Basic Business Fundamentals

When we (in a general collective sense) think of Basic Business Fundamentals (BBF) we think of the various classes that we might have taken for our Business Degree, such as:

• Accounting I & II
• Marketing I & II
• Macro/Micro Economics
• Finance I & II
• Management/Leadership
• Project Management
• Operations Management
• Entrepreneurship
• Business Communications
• HR Management
• Strategic Planning
• Numerous Business Electives

And, within those “hallowed halls” of those “Ivory Towers,” students of business were immune to the brutal realities of the marketplace or the so called “real world,” that for all intents and purposes revolved around an “insane” focus on the “bottom line” or on the “profits” that the companies generate. So much so is this a “driving force,” and that CEO's are measured on their ability to generate profits every 90 days which coincidentally is the same time frame that Wall Street Stocks pay out their dividends.

Some of you might be thinking... well... that's not totally fair... but, fair or not... that is the way it is in the world of business. Decisions are oftentimes made by highly thoughtful and intelligent people that favor the STOCKHOLDERS over the employees and even over the customers. A huge example of this is all the outsourcing that is going on within American Business...

Why do we outsource?

Now this one is incredible simple... because it's CHEAPER... and, when business can reduce their internal costs like reducing the costs of labor, they can increase profits as long as their do not reduce their marketplace price.

Now, if that ain't focus on the bottom line, I don't know what is then...

And, who does that benefit?

Well, I can tell you that it does not benefit the employees who have to be laid off because of outsourcing or all those employees that may have worked there in the future.

And, I would suspect that we all know this basic fundamental...

If you work you buy “shit”

If you don't work, you don't buy “shit”

Non Americans work, therefore non Americans buy “shit”

Here is a fundamental truth about the American Business Marketplace... American labor costs too much... and, as a result, hiring American Workers takes away a company's Competitive Advantage and consequently reduces its ability to compete in the Global Marketplace... which “pisses off “

Stockholders because the amount of their quarterly dividend check is lower.

A few years ago, an Human Resources Manager told me that an employee was hired at a basic salary of $50,000 that the true cost of that employee would be $150,000 once benefits were added into the hiring package; and, that outsourcing could cut that amount in half, maybe more.

That same HR Manager also confided in me that in the HR World, it is common knowledge that American Workers are no longer the best qualified to hire.

Sadly... it is this fundamental fact about business that American do not understand or refuse to understand or refuse to accept because this is America...

Years ago, let's say around 1950, America was the economic center of the world... the hub of any and all economic activity for the entire world... business and economics revolved around America, Americans, and its United States... but, that is no longer the case... and, the more we “piss into the wind” and say that it is not so, the more we refuse to accept the new reality of our situation here in America.

Not too long ago in the South and no doubt in other parts of the United States as well was the Basic Business Model of what I and others refer to as the “Company Store.” In this model, employees and as many of their family members as possible were hired to work at this company making whatever with the idea being if we hire family members too we will increase loyalty. However, the homes in which these families lived were owned by the “Company Store” and it was the “Company Store” to which they paid their rent. And, the grocery store, clothing store, hardware store, etc., were all owned by the “Company Store.” So, all the money that the “Company Store” paid out in wages, the “Company Store” got back when their employees paid for necessary goods and services.

I know this because I lived in what such town in North Carolina in the 1960's... and yes, it was going on then and was not just in our Wild West Towns as depicted on television.

No more than 4 years ago when I started teaching college classes in management for Carson-Newman University, I remember asking several of my business majors what they thought was the purpose of business in America or Worldwide for that matter.

• To provide jobs
• To make a profit
• To sell a product
• To win and not loose

and, the above were the two most prevalent comments that were made and these comments were not made sarcastically as one might first suspect or conclude... but, were made because they had been led to believe in other classes that this was really the way it was.

And, believe it or not, all of my students were somewhat to utterly amazed when I told them that the sole purpose of business was to be able to play the game year after year after year. And, that this had very little to do with providing jobs, making a profit, selling a product, or winning. But, if those 4 items were also included in the process then great... but, they did not have to be.

There is a new paradigm shift on the horizon which has caught me by surprise, even thought I have wanted it to happen for a very long time...

On a recent wintry afternoon, Mark T. Bertolini, the 58-year-old chief executive of Aetna, the health insurer, was sitting in his Hartford office wearing a dark suit and a crisp, white, French-cuffed shirt. But instead of a necktie, he wore a shiny metal amulet engraved with the Sanskrit characters “sohum.”

Roughly translated, sohum means “I am that,” and repeating the phrase is used to help control breathing in meditation. Mr. Bertolini says the word also signifies a divine connection with the universe. (He has a similar design tattooed on his back.)

In case there was any doubt, Mr. Bertolini, who runs one of America’s 100 largest companies by revenue, wants to make it clear he is a different sort of C.E.O.

In recent years, following a near-death experience, Mr. Bertolini set about overhauling his own health regimen, as well reshaping the culture of Aetna with a series of eyebrow-raising moves. He has offered free yoga and meditation classes to Aetna employees; more than 13,000 workers have participated. 

He began selling the same classes to the businesses that contract with Aetna for their health insurance. And in January, after reading “Capital in the Twenty-First Century,” the treatise on inequality by the French economist Thomas Piketty, Mr. Bertolini gave his lowest-paid employees a 33 percent raise.

This new mindset which hopefully will take hold in all American companies with change our BBFs forever... and, all I can say is:

Man, what took ya so long?