Thursday, July 25, 2013

When I Saw a Business Destroy Itself...

The following anecdote relates to an article on titled "How Modern Economics Is Built On 'The World's Dumbest Idea'":

In the summer of 1989, I started working at a new McDonald’s being built.  We trained at a few other stores so that we would be ready for opening day.  It was a great summer and a very exciting time for all who were involved.  We did everything by the book and had plenty of staff on hand to handle the customers.

The owner knew that it was common for a new store to lose $100,000 the first year.  His goal was to be the first to break even or even profit the first year.

So you can possibly guess what happened.  With the focus being on profits, having too many employees in the store during a slow time impacts those profits.

So while we had a great summer, when school started, he immediately reduced staffing by half to meet the new lower demand.  However, he failed to anticipate that this drop was temporary.  After all, it’s during the first week of school when everyone is trying to get back into their old routines.

A couple of weeks into the school year, business was picking up again.  The owner did not increase staffing to match this as he assumed this sudden increase was an anomaly.  Naturally, you have a breakfast, lunch or dinner rush and not enough staff on hand to get the food out fast enough, the customers get disgruntled.  Eventually they stop coming.  This drop is worse than the school year… so staffing is cut again.

Eventually, by Christmas, we were nowhere near the high-performing store we were those first three months.  He had destroyed his own business by seeking short term profit rather than focusing on long-term customer satisfaction.

Thursday, July 4, 2013

Nationally Observed Made Up Holiday

Sure, you probably celebrated "Independence Day" today, but it is not the date of our nation's independence.  Ironically, it is not even the anniversary of the day our Second Continental Congress voted for a resolution of independence (which was July 2, 1776).  It is merely the day in which that same SCC approved the wording of the Declaration of Independence.

It is also not the day in which all members of that assembly signed the document.  Most signed it that day, but the final signature was not on the document until August 2, 1776.

Again, despite all this, the United States was not independent.  We were at war with a nation that we had come to despise.  That nation still held considerable control over our naval ports and many of those cities.  Today is the anniversary of the approval of the document announcing our intent to seek independence from the nation of Great Britain which had been resolved two days before, but would not reach fruition until 1783.

The date of this celebration mostly stems from the date of the document mostly signed on this date.  History has allowed the actual date of the resolution of independence to become obscured by this document's date.

In reality, the true date of independence when Great Britain would acknowledge the United States to be free, sovereign and independent states was on September 3, 1783 when the Treaty of Paris was signed.  Ironically, we do have a holiday near that date, but it has nothing to do with independence.

So we have a day observed once a year that really has little to do with the actual date of independence.  Rather it's like celebrating the conception of a nation versus the actual birth of the nation in which we finally pulled free from the mother country.  We don't celebrate the conception of our children year after year, only when they were born.

Then again, this nation does tend to do as it will, but just wanted you to know your actual history, not the one that people assume because of marketing and merchandising.