history – Page 14 – understand-culture

Immigrant experience

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.

American Entrepreneurs

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.

Frederick August the Procrastinator

Frederick August, the King of Saxony, was one of history’s great procrastinators. While he began as one of Napoleon’s greatest foes, he soon became his greatest ally. In return, Napoleon elevated him from prince elector to king.

But by 1813, his alliance with Napoleon would cause him to lose the Battle of Leipzig. Though Frederick August was careful in attempting to side himself with the great forces who opposed him, a treaty that he had made with Austria eventually dissolved. Taken into captivity by the Prussians, Frederick August was forced to turn more than half of his territory over to his archrivals.

But why was Frederick August on the losing side of the Battle of Leipzig? Historians consider him to have been incapable of making decisions. He is credited with coining the phrase “no decision is better than a bad decision.”

During the revolt he spent his time sitting almost apathetically in the basement in the city hall of Leipzig. To add to the confusion, Frederick August was an exceptionally unpredictable monarch; very few rulers changed their mind so often.

Not only was he incapable of making decisions, but as soon as a decision was made it essentially would have lost all meaning in the moment of its creation, having already been undermined in significance and seriousness by the probability that Frederick August would again change direction.

Limitless Resources

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.

Entangling Alliances

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.“

Short. Mid. Long.

Germans think mid- to long-term. Short-term thinking and action is almost always viewed negatively. Germans associate short-term with ungrounded, fleeting, incomplete. When they make decisions they want to know, at least anticipate, what the effect (Auswirkungen) will be in other areas, on other processes, on other colleagues. They strive to understand the mid to long term effects.

Middle High German vrist. Old High German frist: what is current, about to occur; time period in which something should happen; to postpone briefly. Kurz- , mittel- , langfristig means short- , mid- , long-term.

build a better mousetrap

“Build a better mousetrap, and the world will beat a path to your door” is attributed to the American writer Ralph Waldo Emerson from the late 19th century.

It may, however, be a misquotation of “If a man has good corn or wood, or boards, or pigs, to sell, or can make better chairs or knives, crucibles or church organs, than anybody else, you will find a broad, hard-beaten road to his house, though it be in the woods“.

The phrase “to build a better mousetrap”, has come to signify a false belief that companies need only build a better product for them to succeed, as if the sales and marketing of that product played an insignificant role. Americans rarely believe that a product can sell itself.

Buyer‘s Market

The United States has been growing since its birth. Growing in territory, in population, in economic output. For the most part the U.S. has striven for open markets, domestically and internationally. Americans also believe in meritocracy. People should benefit directly from their hard work.

Americans believe in competition. And America has always been a buyer‘s market, with supply outpacing demand. In such an environment, success cannot be attained without active effort to win customers. In America, sales and marketing are critical to success. Simply „building the better mousetrap“ is not enough.

An Amazon.com search on “Buyer’s Market” generates 13,959 results. Book titles include Solution Selling: Creating Buyers in Difficult Selling Markets by Michael T. Bosworth, The New Rules of Marketing and PR: How to Use Social Media, Online Video, Mobile Applications, Blogs, News Releases, and Viral Marketing to Reach Buyers Directly by David Meerman Scott and Buyer Beware: Finding Truth in the Marketplace of Ideas by Janet Parshall. 10.5 percent of native-born Americans between the ages 25 and 64 are employed in the sales industry.

Of Ducks and Salespeople

“We’re like ducks. We’re not good at either swimming or flying.” This was the response of a graduate student in Wirtschaftsingenieurwesens – a kind of combination of business and engineering, each of them in the lighter form – when asked what subject material her studies involved.

The duck metaphor reveals a conflict in German companies. Those working in sales & marketing are still looked down upon a bit as people who go from door-to-door selling a product (vacuum cleaners is the cliché) which they have neither developed nor manufactured. Even more, colleagues in sales & marketing often feel unfairly blamed when the company does not perform well.

Prestige in the German economy still goes to those who invent, develop and make physical products. Engineers and artisans are among the most highly respected disciplines.

The results of their work can be seen, held, put to work, and depending on their sophistication even marveled at. Whereas the success of capable sales & marketing people can be seen only in dry, impersonal numbers.

In addition, almost all professionals in sales & marketing transitioned into that discipline from another one, perhaps even from engineering. In fact, Germany doesn’t have a traditional Berufsgruppe – occupation category – for sales. There is no guild going back to the Middle Ages as there are for almost all other technical occupations. Thus the duck-metaphor. Neither fish nor fowl.

Nonetheless, the importance of the work “ducks” perform continues to increase in today’s global economy, where quality and technical prowess alone are not enough to sell a product.

Strategy Consultants

The approaches used by strategy consultants – also known as management consultants – are advanced versions of those taught in business schools: data-driven analysis with some degree of attention given to the non-quantifiable human factor. The goal is the standardization of best practices within client companies, drawing also on insights gained from other clients.

The management consulting sector has grown dramatically since the 1930s, when the Glass-Steagall Banking Act was passed, limiting affiliations between commercial banks and securities firms. Management consulting grew out of the demand for advice on finance, strategy and organization. In 1980, only five consulting companies existed, and each had 1,000 consultants worldwide. By the 1990s, however, more than thirty firms entered the market each with at least 1,000 management consultants.

In 1993, McKinsey had 151 directors. This figure dramatically increased to 400 by 2009. From 1993 to 2004, McKinsey revenues more than doubled with 20 new offices and twice as many employees. McKinsey grew from 2,900 to 7,000 consultants scattered across 82 offices in more than 40 countries. In 1963, Boston Consulting Group had two consultants. By 1970 1980, 1990, 2000 BCG had 100, 249, 676, 2370 and 4800 consultants on its payroll respectively.