Entitlement nation

Do not be looking for a political rant here. This is not about either realities or stereotypes (not mutually exclusive, by the way) in social entitlements. Put aside images of folks living on food stamps or doddering codgers collecting Social Security payments and staying alive thanks to Medicare (that might be us).

But after generations of expanding social entitlements, it should not be surprising that some of the expectations of recipients have spilled over into the mentalities of otherwise productive communities. It's not just a matter of dependence on government programs; it's a matter of expectations that are not, and never were, realistic. But despite their unsustainability, we, as both employees and employers, continue to sink deeper into the entitlement quagmire, like B movie heroes slowly disappearing beneath the swamp's quicksand. Even people that we don't think of as takers—and who certainly don't see themselves in that light—have turned into a class that expects unearned benefits.

The phenomenon is not limited to legions of workers basking in the warm glow of antiquated work rules and contractual annual pay increases. Consider the executive who negotiates like a veteran of Istanbul's Grand Bazaar for a guaranteed bonus at year's end. Bonus? For accomplishing what, exactly? That's no bonus; it is merely slightly deferred compensation.

Problem is that entitlement expectations are a slippery slope all by themselves. They grow, and grow. Then, they morph into "rights" and become amazingly difficult to reverse. The bigger problem is that they sap a company's earnings and rob owners of the capital needed to continue building and growing. And the entitled have no clue of the damage—both long and short term—they are doing. Or of the limitations that their demands have imposed on their future success and well being.

THE SUPPLY CHAIN IMPACT
OK, this is a general problem in business at large. What makes it a big deal in our little universe?

What we do, in the complete and complex world of supply chain management, what we decide to do in dealing with change and challenge, and how well we do whatever the job may be ... all have profound impacts on the success of products, programs, and the very enterprise itself.

At the risk of offending, we submit that the damage that one slightly subpar accounting clerk can do is generally of little consequence when contrasted with the supply chain's ability to wipe out an entire selling season—or put distance between the enterprise and its competitors.

We, more than almost anyone, must get this right.

THE PROGRESSION TO UNDENIED RIGHTS
Some, even many, of today's brutally abused benefits began humanely and innocently enough as ways to achieve reasonable conditions for workers. Think about the linchpins of how work is defined—the 40-hour week, the 8-hour day, and breaks for meals and refreshment.

Some labor unions, having won on simple human basics, began to believe that their mission, and their members' rights, were now tied into negotiating wage increases based on tenure; added (or extended) benefits, such as paid vacations; and work rules to limit management of workforce levels by the enterprise.

Today's expectations include:

• Getting paid based on what one does, rather than on what one accomplishes
• Getting paid based on who they are
• Getting paid more, year after year, irrespective of performance, economic conditions, financial considerations, and future prospects
• Getting promoted based on tenure, time-in-grade, and educational level, rather than on qualifications to lead or manage
• Getting more paid vacation time, based on tenure or title
• Getting paid, promoted, and recognized for showing up every day
• Getting rewarded as usual for failure or subpar outcomes.

Please note that the expectations are universally about "getting" with no reference to "earning" or "achieving" or "accomplishing." They are all about individual gain, irrespective of enterprise success or their contributions to profitability and market position. They ignore the ultimate reality that the enterprise must succeed to be able to afford any reward or recognition.

ARE THERE CURES?
Maybe. They begin with a re-ordering of thinking and of acceptance that the new "rights" and growing expectations are a natural and desirable progression. This will take, perhaps, generations to turn around and a commitment to educate in this direction.

We can begin with simple introductions of the long-term economic facts of life within an organization's four walls. Management and associates alike must learn the basics of what makes up profit and loss, of what contributes to margins, of what drives sales, and of the need to make capital investments—and how what they do affects the key elements of a business's economic success, or failure.

Once those basics are in place, we can move on to the next step of understanding enterprise performance—the key measures of return on assets, return on equity, and asset turnover. In our supply chain world, as we have noted several times, we need to teach how our accomplishments and decisions in customer service and satisfaction, sourcing management, inventory management and control, and cycle time reduction affect gross margins, asset base, net profit, and asset turnover.

TODAY INTO TOMORROW
But all this doesn't make a lot of sense to a workforce if all it does is show them how to make the business stronger. They, in enlightened self-interest, need to be able to participate in growth, profitability, and success if they are truly to remain engaged as integral parts of the organization. We have come a long way from the day of orphans working 16 hours a day in textile mills for a few pence and a daily bowl of gruel.

And we have a long way to go in going back to basics, without going back too far, and building self-perpetuating entrepreneurial, engaged, and empowered employees as engines for business success.

Designing appropriate and sustainable incentive programs, with metrics that make sense and objectives that are realistic, is a job all by itself, but it is also part of the complete solution. And it is a solution that we desperately need to build and roll out. The program, by the way, provides the best hope for linking reward with accomplishment—relevant achievement that aligns with corporate needs and objectives.

The path we are on may not lead to Greece, but we are fortunate to be seeing previews of coming attractions throughout Europe.