be carefully weighed, and all influential factors taken into consideration before a critical decision is made.
In this case, a qualified expert will often be called in to assist. “Professional quality management is often the condition for the commissioning of tasks. This is often bound together with unnecessary effort, especially in the case of small businesses; often the incorporation of external consultants is better”, explained an expert from the Chamber of Crafts in an article.
And so there exist a plethora of external experts, consultants, institutions, and established norms for German business owners to turn to in case they should lose perspective in the tangle of modern innovation.
These exist to help to make well-founded and analytically grounded decisions. It has even developed into its own field of study at many technical and business colleges: studies to the systematic approach of solving problems and to the development of complete solutions have begun to fill textbooks and lesson plans.
These approaches help to calculate multiple types of risk in advance, thereby countering the deeply rooted nervousness that comes together with risks and unforeseen situations.
Scottish-American Andrew Carnegie led the expansion of the American steel industry in the late 19th century with the Carnegie Steel Company. Carnegie established public libraries throughout the United States, the United Kingdom, and other English-speaking counties.
He funded approximately 3,000 libraries in 47 states in the United States, Canada, the United Kingdom, Ireland, Australia, New Zealand, the West Indies and Fiji. He donated 50,000 British pounds to help establish the University of Birmingham in 1899.
British- and Irish-American Henry Ford founded the Ford Motor Company and was sponsor of the development of the assembly line technique of mass production. His development of the assembly line allowed many middle class Americans to afford and buy automobiles. Ford left most of his wealth to the Ford Foundation.
William “Bill” Gates is the former chief executive and current chairman of Microsoft, the world’s largest personal-computer software company. He co-founded Microsoft with colleague, Paul Allen. He is one of the best-known entrepreneurs of the personal computer revolution. After studying the work of Andrew Carnegie and John D. Rockefeller, Gates sold some of his Microsoft stock in 1994 to create the William H. Gates Foundation.
In 2000, Gates and his wife combined three family foundations and founded the Bill & Melinda Gates Foundation, which is currently the largest transparently operated charitable foundation in the world.
The American culture admires risk-takers. They are considered to be courageous, ingenious, hard-working, forward thinking. The American experience is one of trial and error. It begins with how parents raise their children to try things, to attempt more than before, to experiment. A mistake is only one when one doesn‘t learn from it. Trial and error is moving forward, is getting better at something. It is synonymous with learning by doing.
All Americans are descendants of immigrants. And the immigrant experience begins with risk-taking. All immigrants risk, to one degree or another, what they own and know. Taking that one great risk, that leap of faith, makes small most later decisions in life. Immigrants are, or have become, by their very nature risk-takers. Americans are risk-takers.
The American economic system encourages entrepreneurship. It pays in the U.S. to establish your own business. Businesses owners who enjoy high success do very well financially. Owners who enjoy medium success do well financially. Those, however, who enjoy low success do very poorly financially. “No risk, no reward.”
Small businesses – firms with fewer than 500 employees – drive the American economy by providing jobs for over half of the nation’s private sector workforce. Small businesses are job creators, representing 99.7% of all firms. They make up the following: 64% of net new private-sector jobs, 49.2% of private-sector employment, 46% of private-sector output, 43% of high-tech employment, 98% of firms exporting goods and 33% of exporting value.
Small businesses create more than half of the private non-farm gross domestic product and create 60-80% of net new jobs. 19.6 million Americans work for companies employing fewer than 20 workers, 18.4 million work for firms employing between 20 and 99 workers, and 14.6 million work for firms with 100 to 499 workers. 47.7 million Americans work for firms with 500 or more employees.
According to the Bureau of Labor Statistics small firms accounted for 64% of the net new jobs created or 11.8 million of the 18.5 million net new jobs between 1993 and 2011. Since the latest recession, from mid-2009 to 2011, small firms, led by the larger ones in the category (20-499) employees, accounted for 67% of the net new jobs.
Americans are skeptical of business processes that attempt to replace human judgment. They believe that decision-making is inherently human. Drawing on personal and professional experience, intuition and judgment, a person or a group of persons makes the decision. Processes have neither experience, nor intuition nor judgment.
Analysis defines the situation, the options, their respective risks and benefits. Experience informs about how the situation could/should be dealt with. And intuition influences the decision.
Decision: A conclusion or resolution reached after consideration; the action or process of deciding something or of resolving a question; a formal judgment; the ability or tendency to make decisions quickly; decisiveness. From Latin decidere “determine”.
Analysis: Detailed examination of the elements or structure of something, typically as a basis for discussion or interpretation; the process of separating something into its constituent elements; the identification and measurement of the chemical constituents of a substance or specimen.
The Pareto principle: Also known as the 80-20 rule, stating that in many situations approximately 80% of the effects come from 20% of the causes.
Vilfredo Pareto, an Italian economist, documented in the early 1900s that 80% of the land in Italy was owned by 20% of the population. Pareto went on to observe that 20% of the pea pods in his garden contained 80% of the peas. It has become a common rule of thumb in business that 80% of sales come from 20% of clients.
The 80-20 rule could be a metaphor about the American approach to many things, or at least about an element or aspect of the Americans approach. Americans tend not to be perfectionists. Not because they do not recognize and honor striving for the best. But because in many cases attaining, reaching, accomplishing that extra 5% is in many cases “simply not worth it”.
Worth. Value. Does the customer want that extra degree of engineering excellence? Is it necessary to calculate that many digits behind the decimal point? Is that depth of analysis necessary in order to make a decision?
80% is often enough. For Americans, depending on the situation, 60% is enough. Depending on the risk-benefit relationship, even less is enough.
Daniel Kahneman is an Israeli-American psychologist notable for his work on the psychology of judgment and decision-making, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences.
His empirical findings challenge the assumption of human rationality prevailing in modern economic theory. In the same year, his book Thinking, Fast and Slow, which summarizes much of his research, was published and became a best seller.
„True intuitive expertise is learned from prolonged experience with good feedback on mistakes.“
„We think, each of us, that we’re much more rational than we are. And we think that we make our decisions because we have good reasons to make them. Even when it’s the other way around. We believe in the reasons, because we’ve already made the decision.“
„There’s a lot of randomness in the decisions that people make.“
„Nobody would say, ‘I’m voting for this guy because he’s got the stronger chin,’ but that, in fact, is partly what happens.“
„It is the consistency of the information that matters for a good story, not its completeness. Indeed, you will often find that knowing little makes it easier to fit everything you know into a coherent pattern.“
„We’re blind to our blindness. We have very little idea of how little we know. We’re not designed to know how little we know.“
„We are very influenced by completely automatic things that we have no control over, and we don’t know we’re doing it.“