When I worked in textiles back in the 80s all the mechanics had a secret stash of parts for the machines they were responsible for. When the Just in Time (JIT) inventory process was implemented, all the mechanics had to clean out their toolbox parts stashes and returned to the main inventory control. Unfortunately, the main inventory was never just in time; in fact, it was rarely in control, and standing equipment was cannibalized for parts.
Because of this scarcity, when inventory arrived mechanics began stashing it again. The result of this mentality was cannibalized equipment that needed almost completely rebuilt to get back in production and inventory was always cleaned out by mechanics and shift supervisors wanting to control their own unofficial inventories.
Whenever there is a shortage of resources, a hoarding mentality takes over. Admin people stash pens, thumb drives and note pads. Mechanics stash parts to keep "their" machines running. Executives hoard bonuses. Banks hoard money to refill their reserves before they want to start lending again. The tale is always the same in the hoarding game.
How do you stop the hoarding?
You stop the hording mentality by stopping the scarcity mentality. When executives' first reaction to recessionary times is to cut staff, expenses, and inventory holdings, everyone gets the impression of scarcity and then adopt an "every man for himself" approach to survival. The negativity runs like a wind-fueled fire through a forest, taking no prisoners and causing tremendous damage.
1. Executives need to find different approaches to dealing with financial instability. Instead of shutting off expenses, they should actually be spending more in the areas of research and cutting-edge marketing approaches.
2. Business leaders not to roll up their sleeves and look for better ways and improved methods to produce instead of having a bean counter under the green eyeshade arbitrarily slashing across-the-board expenses.
3. Give employees something to believe in. If all the executives are demonstrating their impersonation of Chicken Little they will create panic throughout the organization. Panic breeds a mentality of "Me first." "Me First" breeds hoarding. Hoarding breeds even more scarcity that fuels even more panic. Executives need to avoid the spin control whitewashing of bad news with a solid, accurate positive belief and plan in how to face the obstacles brought on by this economy. Pure and simple: Actually be a leader, not just a person in a position of authority.
One of the lasting legacies of this extended recession will be the distrust people have of optimistic trend projections. Although most everyone will welcome positive news, in the back of people's minds who have experienced scarcity, there is always a doubt that will be fed by some level of hoarding. We must handle financial obstacles in businesses with a direct approach that examines all sides. The impact of our decisions are wide ranging and longer-term then is usually considered.
In fact, in tomorrow's blog I will address that very issue.
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