UPS recently found itself unwillingly auditioning for the Grinch part in real life. A combination of factors had left the package shipping company unable to deliver its growing backlog of Christmas presents on time. And it was unlikely that American shoppers would be as understanding or forgiving as the folks in Whoville had been.
Like everyone else, UPS had underestimated the impact of increased consumer confidence of shoppers this year. More importantly, it had underestimated the scale of last-minute shopping. The pattern of on-line shoppers, especially, had been to order early. This year not only did online sales continue later into the calendar but retail sales for bricks-and-mortar stores, whose sales had been doggo for years, came roaring back.
Many of those sales included rapid delivery promises from retailers — based, in turn, on promises made to shippers by UPS. If the company failed to deliver the packages on time, the damage to its reputation would be ruinous.
UPS also faced a shrinking pool of labor available during the pre-Christmas period. The rebounding economy offered more permanent jobs, and that diminished the response to the shipping firm’s calls for temporary help.
As the package volume continued to expand and Christmas grew ever nearer, the company was running out of options. Ultimately, in some areas of the country, they began calling in their last reserve: the finance and accounting staff, the marketing specialists, and general office workers whose normal work already kept them especially busy at this time of year.
Invoking another Christmas story, it was almost a Rudolf the Red-nosed Reindeer plea, “Won’t you deliver my packages tonight?” As it turned out, they would, and did; many using their own cars to make the deliveries on time.
There are two lessons to remember about this successful UPS experience — one microeconomic and one macroeconomic.
Microeconomics deals with the operations and decisions of individuals and firms. In turning to the office staffers to help the company out of genuine crisis, the accountants realized that they were needed. In normal times accountants, marketers, and support staff are often viewed as overhead. But suddenly they were needed, really needed, and that builds a lasting sense of belonging and teamwork that no amount of artificial team-building exercises can even approach in value.
Firms seeking a better sense of teamwork should look at the UPS experience and recognize the motivational value of really being needed and the fun of being part of a team.
At a local distribution business, for example, the periodic arrival of a 40-foot trailer full of boxes to be unloaded quickly had become a time when people made themselves scarce. Doctor’s notes appeared, excuses multiplied until, finally, the warehouse crew reconciled themselves to working alone for the hours that it took to complete the off-loading and sorting.
A new owner and new management took over and decided to change things. A manager and a staffer appeared as the trailer was opened at the loading dock and the public-address speakers began to blast the U.S. Marine Band playing favorite marches. The manager and the staffer pitched in with the others – sliding, carrying, and sorting the 30-40-pound cartons until the trailer was empty.
That went on for a few weeks, and perhaps it began to look like fun. A volunteer appeared and a place in the off-loading chain was found for him. By the end of that month, there were more volunteers than room for them and the operation had to be restructured to absorb all those who wanted to work. What had been drudgery to be avoided had become fun, and more particularly, fun that welded the firm’s workers warehouse and staff, into a team.
Macroeconomics deals with economy-wide concepts such as rate of incomes, spending, saving, investment and economic growth. And in this area, the lesson of UPS’s successful operation is that attitude, teamwork, energy, and confidence can make all the difference in overcoming obstacles and achieving economic success. These factors, which have no visible market value themselves, are, in fact, the deciding elements in determining an economy’s growth rate. And, as we have learned from our foreign aid programs, where those factors are absent, no amount of investment will produce lasting economic growth. In fact, it may not produce even non-lasting economic growth.
At the macroeconomic level we see economic growth where until recently we saw economic doldrums. When we look for the cause of this growth, though, we find the usual measurable economic factors largely unchanged. What was different was the level of optimism, consumer confidence and positive attitude.
There is no economic variable named for it but what appears to have caused this economic growth is that America is getting its moxie back. It’s a good thing.
James McCusker is a Bothell economist, educator and consultant.