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Carefully Investigate Powerful Government Trends

Mar 25, 2008
Chances are that you monitor legislation and regulation that affect your company and industry. To get a jump on changes, you may even adapt to shifts that are still under discussion. Be careful that you don't anticipate government trends that never turn into reality.

Governments have the ability to set and change the rules by which your company operates. Consequently, most managers pay a lot of attention to shifts in these mandates. However, be aware that governments don't always follow through on what the news media suggest will be forthcoming.

For example, in the 1970s it was widely expected that Senator Edward Kennedy of Massachusetts (the nickname, "Taxachusetts," is based on the propensity of the Commonwealth's citizens to vote for legislators who impose unusually high tax burdens on them) would be able to push through national legislation establishing government-run national health care. Of course, it hasn't happened yet; but the likelihood of its occurrence was considered by many to be so strong that dozens of major companies dropped out of the health insurance industry during this period.

That behavior, in turn, helped make health insurance a much better business for those who remained in it so that the threat of such legislation became an irresistible force in their favor. Based on this example, you should begin to measure the impact of possible changes in laws and regulations, as well as actual changes. Both are likely to create changed behavior by competitors and customers, based on subjective perceptions of the future.

Deregulation at the national level in the United States has provided a similar fair wind for those who were nimble in aligning themselves to take advantage of new opportunities. Deregulation of broadcasting allowed broadcasting companies to become much larger and more profitable, and opened up improved ways of serving customers. Deregulation in the airline industry has made it easier for new companies to start up and, in the telephone industry, made the success of newer long-distance carriers possible.

The privatization trend in Europe has been a similarly important irresistible force. While many firms were state-owned enterprises, political considerations (such as maintaining employment and keeping prices low) dominated all decisions. When the public took on ownership directly through purchasing shares, these organizations began to act more freely like traditional for-profit enterprises.

In the 21st century, there has been an increased tendency to outsource government business in the United States without supervision. Enormous profits have been gained by primary contractors in Iraq, for example, who never completed their contracts, but were not held to those contracts by the Bush Administration. This is a trend that's unlikely to continue if there is a change in parties in the White House.
About the Author
Donald Mitchell is an author of seven books including Adventures of an Optimist, The 2,000 Percent Squared Solution, The 2,000 Percent Solution, The 2,000 Percent Solution Workbook, The Irresistible Growth Enterprise, and The Ultimate Competitive Advantage. Read about creating breakthroughs through 2,000 percent solutions and receive tips by e-mail by registering for free at

http://www.2000percentsolution.com .
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