White tower decisions without a grasp on the systemic impact of those decisions is a common flaw of leaders who are out of touch with reality. It happens in business, it happens in education, and it happens most often in government. Those who are proponents of systemic thinking know that even the smallest decision, especially one made in a vacuum, will domino and cause havoc on numerous fronts.
An example in the restaurant business is a new chef in a property who is determined to radically change a menu to reflect his or her style without paying attention to those who will be affected. When a menu changes, the vendors are likely to change to accommodate new ingredients, all cooks in the operation will need to be trained to thrive with new preparations and presentations, there is a chance that current kitchen equipment may need to be adjusted, china and glassware may need to evolve to adapt to revised presentations, someone will need to prepare and test recipes, photos of presentations will be taken, tastings will need to occur, the front of the house will need ample training to understand each dish, marketing may need to evolve if the concept is a radical departure, and the guests who have been targeted in the past will likely change to some degree. It is never as simple as just changing the menu. Thinking all of this through while engaging input from every stakeholder will make for a smooth transition, when a menu is changed at the whim of the chef then you can expect chaos.
The US government is notorious for making decisions to leverage some type of anticipated outcome without fully understanding the systemic impact of those decisions. In recent months tariffs have been used as a tool for both deal making and retaliation for some action or inaction by another government. Tariffs, however do not simply impact the government target, they impact a series of stakeholders who are innocent recipients of devastating actions. Tariffs on China resulted in China cutting off the purchase of American soybeans. Many American farmers, who always struggle to make ends meet, had converted their land to the production of soybeans because China was willing and able to purchase enormous amounts. So, although a tariff may have an impact on China’s economy – they took American farmers along for the ride, as reluctant passengers. There is a cost, and the government uses the livelihood of hard working American’s as leverage without even giving baseline consideration to the results. Sure, the government turned around and offered subsidies to farmers after the fact, but then who pays for that?
A short while back the U.S. imposed a 25% tariff on European wines and other perishable goods – this of course, was very challenging for European winemakers, but it also impacted importers in the U.S., wine shops, longshoreman, wine distributors, restaurants, and wine consumers. Some may look at wine as a luxury, but think of the thousands and thousands of people whose livelihood was impacted in the process.
There is a current proposal to increase that tariff to 100%. This would not only impact European Wines, but other products such as Olive Oil, Scotch, Whiskey, olives, and Imported meats and cheese. These “luxury items” are connected to farmers, artisans, wine makers, distillers, cheese maker’s, wine importers and exporters, wholesalers, retailers, transportation providers, restaurants, and other retail businesses. Keep in mind, that the Restaurant Industry in the U.S. is the second largest employer of people in our country. When we loosely toy with tariffs of this type we are playing with careers and businesses on both sides of the equation. Obviously, a tariff on these European goods would be met with a similar reaction to American goods moving to Europe. There is rarely a positive outcome as a result of tariffs, yet governments continue to use them as a tool for negotiation.
We live in a global economy, an economy that thrives on the knowledge that anyone can produce a product and find a market for it on any point on the globe. This is an amazing benefit for all parties when trade is open and fair. Tariffs are not a fair ingredient in a global economy.
If the 100% tariff is imposed then there will be thousands of small businesses that will likely close their doors, tens of thousands of employees who will face the fear of layoffs, and a change to America’s global marketplace image that will be hard to recover from.
Maybe spending more time filling empty diplomatic positions within the State Department, investing in building and maintaining great relationships with global partners, improving trade deals rather than scraping them, and thinking decisions through by communicating with all impacted stakeholders would be a better approach.
If you want to help the countless American workers and small businesses that would be impacted negatively by these tariffs, then please take a few moments to connect to the link below and offer your comments before January 13 (the open comment period).
Send, via the electronic form to the Federal Trade Commission.
PLAN BETTER -TRAIN HARDER
THINK DECISIONS THROUGH
Harvest America Ventures, LLC