So Much From So Little

One of the concepts I enjoyed exploring over my lifetime and still do, for that matter, is finding ways to do a lot with a little. The idea might be to do a lot of whatever you may be doing in the least amount of space. Or, it might be creating a lot of output from the least amount of production equipment and facilities. It might be how to operate a very efficient, profitable business with the least number of people. And, of course, the ultimate would be to operate a very efficient, high output, profitable business in the smallest amount of space, with the least amount of equipment and facilities and the least number of people.

Apparently, that's what the United States and some of the other industrialized nations around the world are discovering . . . you can do a lot with a little. Well, I guess that applies to private, profit making businesses because it behooves them to be as cost effective and efficient as possible to realize the greatest return on investment as possible. Some, perhaps many, non-profit organizations don't necessarily operate on these principles. In some cases, of course, they don't have the resources to occupy too much space, employ too many people and operate with a maximum amount of internal bureaucracy as possible to accomplish their mission. They have no choice, but to be as cost effective and efficient as possible. But, the organizations that do have the resources will seldom operate as efficiently and cost effectively as they could.

The government, most governments at any level, operates on the principle of too much "fat" because they can and because it's not their money. The money isn't earned nor do they produce anything to generate revenue. They simply find as many ways as possible to remove as much money from their constituents' pockets as they possibly can and then they'll squeeze a little more. Unfortunately, most of the public will complain a bit, some may even be a bit more verbal, but the old "you can't fight city hall" syndrome seems to apply in virtually all situations involving government. Then apathy quickly sets in and the system goes on as it always has.

The Phenomenon Created By Crisis

Currently we are witnessing a very interesting phenomenon. Due to the actions of the government and a number of greedy (for want of a better word), financial types and the corruption and lack of ethics and scruples of a relatively small number of people, businesses have pulled back. When they did so, it required them to cut operating costs and the fastest and most efficient way to cut the fat in operating costs is to layoff workers. Once the workers are out of work and no longer receiving income, the workers stop purchasing. This, of course, means that the businesses cut back their output since there isn't enough demand. But, here's the really interesting thing. The businesses still have to operate to stay in business. So, they begin making adjustments that they could have and, probably, should have made years before.

Here is the result of this phenomenon. Businesses are now able to operate more cost effectively, more efficiently and more profitably in less space, with less, but more efficient equipment and facilities and less workers to turn out more and better products (or services) then they could before the financial crisis that began around 2007. So, instead of having an unemployment rate in the 4 or 5% range, it's running in the 8% range, nearly double the figure that's considered "normal." Meanwhile all the "Talking Heads" in the government and media continue to cajole the business sector to hire all these out of work employees. But, why should the businesses do this? They are putting out more product, making record profits, sitting on more cash then ever before and the stock market is now at the highest level it's ever been according to the Dow Jones Indices. And, one additional consequence of this is that the businesses can adjust their output to follow market demands much faster and with little disruption then ever before.

One example of this is a paper mill not far from my base camp in West Virginia. The mill is on the other side of the Potomac River in Maryland. Twenty-five or thirty years ago this paper mill employed approximately 2,200 to 2,400 people. It operated five lines of paper calendaring, cutting and trimming equipment. Today, that same paper mill employs approximately 800 people, operates two lines of equipment and produces at least twice as much output as it did 25 or 30 years ago. Are they going to hire more people? Absolutely not! Actually, they just downsized their workforce again eliminating another 40 to 50 people and their output is still where it was before the layoff.

Two Sides Of The Commentary

The sad part of this commentary is that it's going to be very difficult to reduce that unemployment rate. Eight percent may be the new normal.  And, of course this is really not an accurate statistic when you add in the people who have been dropped from the unemployment statistics. It's not that they're now employed. They simply gave up looking for non-existent jobs. If you also consider those who are under-employed and are working one or more menial part-time jobs to attempt to earn enough to get by on, the statistic changes dramatically. You are looking at a figure that is in the 18% to 22% range according to recent estimates by economists. Actually, in some areas, the new, young, starter job, prospective workers have unemployment rates of 25% to 35% and possibly more.

The positive part of this commentary is that investors are realizing a consistent growth in their portfolios, 401k's and IRA's. Unfortunately, most of the folks who are part of the unemployment statistics don't have any money to invest.

The "Why" Of This So Much For So Little Phenomenon

This phenomenon is the result of the converging of several factors. It's really not rocket science, either. The two main factors are the financial crisis that forced the business sector to regroup and refine or reinvent their operating models and the continual improvement in technology in every facet of business.

It's simple; less people are required to produce more output. Once upon a time the phone companies employed very large numbers of telephone operators. Today there are only a few. Large companies had large secretarial pools. Today they are called administrative assistants and there are very few. Manufacturing plants (like the paper mill I cited) had large numbers of workers operating all kinds of machines and doing all kinds of processes. Today, computers and robots have replaced the masses of these workers. And so will the future continue down this path.

My Motivation For This Post

So, what brought this thought to mind? Actually, a few things were the motivation for this post. One is the current state of the stock market. Another is the constant droning from the federal government "Talking Heads" including the "Talking Head In-Chief" about creating jobs. It's almost reached the point of being laughable if it wasn't so sad. You can read the newspapers (whatever those were) or listen to the mass media and get all the rhetoric on this subject. And a third thing that stimulated me was an email I sent to someone who was inquiring about certain aspects of my "living free" lifestyle. And to be more specific, the discussion got around to "smart phones." This intelligent woman, in my age range, said that she just couldn't get her mind wrapped around the idea of getting a smart phone.

I accepted that thought as a challenge. So, I decided to make a list of the functions this one small, lightweight, inexpensive (especially in light of all that it does for me) piece of technology does for me. I'm sure there are many who are using it for much more than I am, but here is the list of how one small piece of pocket-sized technology has made my life better, more efficient, cost effective and productive.

My smart phone is my:

-personal phone

-business phone (with the addition of a Free Google Voice phone number)

-pocket camera - darn good quality - actually more resolution than my 

     current standalone SLR

-pocket video camcorder - pretty amazing and a thousand times better than 

     the first video camera I bought in 1977 that cost me about $1,600

-weather forecaster - instantly and up-to-date including Doppler radar and 

     15 day forecasts for planning

-pocket calculator

-calendar

-appointment book

-Little Black Book (contacts, names, addresses, phone number and email 

     addresses - home and office)

-flashlight

-library (with my free Kindle reader and the other free ebook reader 

     app installed)

-Solitaire and Words With Friends games - for when I'm bored or 

     waiting for something

-Web browser when I need instant information

-email reader and sender - though I prefer my computer, I still do about 

     50% of my work on the phone

-wireless Internet modem and router (up to 5 devices can connect at 

     the same time)

-GPS including maps and voice directions

-Google maps to chart a course, check mileage or calculate travel time

-alarm clock

-timer (and egg timer) that I use frequently

-stopwatch - when I'm walking or checking the timing on a piece I'm recording

-To Do (tasks) list

-credit card processing terminal with my Square-up account and card scanner

-Dwolla account (another way to send/receive money without using a credit card

-USAA account monitor - I can do all my USAA banking/monitor my IRA 

     & my car insurance

-USBank app allowing me to monitor my business account & deposit checks 

     electronically

-photo gallery of any photos I want to load on and have to show others

-video player for videos I want to load & watch - including connecting to an 

     HD, flat screen TV 

-music player with music I load onto it (my personal iPod)

-Netflix movie player

-Skype phone I use to talk to people all over the U.S. and the world

-text messaging device

-Facebook page monitoring

-Google + monitoring

-Twitter monitoring

-LinkedIn monitoring

-Couchsurfing.org app travel network

-fm radio and podcast device

-news feeds

Holy cow! That's over three dozen uses from this one device that cost me $5.00 on a special promotion at Costco. It has replaced many devices and hundreds and probably well over a thousand dollars of additional expense to buy, maintain and store all this stuff somewhere. And, here's the best part, I have all of it with me all of the time. I don't have to go searching for where I last stored it. Or worse, yet, need something when I'm not "home" and don't have whatever it is to utilize when I need it.

This is the future for all of us. It's this kind of technology and thinking that has so dramatically changed our work/business culture and created this environment of efficiency, cost effectiveness and productivity. If we want to keep up with the world and if we want to live free, we must adapt to and adopt the changes that are going to happen with or without us. My smart phone has created a massive amount of freedom for me. If you're not currently into smart phone technology for yourself, I strongly recommend you do a little research, shop around and make the commitment. It will make your life better. I might go as far as to say it could very well be life changing.