However, we need to hang on to some perspective here.  According to Employment Security Commissioner Karen Lee,  ”March was the 18th month in a row that Washington’s unemployment was under 5 percent. It is a phenomenal record, despite the rise in unemployment.”  

Even more telling, if we trouble to remember it, is that an unemployment rate below 5% has long been considered full employment.  The current angst seems a little extreme given these numbers and these facts. 

 In Washington, we are better off than the nation as a whole.  Nationally, the rate jumped to 5.1% in February, from 4.8%.  Even that higher rate is close to that full employment level, although there are areas of real job challenge in the country.  I was born and raised in Michigan where the state’s economic health goes hand in hand with the auto industry.  So they are far closer to a real recession than we are in Washington.  During my last visit to Michigan, seeing so many lakefront mansions in Grosse Pointe for sale, and languishing on the market, was something of a shock. 

Yes, we are facing some real economic challenges in this country, but let’s remember history and count our blessings.  I finished my college education in 1975 and hit the job market with an unemployement rate fluctuating between 8 and 9%!  I am not relying solely on my memory here.  I got those numbers from The Federal Reserve Board - a chart showing civilian unemployment rates from 1974 - 2007.  (Ya gotta love the internet!) 

About 8 years later, when I had saved enough to by my first house, I managed to get an FHA mortgage at 13.5% and thought it was a great deal.  (It was, at the time.  By the mid 1980’s, many of my friends and colleagues had mortgages of 17% and higher!) 

We may have something of a bumpy economic road ahead of us, but let’s not lose sight of the actual numbers.  We can hang onto perspective, and a great deal more calm, if we use real information and logic, not just emotion.

Over lunch today, I listened to reports and discussions addressing this subject.  Most of it was focused specifically on the mortgage “crisis”.  There is much wailing and gnashing of teeth over the poor homeowners who can’t manage their increased mortgage payments and may be faced with losing their homes.  Although I feel real compassion for anyone in danger of losing his/her home, I think the current discussion is taking place without adquate context.  That context is this.  Only a very small percentage (around 2% is the number I heard on the news today) of homeowners find themselves in this bind.  The other 98% are meeting their obligations, in spite of adjustable rate mortgages adjusting upwards.  So the crisis is really overblown, at least when considering people losing homes.  You’d hardly know this, to listen to the average newscaster, not to mention the politicians.

So is it right for that responsible 98% to bear the cost for the 2% who overextended themselves?  Because that’s who will bear the cost if the government starts buying mortgages or bailing out homeowners - we, the taxpayers.  I don’t think so.

Should we find ways to offer information, guidance and other support to help struggling homeowners wend their way through the mortgage morass?  Sure!  I’m all for education, coaching, and guidance.  That’s a far better way to deal with the current crisis.  It’s cheaper and more effective in the long run, since a better educated consumer will be more responsible with their choices in future.  Perhaps we can prevent a repeat.

Lest you think me hardhearted or lacking in compassion, let me assure you that I don’t think we should be bailing out corporations, either.  I would much rather see our free market and strong capitalism function without government interference.  It works better that way, ensuring a strong economy for all of us!

Also like fellow Washingtonians, we listened to the news.  Stories of loss, homes, belongings, the accumulation of a lifetime of memories, and in the worst case, loss of lives, were heartrending and touched us all.  We can all identify with our neighbors who lost so much and, as is common in this wonderful country we live in, individuals and organizations jumped in to help. 

As business owners, we were particularly touched by seeing the work of lifetimes spent building successful businesses wiped out in minutes.  A mudslide inundating a popular restaurant.  Stores with carpets now brown with slimy silt and stock ruined.  Grocery stores with fresh and frozen inventory ruined by power outages.  Third generation family dairy farms with their herds wiped out.  Somehow, this story was the hardest to hear and see.  These aren’t just cows!  They are the living core of a business, generating a living for the farmers and food for all of the rest of us. 

How do you bounce back from this?  As business consultants, how would we advise our clients in the face of losses this great?  Every business is different, but there is a basic core of business principles that cross the lines between industries and types of businesses.  We believe the initial focus should be on gathering information and possible sources of assistance and making a plan to move forward.  Then take action.  Each small step will help heal the soul as the work begins to heal and rebuild the business.

Here are some initial steps to consider.

Talk to your advisory team.  Every small business owner should have an advisory team consisting of at least a CPA, business attorney, business consultant or advisor, banker and commercial insurance agent.  This is the time to tap that resource for support and guidance.  In this case, start with the insurance agent.  He/she can advise you on your coverage and how to report the loss.  Your business consultant can help with ideas, contacts, and the wisdom of prior experience.  A consultant can also provide guidance and focus at a difficult time.  Your attorney can provide similar guidance, but with a focus on the potential legal issues. 

Document, document, document.  It is tempting to dive in and start cleaning, but it is critical to document the loss first.  Take pictures.  Take videos.  Make detailed lists of equipment, inventory and other items lost.

Read the small print in your insurance policy.  It is best to do this when you get the insurance in the first place, but many of us don’t do it or, if we do, we don’t remember the details.  You need those details now to find out just how much of your loss is covered.  Most policies don’t cover floods unless you have obtained separate flood insurance from the government.

Is your loss the result of a natural disaster or someone else’s act or negligence?  Although too many in our current litigious society think lawsuit first, it is still something that may be appropriate in some circumstances.  Consult your attorney.

Consider a temporary location.  Is it possible for your business to get started sooner in alternate quarters and operate at a level sufficient to begin generating dollars?  If so, start planning for that.  Talk to a commercial real estate agent.  Make lists of equipment and supplies required.

Determine what funds will be required to get back in operation.  Know how much you need.  Then determine potential sources and go after them.

Apply for State or Federal emergency grants or loans.  Disaster declarations free up public funds to help those who face serious losses.  This may take a while, but find out what the process is.  If you are still feeling overwhelmed (and who wouldn’t be), get some help.  Again, tap your advisors.  They may be able to help handle this task, taking it off your shoulders.  However, don’t wait and don’t rely solely on state or federal aid.  It is a wonderful thing that our government does, helping citizens who have suffered so much loss.  But remember that the strength of this country is the strength, ingenuity and self reliance of its citizens.

Be open to receiving help.  There are many sources of help available to you, both personal and professional.  Use them!  Your neighbors outside of the immediate disaster area just need to know what to do and how best to help.  There are many business professionals touched by what we have seen who want to lend a hand.  But you need to ask.  Since networking is the lifeblood of those of us who work in advisory roles, if we can’t provide the exact help needed, we probably know someone else who can.

Put a recovery plan in place and begin executing the plan.  If you establish goals for your business recovery and organize the big tasks ahead, you stand a much better chance of success.

Look forward, not back.  Regret, loss, grief, worry – all these are tough to deal with and can weigh you down and hold you back.  Learn from any past errors and make changes to avoid repeating them, but don’t dwell on them unnecessarily.  Look forward.  Rebuilding is a positive thing.  Believe us when we say, all of us in the business community are cheering for you and stand ready to lend a hand.

We all get to be kids today, to whatever degree we choose.  I am ready for the fairly small crowd of Trick or Treaters we get each year, with a stock of candy (in some of my favorites varieties, of course – I’m weak when it comes to candy).  I’ll have to make sure I have batteries in the camera, too.  The children and their costumes always tickle me.

However, when I look at business, it seems to me that there is more darkness and gloom and doom than is warranted.  I get regular news alerts from the Wall Street Journal.  Today, I got the following:

“Oct. 31, 2007

The U.S. economy grew at an annual rate of 3.9% in the third quarter, the fastest pace in 1 1/2 years, the Commerce Department said, as surging exports and stronger consumer spending helped counterbalance the weakening housing sector. The gross domestic product report suggests that the economy is thus far holding up well to the strains in the housing and credit markets, which had intensified during the third quarter.”

In spite of the so-called mortgage meltdown, our US economy is holding up fairly well.  I looked at the entire article in the WSJ and found the writer to be balanced, citing both good and bad news.  However, the overall assessment was pretty decent.  Here are a couple of samples: 

 “Most economists expect growth to slow through the end of this year and into next year, as the fallout from a deteriorating housing market, higher oil prices and credit-market woes continue.  … Still, most forecasters expect the U.S. to dodge a recession.” 

“The latest employment report from payroll firm Automatic Data Processing suggests that the government’s monthly jobs report will show a gain of some 125,000 jobs in October, a gain over previous months. And inflation appears to be contained, with the price index for consumer expenditures — excluding food and energy — rising 1.8% in the third quarter versus 1.4% in the second.” 

In the State of Washington, our unemployment rate rose very slightly, to 4.2% from 3.9% if I remember correctly, but that is still so low as to be close to full employment.

So, why the general doom and gloom?  Well, in my opinion, some of it comes from the mainstream media who demonstrate two problems with the economy.  First, they work on the principal of “If it bleeds, it leads.”  So they almost always report the bad news, or the cautious news as bad news.  Second, there are very few who understand business or economics.  Third, the reporting in the daily paper and in evening newscasts, unfortunately the primary source for too many citizens, is incredibly shallow.  It rarely delves even a fraction of an inch below the surface headline. 

The other source for gloom is simply emotion and the perception by regular folk, gleaned from what they absorb from the information swirling around them, that things aren’t great.  Not everyone takes the time to delve behind the headlines.  I can’t help but wish the media would, however.

It seems Sprint decided to shed customers who they felt were overusing their customer service lines.  The letter was sent in late June to a supposedly small number of Sprint customers, citing too many phone calls as the reason for terminating their service. 

On the surface, anyone who has been on the receiving end of customer service calls can understand Sprint’s issue.  Some customers can be so “high maintenance” that it is not profitable to keep them.  Angry customers can occasionally be verbally abusive as well.  Although the old saw “The customer is always right” applies in most cases, and one is far better off dealing with the issue in a way favorable to the customer and moving on, there is no reason anyone should have to deal with extremes of abusive language or verbal threats.

Digging below the surface, however, I question Sprint’s wisdom in taking this action.  First, Sprint hasn’t been doing that well, so why would they deliberately shed much needed customers?  The article I read mentioned their high “churn” rate, higher than the competition’s.  It’s always tougher to get new customers than get repeat business from happy current customers, so why rock a leaky boat?

Second, I question how Sprint counted the calls.  As I searched the internet, read blogs, and followed response threads, I saw lots of comments about bad customer experiences when calling Sprint.  We’ve all had at least one instance of waiting on hold for customer service, any customer service – not just Sprint’s, and then having the phone system hang up without ever reaching a live human being.  Assuming you have a real issue, what do you do?  You call back!  The call counter ticks.  What if you reach a customer service rep and he/she can’t handle the issue, so they forward you to someone else?  I’ve talked to as many as half a dozen people before getting issues resolved.  Does Sprint count these as individual calls?  The call counter spins………

Third, what if the volume of service calls comes as the result of recurring, possibly systemic problems?  Some bloggers out there were calling Sprint monthly to deal with constant billing problems!  Hardly seems fair to then drop the service for too many calls.  But then, as my husband frequently reminds me, “Fair is a carnival with rides.”

Clearly, there are many possible causes for the large volume of customer service calls, coming from both Sprint and its customers.  However, it certainly seems counterproductive for a troubled business to deliberately cause a flap over its own customer service!  Did they think the word wouldn’t spread?

Another product of my web research on this subject today was an article I found on the MSN Money site – “The Customer Service Hall of Shame” – by Christopher Oster.  Sprint topped his list.  Now, how is such a distinction likely to appear to employees, customers, prospects and investors? 

It doesn’t look good. 

What do you think?