What can you learn from this election that will make your own business better?
I think it’s the need for compromise.
We’re always getting into fights with employees, suppliers, customers, and creditors. No doubt, we’re absolutely right in all cases, and the other person is absolutely wrong. But usually the only way to get business done is to compromise. Until you stop yelling and start listening, you’re doing nothing but losing money.
A lot of compromise is going to be needed in this business over the next few months. The Nasdaq roller coaster isn’t indicative of just a bear market. It’s a sign of things to come.
I felt that keenly last week at the ISPCON Fall 2000 conference. Everywhere I looked, it seemed, people were wearing black shirts. People were wearing them in the Sun booth, in the Genuity booth, and in dozens of other booths. (I was in on the gag, too, wearing my black suit most days.)
I developed a little riff on all this. When a few people are wearing black, it’s a sign of power. When a lot of people are doing it, then it’s a trend. But when everyone is wearing black, it’s a funeral.
I got a lot of laughs with that. But I also saw some real fear, especially in the faces I saw at the airport when I was coming home. People were looking at the financial page with the haunted look of republicans observing Florida recounts. The news for republicans may be much better when they read this, but chances are the Nasdaq will still be looking poorly.
The fact is that this economy wasn’t designed to run on $35-per-barrel oil. GOP vice presidential candidate Dick Cheney was right to complain when he was at Halliburton that $10 per barrel was unsustainable. But who is going to risk billions on new production when that might send prices tumbling again?
Free markets are great, but what we’ve found (so far) is that transparent web pricing has mainly moved risk from buyers to sellers, who are responding by refusing to reinvest. That means prices will eventually come back up, hard and fast, like a Brett Hull slap shot. (It’s hockey season, folks, and time to update our analogies.)
These are big, serious questions, the kinds that cause excesses and shortages. Excesses and shortages are the ingredients recessions are made of.
Buyers and sellers on the oil market must find new ways to share risks, and that realization is going to dawn on every other industrial market over the next few months. As it does, the virtuous circle will remain a vicious circle. The only way out is to compromise, to share risks.
Maybe buyers have to guarantee sellers a decent price tomorrow to get production today. Maybe Al Gore and George W. Bush have to guarantee one another real bipartisanship before either has a chance of being a successful president. (Maybe a Gore-Cheney arrangement? A Bush-Lieberman one?)
Web technology has placed supply and demand on a knife-edge, creating uncertainty and causing markets to slump. Compromises backed by money will be necessary to set things right. That’s true in the market, it’s true in politics, but more important, it’s true for your business.