Greedy...

As an oilman, I am subject to much more bigotry than, say, a drug dealer or a gangsta rapper.   I know that this sounds hard to believe to those NOT in the business, but rings true for those of us who are... especially if you live in "non-oilpatch" towns.

Since I have a variety of involvements NOT in the oilpatch, and occassional social circumstances find me conversing, cocktail in hand, with folks ranging from drummers to investment bankers and all types in between, I get to see first hand the virulence with which our industry is regarded by the "masses".  To be fair, MOST industries are held with at least distaste by an alarmingly large group of people, usually in lockstep with how well they do their job... ie more virulence the better they perform.  An example might be retailers... Walmart specifically.

Why is that?  How did the zeitgeist come to find the most fault in the best, while ignoring the worst or, in fact, celebrating the inefficient?  I have a theory... I have already written in this blog about my theory on the dynamic range of human misery... ie the angst felt by a Highland Park housewife over a mediocre highlights job is the same as the angst felt by the leper in Calcutta over losing another digit... and my new theory is a corollary of my dynamic range of misery (DRoM) theory.

I think humans just like to fix stuff.  As the major stuff gets fixed, the attention is thus turned to more and more mundane stuff.   And because humans don't typically take a systems approach to fixing stuff, especially when they are young, they tend to munge up the machine pretty badly.  By the time  a system is highly efficient and organized, only little things exist to fix.  You can't assume that by fixing the little thing that you won't break the big thing altogether.

What do I mean by "systems approach"?  At it's most basic, I think it is what every husband learns when they try to lie to their spouse.  The lie works on its face, but it needs to seamlessy integrate with the fabric of life.  Hard to keep a bunch of lies straight.  We have all known these kind of folks.  They are generally pretty smart folk.  I know a PhD sedimentologist who has run or had senior positions in various companies and is now the CEO of an E&P company.  I was in depositions with him, and he lied his way through them, every answer on a stand alone basis reasonable, but, taken on the whole, contradictory as hell.  All good litigators know how to expose this.

In any case, back to my point.  Let's take Walmart, a great example of something that has achieved what it set out to do... customer is number one, make things inexpesnive, always striving to find more efficiencies.  It works so well that today Walmart is responsible for 9% of all retail sales in the US.  

Beautifully, they didn't do this by forcing us to buy at Walmart.  They did it by selling stuff people wanted, being in places where people find it convenient to buy, and controlling costs so as to minimize the costs they pass on to consumers. Period.  Add to that Walmart's impeccable reputation of honesty between its vendors and buyers combined with brutal bottom line improvements they expect to see and enforce from existing vendors.  No one sits on their laurels. 

Now, that being said, I wouldn't want to be a Walmart supplier, nor do I particulalry enjoy the Walmart shopping experience, nor, having worked at jobs like these as a teen, would I want to work for them, at least on the store level, or any other big retail chain.  But plenty do.  I am the outlier. 

From what their detractors say, Walmart does not pay its employees very well, nor do they provide them very good benefits.  Walmart has developed operational efficiencies that apparently allow the organization to run without highly competent people, all to benefit of Walmart's customer, who Walmart has identified as the most important driver of success for the company, NOT its employees.  

I would guess that it is the cheap products that draw them there.  As such, Walmart has added to the quality of life of more people (its customers) than any other private enterprise (or perhaps public program) than any other entity on the planet, ever.  And they do so without forcing anyone to work for them, sell to them, or buy from them!

But, But... we need to MAKE them do stuff!  Walmart is villified for what it doesn't do...  Was Walmart applauded by its critics for providing drugs at a cost lower than  any insurance co-pay?  Nope.  Silence.  Applauded for providing food at lowest cost to any and all that wanted to partake? Nope.  Silence again.  

Judging by its shoppers, Walmart is, by any definifition, a hero of the proletariat.  It is attacked for the very things that make it so valuable to so many.  For providing the efficiency and infrastructure to make things cheap. To "fix" this would break what Walmart does so well.

All the anti-Walmart palaver assumes one thing... that Walmart employees are forced to work at Walmart for the rest of their lives.  Is that a reasonable assumption?  That Walmart America exists in stasis?  No one who has ever worked for me has ever assumed that they needed to work for me the rest of their lives.  They worked for me until they found something better.

So, efforts abound to make Walmart less efficient and more expensive.  Unionize it. Force them to pay more to suppliers rather than enforce ongoing process efficiencies.  How does this make Walmart better at meeting our consumer needs?  It doesn't.  It can't.  It only makes Walmart worse.

Of course, we are told that Walmart is "greedy".  This for a company that said it won't tolerate more than a 5% margin on any item.  Of course, other companies are good paying their people more... they get more productivity from them than others would.  Costco for example.  Cool.  More power to them.  That isn't Walmart's game, though.  If and when Walmart cannot keep their people due to losses to Costco, maybe they game will change.  But it isn't here.

Us oilmen are considered "greedy" too.  Give me a person looking out for his or her (or company's) best interest to negotiate with any day.  Negotiating with people that purport to represent a "higher cause" is a sure fire recipe for disaster, because these "higher causes" are so subjective, and thus emotional because they can't be objectively defended.

An employee once asked why we didn't charitably support more causes as a company (we do give individually and promote individual giving among employees individual, we keep company giving to things that have a marketing benefit).  I answered that my shareholders invested in our ability to perform and profit from a specific job, and not for our ability to judge better than they the worth of charities.  That job belongs to each of us, shareholders and employees,  so that we can donate that which has become ours because we do our job well.

 

Comments

[hughw]

"Walmart has developed operational efficiencies that apparently allow the organization to run without highly competent people..."

Sure. Let's even say Wal-Mart employees are incompetent. The law of the jungle kills off incompetents, literally. But in America, most people think incompetents have a right to dignity too. Just 'cause they're, you know, human, not malevolent. They can't do the tricks we set up for them, like complete high school, or go to college, or be young.

So using the ruthless efficiency you praise, Walmart relies on the U.S. taxpayer to provide health care for 10% of its employees (http://walmartwatch.com/blog/archives/arizona_medicare/). They even have HR people counseling employees how best to work the system to obtain Medicaid. It's part of their benefit package!

[Open Choke]

I sure don't think Walmart employees are incompetent. From the negatives about Walmart I have read or heard from my progressive friends I can only assume that they are incompetent, since anyone in their right mind would run fast from such "human indignity" as employment at our Bentonville Buddy. Of course, if that thesis is BS, then Walmart employees are magically restored to dignity for their choice.

WRT Walmart using the socialized medical care we provide at ever expanding cost to taxpayers here in the US via "emergency medicine" and then pawn off on "failures of free markets", then more power to them. Fix the rules of who can use. "Free stuff" will always induce people to figure out how to get it.

How many of your previous employers provided healthcare? Do you provide it to your employees today? Many if not most businesses don't, and I doubt if it is because they don't respect the dignity of their worker.