Price elasticity and inelasticity

These are some interesting words, but what do they mean? They have several related definitions in economics, but in one context, price elasticity means prices are more readily changed by the seller. Price inelasticity means the opposite, prices are changed less easily.*

In our current inflationary economy, much of it has been fueled by supply shortages due to the pandemic and tariffs, as well as some other factors (gas prices go up every summer because of industry maintenance and increased demand, eg.). But, some people have noted there are a few sellers, retailers, etc. who seemingly have raised prices beyond what is needed.

Using the above terms, price setting by sellers tends to be more upward elastic. Sellers will more easily change the price upward when the market supply drops, more so than the market would dictate. This adds to the inflationary push. Yet, when the market supply catches up, the sellers are slower to adjust prices down, hence the term price inelasticity can be used.

In its worst form, the upward price elasticity is sometimes referred to as gouging. A hurricane knocks out all the power, so stores raise the price of bags of ice and bottled water. Retailers in an inflationary market would be foolish to gouge people, yet there are some who have added to their margins on the backs of customers. On the flip side, there will be those that milk the higher prices as the prices should fall, to get every last drop of extra margin.

People should remember who these retailers are. Some have been so blatant in price increases they find their names in news stories. So, my strong advice is to vote with your feet and shop elsewhere. My wife and I use a term that a seller is “proud of their services and products” when we see consistently higher prices. If they do this, people better be getting some darn good service or much higher in quality goods.

Two final pieces of advice. First, alter your demand. If gas prices are higher, drive less and walk more. Bundle your errands more, as well, to reduce travel costs. Second, if you have not tried generic or store products, now is the time. It is funny, people have grown accustomed to using generic prescription medicine as the brand costs are so high, but are reluctant to do so on store brands of food, trash bags, over the counter medicines, etc.  There is no better time to try the lesser priced products than in an inflationary market.

Shoppers tend to know when prices are too far out of line. The best thing they can do is to tell the store manager he or she is forcing the shopper to look elsewhere. No words will be more chilling to a manager than that. Then follow through.

*Note: I am not an economist, so please do not presume the above is any more than from  someone who had economic classes in college, much of which I have forgotten.

A few sayings to help us through the day

Here a few sayings that I have picked up along the way. Please feel free to offer some of yours that who add some relish to this grouping.

Have you ever felt like the whole world is a tuxedo and you’re just a pair of old brown shoes? (George Goebbels)

I have noticed the more I practice, the luckier I get. (Gary Player)

Opportunity is often missed as it is dressed up as hard work. (Malcolm Gladwell)

I have noticed common sense is not all that common. (Mark Twain)

A man will never be shot while doing the dishes. (Unknown)

More shots are missed because they are never taken. (Unknown)

If you always tell the truth, you don’t have to remember as much. (Unknown)

We tend to spend more practice on what we do well and less on what we don’t. It should be the other way around. (Harvey Penick)

No is just an answer. Don’t be afraid of hearing it. (Unknown)

I took the last shot because I knew I could handle missing it. (Jim Furyk)

You cannot have too many cups of coffee with people. It is my fault should not be a frightening thing to say. (a friend and colleague)

Don’t ever be surprised when an ego-centric person turns on you. It will happen. (Unknown)

People should get more credit for doing the right thing than going along with the crowd. (Unknown)

Paying it forward may be the most selfless of gifts. The gift of your time is the best thing you can do for your kids. (Unknown)

The greatest lights in our community or family are the people who always visit or help when it is needed. (Unknown)

Helping people climb a ladder out of the hole they dug is better than just pulling them up. If they climb it, they may avoid digging a new one. (a friend and social worker)

You have two ears and one mouth, use them in that proportion. (an old boss)

Read the room – make sure your advice is being heard

One of my mentors in consulting taught me and others an approach to addressing problems for clients which he termed the “total approach to consulting.” There are two impactful stories that frame this one – the approach and how he learned it.

First, what is the approach. Address each problem holistically looking at it from all angles – what is the context, what are the end-goals, what are the short and long-term costs, who benefits and how do they benefit, what is the competitive level of the benefits as it fits in the whole, what is needed in communication, what is needed to execute the change, what is needed to administer the change, etc.?

Quite often, the last three points are afterthoughts and are key reasons changes fail to deliver. One of the things he did in his reports and presentations is have sections on these subjects so the client knew what they entailed. And, what it cost. Sometimes changes are too burdensome to administer, so options should be considered.

Second, how he learned of this approach. On the last day of an internal seminar, when everyone is checking flights and airport shuttle arrangements, a fairly round man who I will call Paul got up to speak about this concept he had been using called – the total approach to consulting. No one was listening.

After about ten minutes of a fidgety and bored audience, Paul stepped away from the podium and slammed his hand on the top waking everyone up. He said very loudly, “Look at me. No one hires me for the way I look! This stuff works and if you want to make a difference, you might want to pay attention.” The audience was rapt from that moment forward.

He taught them the total approach and one other important lesson. Read the room. If the room is not with you, then you better change the paradigm. Slamming the podium and drawing attention to his looks as an obstacle got their attention.

Reading the room is why I always wanted to be present with the client, even if we had a colleague on the phone. If the client was not getting it, I could see that first-hand, and metaphorically bang my hand on the podium. Read the room – even the best advice needs attentive listeners.

A first step in breaking down barriers

Many of us have written about how divided we are as a nation. We are more divided than ever, but what does not get written about enough are what brings us together. We do not hear or read as much about the good news stories or people just getting along. Our friend Jill does a weekly post on these kinds of good news stories, but her frequency of covering good news is greater than that of most news publications.

One of the things I have observed in my many years is people will set up we/ they groupings, even when they do not need to or it serves no purpose. I recall a true story from 1987, when a large housing development we moved into had a North side and a South side. At a party, I heard someone make reference to “those folks in the North side” not being good people like us. Really, I thought. This person made up an artificial group to fear and ridicule. Now that is inane.

So, the first step to breaking down barriers is not to create them. Try to avoid we/ they groupings. If we do that, there is no one to blame for our troubles but us. A good step down this path is do not identify yourself as a member of a group unless you actually have to in response to a question. I am guilty of taking pride in being an independent voter, but even that is a grouping. I do that to get my message heeded by members of political groups, but it is still a banner I am waving.

When I hear or see people put down someone for the way they look, worship or love or their heritage it builds off we/ they barriers that have been created. For a diverse country, we tend to complain about the most superficial of things. Just taking food as a counterexample, think of the rich diversity of choices we have as consumers to eat a variety of foods from around the world. We even have “fusion” restaurants that blend together tastes from Asia and Mexico or Italy and Greece, for example. A Hawaiian pizza did not originate in Italy and Fried Chicken and Waffles is alleged to have started in California not the south.

If we can eat these wonderful foods from diverse sources, I think we can break down a few barriers. Think of it as breaking bread with people with different backgrounds. If we did not eat a variety of foods, we would certainly live in a bland world. And, think of how more seasoned the conversation will be as we delve into histories and mutual interests.

So, test yourselves. Lessen the identification of groups. Don’t define yourself by where you go to church and especially not how you vote. An old line comes to mind that is less applied now, but don’t ever bring up religion or politics at a party, as it will start an argument. If you must, focus on an issue at hand, not the grouping. The one group that matters is the human race. Let’s be better human beings.

Southern sandwiches

If South Carolina were a sandwich it would be a tomato sandwich with plenty of mayo on white bread.

If Georgia were a sandwich if would be a pimento cheese sandwich.

If North Carolina were a sandwich it would be pulled pork on a bun with a touch of sauce.

If Florida were a sandwich it wound be a Cuban on that long bread.

If Kentucky were a sandwich it would be a Hot Brown.

If Tennessee were a sandwich it would honor Elvis with a peanut butter and banana sandwich.

If Virginia were a sandwich it would be a country ham biscuit.

If Maryland were a sandwich it would be a soft shell crab sandwich.

If Louisiana were a sandwich it would be a shrimp po’ boy.

If Alabama were a sandwich it would be ribs with white bread, not a sandwich per se, but the folks in Tuscaloosa will know what this means.

If Mississippi were a sandwich it would be a standard peanut butter and jelly sandwich using your favorite jelly.

Note, there are no right answers to the above, only my and other opinions. Where have I strayed? What are your thoughts? I limited this to the south, but let me know of other states.

Losing with dignity – tells you a lot about someone

I read yesterday that losing incumbent Congressman Madison Cawthorn is pitching his own little hissy fit plotting revenge on Republicans who spoke out against him. Does that sound familiar? Is he emulating his idol, a more widely known former president? I will leave off the reasons, but simply say the person who needs the most blame looks back from the mirror when he shaves. I have said the same thing about his idol as well.

How one takes losing speaks volumes about the character of the individual. Winning with grace is also important, but losing with dignity matters a great deal. If someone shows their hind end in the losing process, it is indicative of a person who we should be thankful he or she lost. It is also reveals a person with a fragile ego, who feels they are now being viewed as a lesser person.

In consulting or business, your proposal does not always win. Yet, a key lesson that one learns is the person or group that decides not to hire you, may be the same person or group who will decide whether to hire you in the future. If you burn that bridge after the first failure, then you may be kissing future opportunities goodbye. You may have even won the business on earlier proposals, so if you show your tail, the future revenue stream could be zero. And, zero is still zero in any currency.

I had a narcissistic colleague who was very successful. His teams won many assignments. Yet, everyone better watch out if his team lost. Hissy fit is inadequate to define what happens next. As his senior, I would use suggestions to get him to calm down before calling the client encouraging him to be careful with his words.

If that were not enough, when I attended NCAA tournament basketball games with him where his favorite team and alma mater played, I was forewarned to be prepared when things did not go his team’s way. Screaming would be inadequate to define what happened next. Livid would be a better word. What surprised me is he would be this way even with clients present or at his kid’s ballgames. When I went home after the game, I told my wife, “I will never do that again.”

Losing with dignity. I have said variations of the following on the needed occasions. “I want to thank you for the opportunity. We are obviously disappointed not to work with you on this and wish you the very best. If you need any sounding board input, please do not hesitate to call.” This message shares thanks, disappointment, and well wishes. It could be applied to other situations where you did not come out on top.

And, I can also share, on occasion, my team has been brought in after the project started, as the winner failed to live up to the expectations they created. If we had shown our hind end, that follow-up opportunity would not have existed.

A New Palindrome

Many moons ago, I had a colleague named Ada, who I called my favorite “palindrome.” Ada was a delight to work with and knew precisely what it meant, so she gave me a novel to read called “Palindrome” that she thought I might like. For those who may not know, a palindrome is a word that has the same spelling backwards and forwards.*

The most famous English palindrome is “Madam I’m Adam” which can be read forward or backwards sans the punctuation. Yet, many names are good palindromes. Ada, Anna, Elle, Eve, Hannah, Sis, e.g. fit the bill. And, Mom and Dad are the most popular palindromes. The most recent numerical palindrome is the year 2002, but we had one eleven years before in 1991. Before then, we would need to go back to 1881.

Yet, palindromes can also refer to identical twins. They are as close to mirror images as we can get in nature. Not to spoil the novel by this name, but identical twins factor into the storyline. 

I bring this up as my wife and I have a new favorite palindrome. Ada will have to step aside as the old favorite, as we have a new niece named Hannah. Hannah is a great name to begin with, but the fact it is a palindrome makes it even more worthwhile. Welcome to the world Hannah. I know your parents are glad you were not identical twins

*palindromic number (also known as a numeral palindrome or a numeric palindrome) is a number (such as 16461) that remains the same when its digits are reversed. In other words, it has reflectional symmetry across a vertical axis. The term palindromic is derived from palindrome, which refers to a word (such as rotor or racecar) whose spelling is unchanged when its letters are reversed. The first 30 palindromic numbers (in decimal) are:0, 1, 2, 3, 4, 5, 6, 7, 8, 9, 11, 22, 33, 44, 55, 66, 77, 88, 99, 101, 111, 121, 131, 141, 151, 161, 171, 181, 191, 202, … (sequence A002113 in the OEIS).

The limits of sequential thinking – a reprise

The following post was written a few years ago, but I stumbled upon it today. It stands the test of time regardless of how one tracks progress.

What does sequential thinking mean, you might be asking? Many of us think in a sequential order. Basically, it means I cannot think about a certain thing, because it comes after what I need to do next. Sequential thinking is at odds with a working or living environment that demands a multi-tasking mindset.

When I say multi-tasking, I am not referring to doing more than one thing at one time, although that is its most common description. What I mean is having a list of multiple things to do and balancing the priority and times of when you plan to do them. It is akin to walking while juggling balls in the air. The key is to not drop any balls while you keep walking.

Let me use a few examples to emphasize my point. I may have a list of ten or twenty things to do. I receive information to do one of the items, but that item is not needed for a week. Sequential thinking would push doing that project until later in the week. But, what if you have a hard deadline and the information provided might be incomplete?

The military doctors and nurses coined an apt term called “triage.” So, a multi-tasking way to think of this would be to triage the information for the later project as an earlier step. Then, if it is incomplete, you could ask the sender to clarify or send additional input. Then, you can move onto other things while you wait.

Another example is moving forward with pieces of a project before having all the needed steps complete. One of the best project managers I have ever worked with would apportion a large report out in pieces for earlier completion. She would have folks working on producing the Appendix, Sections 5, 8, 11 and 14, e.g., while the analysis was being done to complete the key findings and recommendations. So, the supporting sections could be completed, so as to reduce the time crunch at the end once the analysis was done.

Although the last paragraph makes so much sense, it is not as widely practiced as you would think. Neither is the triaging concept, except in medical emergency settings. The other thing these two approaches avoid is the bottle-neck created by other projects and demands. And, in so doing, it enables deadlines to be better fulfilled.

As I write this, I recall a very demanding client. She could be a hard-ass on staff, but at the heart of her criticisms often was a legitimate one. If you told her a deadline, she expected you to meet it. The key was to give her a deadline that could be met, not in a vacuum, but in recognition that you had other things to do.

People like to please and hate telling people no. But, having been a consultant and client manager for ages, I would rather someone tell me they were too busy to help, forcing me to find another source, or avoid giving me too aggressive a deadline. This may not surprise people, but many deadlines that are not met are set by the person doing the work, not the client. Managing expectations is vital.

A favorite author, Malcolm Gladwell, confessed in an interview that he writes in an unusual way that works for him. He said he does not do all his research up front, so he outlines the idea, does some research, writes some, does more research, writes some more and so on. Why? Two reasons – he said he would get bored doing all the research, then writing. Plus, the research is fresher in his mind when he writes soon thereafter. He portions out the work in smaller more manageable segments.

Sequential thinking can get in the way of moving forward. I am not suggesting everyone will think like Gladwell or the best project manager I mention above, but think in terms of smaller, earlier steps to move things along.

Wednesday wanderings, April showers and falling

My hiking might get cut short today, if it occurs at all, with the gully washer we got yesterday and one more expected today. If I do walk, it will likely be on streets which will be less muddy. I don’t want to see this old body slipping on a wet hiking trail.

Being a tall person, when I fall it can be quite theatrical. My wife still laughs at me when I walked out of a restaurant in “slippery bottom” shoes I had packed for a trip and started to slide backwards saying “I am going down.” Fortunately, I avoided my prophesy and caught myself on the door rails, but it was funny. Apparently, I had forgotten why I did not wear those shoes anymore.

Each of us are at risk of falling, whether it is the Lucille Ball type fall or a metaphorical one. The key is to get back up, dust yourself off, make sure you are not hurt and keep going. One of the more memorable “I Love Lucy” shows for me is when Lucy took a tumble at a gala with several dignitaries. After washing herself off, she reluctantly went back out to the event. A Spanish diplomat asked her to dance and when she asked why, he responded she had the courage to walk back out here after falling. That was profound for a little boy to hear.

My father fell once in a noticeable way. One of the things I inherited from him is a fondness for alcohol, which I do not imbibe anymore. After rising to a senior position in his firm, my father let his drinking get in the way of being where he needed to be. Something happened in his absence and he was demoted. He had to go into work the next day as a peer not a boss. Now my father never put on airs when in charge, but still that had to be humbling. He eventually worked his way back up and before he retired he was asked to be on the Board of Directors of the parent company.

I have fallen as well. My father’s lesson is a good one. When you fall, the key question to ask yourself is what am I going to do about it? I have shared the lesson before about being demoted to the second team on my high school basketball team. So, I worked even harder in practice and eventually was asked to rejoin the first team. I have also passed many professional exams, but I failed three along the way. The key is to study harder and learn from my mistakes. Eventually, I passed them all and was accredited, but it still hurt to not pass, a feeling I will never forget.

Whether it is Lucille Ball, my father or me, everyone falls. So, don’t forget the answer to that key question and do something about it. You may end up with a skinned knee or bruised feelings, but if those are the worst things, you will survive.

My friend Carol who “leaned in” – a reprise

Although we are two days removed from Women’s History Month, I stumbled onto an old post of eight years ago that tells the true and still ongoing story of my friend Carol, whose decision to change her path forward is an example for us all.

For those of you who follow the wonderful blog called “The Bookshelf of Emily J”  you know that she recently highlighted Sheryl Sandberg’s book called “Lean In: Women, Work and the Will to Lead.” The post can be found with the attached link: http://emilyjanuary.wordpress.com/2014/05/07/women-at-work-leaning-in/. After reflecting more on Emily’s post, I decided to tell a story about my friend Carol who during the early part of her career realized she was not doing what she wanted to do and did something about it.

The fact that she realized she was not fulfilling her dream is not the story, as many come to this realization. The story is she did something about it and took a leap of faith back into her dream. Carol had always wanted to be a social worker, but she listened to the counsel of her father and studied something more practical in college that would gain her a better paying career. Unfortunately, he was focused on the economic value of the career and not the psychic value of helping those in need.

So, she got a great education from a wonderful college and embarked on a career with a major electric utility. She was doing very well, but something was missing. She did not know what until she began volunteering with a crisis assistance organization that helped people who were about to be evicted from the homes or have their power shut off. Through this community service, she rediscovered her social worker mindset and calling. So, she sought and discovered opportunity with this agency.

Since she also had the business mindset from her schooling, she was able to leverage her heartfelt desire to help those in need. Eventually, she became the Executive Director of this organization and has successfully led them for many years. Because of her solid reputation, she is also a go-to person for many community efforts or to be a spokesperson on the plight of those in need. She lends her voice to those whose voice cannot be heard.

I like many things about Carol. But, in my dealings with her, she listens to what others have to say and she is comfortable enough in her own skin to change her opinion if you present good arguments. Yet, she is also confident enough to stick to her guns when she feels she is in the right. And, she can sway those who may disagree with her through her intellect and conviction. Many new ideas have been piloted through her involvement, whether directly or indirectly. She is a wonderful partner. There is an old saying about change. When you are looking to have change, make sure you have people on the bus that will help move it forward. You want Carol on that bus.

Carol leaned in early on. She changed the arc of her career to do something she loved. She rediscovered her passion. Yet, she is also someone who you want to work with. That is one of her true gifts. Together, with Carol on board, we can solve many more problems than without her involvement. She is one those “lights” that President George H.W. Bush spoke of so many years ago. Thanks Carol. You are more than one of the lights – you are a gem.