Sometimes you have to throw logic out the window.
I have many conversations with people about their businesses. I try to keep things lighthearted and not get too too serious about any subject. Sadly, or fortunately depending on how you look at it, I don’t have any conversations where the outcome will truly affect the world on a global scale – so I figure I’m approaching things in a healthy way. One tongue-in-cheek phrases I find myself saying time and time again when someone says that they don’t understand why their good idea isn’t being adopted or why their ideology is not the way most people think is, “well, you see, you’re thinking logically in an illogical world”. 19 out of 20 times I will at least get a smile out of them, and if I’m lucky, some added perspective to the conversation.
It’s gotten me thinking though, this joke is funny because it’s true. Why is this so? There are all sorts of questions we think about regularly that are too frustrating to warrant the time to really get to properly analyze.
- Why can’t we have a simplified tax code?
- Why isn’t there a national MLS?
- Why don’t teachers run our schools?
- How does someone in the UAW get $25/hour to push a broom?
- Why are banks reporting record earnings when much of the country is at it lowest economic point in a century?
- Why would someone possibly pay $7 for a latte or $9 for a pint of craft beer?
- Why do the Yankees seem to trade away all of their decent pitching prospects in exchange for has-beens?
- Why can’t people let others out of an elevator BEFORE rushing on themselves?
I don’t think anyone will ever be able to answer these last three so I’ll continue to brood on those offline; but, the first five can very much be attributed to politics. Now, everyone knows politics occur in Washington but the fact is, the larger ANY organization gets the more politics are involved. This should be fairly obvious. The Webster dictionary defines politics a few ways but the one I think most apropos is this one:
Political affairs or business; especially : competition between competing interest groups or individuals for power and leadership (as in a government)
I would distill that down to a very simple phrase: People want what they want.
The IRS doesn’t want a simple tax code because there are jobs and money invested in it being more complex. Think of all the auditors that would be unemployed if we all just paid 25% of our gross income to Uncle Sam. NAR doesn’t want a national MLS because MLSs generate revenue for them. More MLSs (over 900 of them I believe) means more memberships, more boards, and more money that goes to NAR. Confusion in our education system means that taxes are more easily justifiable and fear keeps parents in line. Politicians also love the subject when it comes to getting votes based on emotion. Unions don’t give anything back because if they set that precedent they may lose membership and that means less union dues collected. Banks are in the business of making money – literally. Unsuccessful banks serve as food for the successful ones. When citizens are late on their bills (like in a bad economy) banks make out big on interest and late fees which are astronomical when you consider the term of the loan. A bad economy is great for banks.
You’re depressing me, Patrick
I don’t intend to make this a doom and gloom piece or a politically charged rant. Actually, it’s quite the contrary. You practice politics too – every time you post one of those silly memes up on your favorite social network, get involved with a discussion on the rights of any group, or refuse to buy a product because you feel the company does something you don’t like. We all do it. The point I am making here is that it’s human nature and it’s never going to go away. UNDERSTANDING THAT LAST SENTENCE IS THE POINT OF THIS POST. Once you get there you can move forward and make it work for you. Sometimes well, sometimes very well. Logic, regardless of how solid, does not always apply to business partially because there is no free market and partially because we are a flawed species (not always a bad thing).
What does this mean to your business?
Simply put, pay attention and get over it. Understanding those politics can save you a ton of heartache and money. The IRS isn’t going anywhere anytime soon so get yourself a good accountant and make sure you stay within reason when pushing the envelope. IMO owing a small tax bill at the end of the year is better than getting a big refund. NAR is never going to put together a national MLS so understand the big players and their similarities/differences when it comes to interacting with them. If you are a vendor stay away from geographically fragmented markets if what you do is labor intensive and custom. Banks want your money so be smart about borrowing from them – and how you pay it back. Interest and late charges are the most insidious and high margin transactions they do. Clear the credit card balance every month unless you are going to make more money off of that cash than they will off of you for not paying it – this is highly unlikely BTW.
And for God sake, get a 99¢ cup of coffee like the rest of the world! I’m sorry, paying that much is just silly.