The Decline of Small Business Is a Five-Alarm Fire Leaders Are Ignoring …

Please don’t tell me that the American economy is moving in the right direction, however slowly, which I hear from politicians and commentators all the time. It isn’t. Not even close.

Key economic metrics offer no encouragement at all — the two big ones, GDP and unemployment, are both woefully inadequate, regardless of what people say. Sure, unemployment as measured by the Department of Labor has gone down, but this is only because the denominator of how many are in the workforce has decreased and is really low as a percent of the population. Meanwhile, GDP will have grown only 1.9% in 2012, which is pathetic. After a serious recession, the economy historically gets one big bounce. It hasn’t happened yet.

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This is the fundamental question I keep asking my CEO clients and I have done so for several decades. What keeps you awake at night?

It’s interesting to note that CEOs of medium to large companies (1000+ employees) are usually pre-occupied with finding solutions for the same 4 or 5 problems.

In 2012 the top five CEO problems were:

1. Innovation

2. Human Capital

3. Global Economic Uncertainty

4. Changing Regulatory Environment

5. Global Expansion and Growth.

These problems reflect a mix of the macro business environment, which a CEO does not control, and company-specific challenges that require thoughtful CEO action with a well-executed business solution.

The Funny Feeling Inside Your Head …

Cognitive dissonance is an uncomfortable feeling caused by holding two contradictory ideas simultaneously.

Wikipedia: Cognitive dissonance is a psychological state that describes the uncomfortable feeling between what one holds to be true and what one knows to be true. Cognitive dissonance theory is one of the most influential and extensively studied theories in social psychology.

Similar to ambivalence, the term cognitive dissonance describes conflicting thoughts or beliefs (cognitions) that occur:

– at the same time, or
– when engaged in behaviors that conflict with one’s beliefs.

In academic literature, the term refers to attempts to reduce the discomfort of conflicting thoughts, by performing actions that are opposite to one’s beliefs.

Example:
Smokers tend to experience cognitive dissonance because it is widely accepted that cigarettes cause lung cancer, yet virtually everyone wants to live a long and healthy life. In terms of the theory, the desire to live a long life is dissonant with the activity of doing something that will most likely shorten one’s life.

The tension produced by these contradictory ideas can be reduced by quitting smoking, denying the evidence of lung cancer, or justifying one’s smoking. For example, a smoker could rationalize his or her behavior by concluding that everyone dies and so cigarettes do not actually change anything. Or a person could believe that smoking keeps one from gaining weight, which would also be unhealthy.

More from Wikipedia …

See also: How and Why We Lie to Ourselves: Cognitive Dissonance