Listen to customers, not talking heads
The 2010 mid-term elections are over, and the big story was the economy. Even though "It's the economy, stupid," is a relatively new political slogan, that electoral emotion is as old as our republic.
Clearly, the economy is still challenging for too many Americans, including small businesses. Indeed, we have an array of lingering problems yet to be resolved, including a toxic combination of stubborn cyclical and devastating structural unemployment.
Still, we must be reminded that we've been in the recovery quadrant of the current cycle for a year and a half. Consequently, this passage of time dictates that every small business conduct a gut-check to make sure any lack of performance isn't a result of the bad habit of using "It's the economy" as an excuse. And an excellent way to minimize this habit is to become a better consumer of information.
One of the paradoxical elements of contemporary life is the 24/7 news cycle. It's paradoxical because, while the format keeps us well informed, it simultaneously sustains a cottage industry of talking heads, the core products of which are the "Breaking News" syndrome and a phenomenon called "availability cascade."
The simple definition of availability cascade is when we hear so much "Breaking News" about an issue that we begin to accept it as fact and take action based on that belief. Let me remind you of an old story that demonstrates how information can become dangerously disconnected from reality.
A baker saw this headline on a newspaper: "Economy headed for depression." Reacting to this information, he cut his flour order in half with the local miller. The miller was then compelled to reduce his wheat order from the nearby farmers. The farmers then cancelled their new equipment orders with the local manufacturer, who promptly laid off hundreds of employees. These employees were now unable to afford to eat at the restaurants that purchased the baker's bread, causing orders for bread to crumble.
As our baker, now out of business, locked his shop for the last time, he happened to notice the paper where he had previously seen the gloomy headline. Looking closer, this time at the date, he realized, too late, that the negative headline was on a newspaper that was 70 years old.
Availability cascade is made manifest when we, as consumers and business owners, make buying and operating decisions based on hype we hear, rather than facts in front of us.
Write this on a rock... Listen to customers more and talking heads less.
Jim Blasingame is creator and host of the Small Business Advocate Show.
Copyright 2010, author retains ownership. All Rights Reserved.
