Isegoria

Judy Keen of USA Today reports that economic survivalism is taking root as more families take steps toward self-sufficiency:

• Stockpiling. When the stock market drops, orders surge for freeze-dried food, survival kits and emergency supplies, says Nitro-Pak president Harry Weyandt. One best seller: a $3,375 food reserve that feeds four people for three months.
• Gardening. Sales of vegetable seeds and transplants are up 30% from 2008 at W. Atlee Burpee, the USA’s largest seed company. The National Gardening Association says 7 million more households will grow food this year than in 2008 — a 19% rise. A book on building root cellars is the top seller at Johnny’s Selected Seeds in Winslow, Maine, supervisor Joann Matuzas says.
• Canning. Jarden Corp. says sales of its Ball and Kerr canning and preserving products are up more than 30% from 2008. Sonya Staffan, owner of The Jam and Jelly Lady commercial cannery in Lebanon, Ohio, is offering twice as many classes this year.
• Sewing. More people are learning to sew so they can mend clothes and make home décor, says Rachel Cohen, spokeswoman for SVP Worldwide, owner of sewing-products makers Singer and Husqvarna Viking.
• Relocating. Steve Saltman, general manager of LandAndFarm.com, a national real estate company, says more customers want to “live simply in a less-expensive place.” Jonathan Rawles of SurvivalRealty.com says more people moving to rural areas “are specifically worried about economic and social instability.”

When in doubt, go to your customers, Norm Brodsky (The Knack) says, looking back at the transit strike his fledgling courier service faced in its first year:

I realized I was facing a potential disaster. Perfect Courier was barely seven months old. We were doing about $30,000 or $40,000 a month in sales. Deliveries by car or truck accounted for about one-third of our revenue. The rest came from messengers who got around the city on public transportation. Losing the messenger sales would cripple us. Granted, we could live off our receivables for a while, but we wouldn’t be generating very many new ones. What would we do when the cash ran out?

And there were other issues: How would our people get to work? For that matter, how would our customers’ people get to work? Would we be able to keep selling? Would our customers stop paying us? How would we meet payroll? We couldn’t very well lay everybody off for the duration of the strike, which — for all we knew — could go on for months. Somehow, we had to come up with a plan that would allow us to survive until some sort of settlement was reached. But what kind of a plan?

I was at a loss. I decided I needed advice from someone who’d been through the previous transit strike, in 1966, and could perhaps tell me what to expect. As it happened, one of our clients was a major accounting firm called Oppenheim, Appel, Dixon & Company. The head of the mailroom there was a guy named Sam Revson, who’d been around forever and whom I held in high regard. Because the strike was scheduled for the busiest part of the tax season, I figured Sam might have made some contingency plans, and I wanted to know what they were.

I dropped by his office one day in the middle of March. “Sam,” I asked, “what are you doing for the strike?”

“Why?” he said. “Are you thinking of transporting people during the strike?”

The thought hadn’t occurred to me, but it sounded like a reasonable possibility. “Yeah,” I said.

“That’s a great idea,” he said. “We could really use you. It makes sense, because you have vehicles already.”

“Yeah,” I said. “They’re ready to go.”

“Particularly being located next to Penn Station, like you are,” he said. “Assuming the Long Island Railroad doesn’t go out, people could just walk across the street, and you could take them downtown. But how are you going to handle the pickup at the end of the day? Have everybody meet somewhere?”

“Yeah,” I said. “That’s what I’m thinking.”

“It’s probably the way to go,” Sam said. “What are you going to charge?”

“I figure $20 a person,” I said, picking a number out of the air.

“Each way or round trip?” he asked. He didn’t seem to have any problem with the price.

“Each way,” I said. “So, $40 round trip.”

“How are you going to know which people are coming back with you?” he asked.

“Once we take them downtown, we assume they’re coming back, and so you have to pay for the round trip.”

“OK,” Sam said. “Are you going to issue passes or sell tickets or what?”

“We’re going to issue passes,” I said. “And we’re going to number them. How many people do you think you’ll have?”

“Well, if it’s just a transit strike, not a Long Island Railroad strike, we’ll have about 50 people,” he said. “How often do you plan to run the shuttle?”

Suddenly, it’s a shuttle. “About every half-hour,” I said. “They’ll come up to our place. We’ll have coffee and doughnuts for them, at no charge.”

“What if there’s a Long Island Railroad strike as well?” he asked.

“We’ll have a carpool service,” I said, thinking fast. “We’ll have pickup points on Long Island, one on the North Shore, one on the South Shore, and a couple in Queens.”

“Sounds good,” Sam said. “Do you want a deposit?”

“Yeah, of course,” I said, “and I’ll need a week’s worth, because we have to set up this whole system. You’re the first person I came to, because you’re our best customer. I have only so much capacity. If you want to do this, I’ll need the deposit right now.”

“OK,” he said. “What if the strike doesn’t happen?”

“The deposit is nonrefundable,” I said.

“OK,” he said. I left with a check for $10,000.

When I got back to my office, I told everybody what had happened, and we all had a good laugh. Then we went to work calling our other customers, making laminated strike passes, and figuring out how we were going to accommodate all the people who wanted to take advantage of our new service. The truth was, we had only four vehicles, and we had to get our own people to work as well. “How can we possibly do this?” my employees asked as more and more customers signed up.

“I have no idea,” I said, “but we’d better come up with something.”

We decided to call everyone we knew who worked in Manhattan and owned a car. “Here’s the deal,” we said. “We’re going to pay you to drive into the city, plus we’ll cover your parking, gas, tolls, everything. You’re going to have to drive anyway. With us, you can make money doing it. You just have to agree to take some other people with you.”

We managed to put together a network of about 40 drivers — friends, friends of friends, relatives, friends of relatives, relatives of friends, you name it — and were ready when the strike began on April 1. Coordinating the operation proved to be the biggest challenge. During the strike, some of the drivers got sick, while others ran into conflicts and couldn’t make it. The needs of our customers were constantly changing as well. I wound up sleeping at the office along with two of my employees to handle the calls that came in from customers all night long and to find replacements for the dropout drivers.

In the end, the transit strike lasted almost two full workweeks. The Long Island Railroad workers went out as well, but only for a day. Still, the city was in chaos. There weren’t nearly enough cabs to accommodate the thousands of people looking for rides. We did our best to adapt. Among other things, we came up with a new system for the messengers who didn’t depend on public transportation. Far from declining, our messenger and delivery business boomed during the strike. So did our new car service. As word spread about what we were doing, more and more people contacted us. Commuters arriving on the Long Island Railroad would come across the street to our office and ask for a lift downtown. We’d tell them, “Unless you’re a customer, we can’t help you.” We landed a lot of new accounts that way.

Just as important, our ties with our existing customers became closer. Before the strike, for example, we’d had only a small portion of the delivery business that Sam’s firm did, and we’d had no contact with the senior people. During the strike, we saw them every day, and they became our friends, as did the executives at other accounts. They came to our office for coffee and doughnuts. Our people would serve them and then drive them downtown. A lot of them increased the amount of business they did with us. At the end of the strike, our monthly sales were more than twice what they’d been at the beginning.

By then, of course, we were ready for it to be over. Although we’d done well financially, the 11 days of the strike had been utterly exhausting. Aside from the additional cash and the new sales, I took away from the episode one of the most important lessons I’ve learned in business: When in doubt, go to your customers.

James Surowiecki notes that firms going into a recession are worried more about either sinking the boat or missing the boat:

In the late nineteen-twenties, two companies — Kellogg and Post — dominated the market for packaged cereal. It was still a relatively new market: ready-to-eat cereal had been around for decades, but Americans didn’t see it as a real alternative to oatmeal or cream of wheat until the twenties. So, when the Depression hit, no one knew what would happen to consumer demand. Post did the predictable thing: it reined in expenses and cut back on advertising. But Kellogg doubled its ad budget, moved aggressively into radio advertising, and heavily pushed its new cereal, Rice Krispies. (Snap, Crackle, and Pop first appeared in the thirties.) By 1933, even as the economy cratered, Kellogg’s profits had risen almost thirty per cent and it had become what it remains today: the industry’s dominant player.

You’d think that everyone would want to emulate Kellogg’s success, but, when hard times hit, most companies end up behaving more like Post. They hunker down, cut spending, and wait for good times to return. They make fewer acquisitions, even though prices are cheaper. They cut advertising budgets. And often they invest less in research and development. They do all this to preserve what they have. But there’s a trade-off: numerous studies have shown that companies that keep spending on acquisition, advertising, and R. & D. during recessions do significantly better than those which make big cuts. In 1927, the economist Roland Vaile found that firms that kept ad spending stable or increased it during the recession of 1921-22 saw their sales hold up significantly better than those which didn’t. A study of advertising during the 1981-82 recession found that sales at firms that increased advertising or held steady grew precipitously in the next three years, compared with only slight increases at firms that had slashed their budgets. And a McKinsey study of the 1990-91 recession found that companies that remained market leaders or became serious challengers during the downturn had increased their acquisition, R. & D., and ad budgets, while companies at the bottom of the pile had reduced them.

Lambic beer — which is “startlingly sour, like plain yogurt, and full of musty and meaty flavors” — used to be the only kind of beer:

Lambic is brewed only in Brussels and a few towns on the city’s western edge — and only a dozen breweries make it. Cantillon makes around 32,000 gallons a year; Anheuser-Busch InBev pumps out more than 1.3 billion gallons of Bud Light annually. Bottles are easy to find in Brussels, but it’s likely to take a committed search anywhere else.

All beer starts out roughly the same: Some sort of grain is cooked in water to turn its starches to sugar. The brewer then adds yeast to turn the sugars to alcohol.

Brewers of lambic skip that last step. At Cantillon, the cooked grain-broth — wort, it’s called — is pumped up to the attic, then dumped into a giant, copper tub beneath the eaves that looks like a children’s splashing pool. It cools there overnight, picking up the wild yeasts and bacteria floating in the Brussels air.

This is the same method the first human to concoct beer most likely used thousands of years ago. Like true sourdough bread and natural yogurt, lambic is resolutely pre-industrial and is fermented with whatever bugs happen to be nearby.

Belgian scientists have deconstructed lambic and found scores of different species of micro-flora. Two important types are lactic-acid bacteria, which make lambic sour, and yeasts of the genus Brettanomyces, among them B. bruxellensis, which give lambic its characteristic aroma. “Horse blanket” is the term favored by beer cognoscenti. This is not a terribly useful olfactory cue for those of us who dwell in cities, but the scent is of hay and must — and also of something very much alive. It is a weird concept for beer, no doubt, but strangely compelling and astoundingly complex. Needless to say, sour mustiness is a tough sell — don’t look for commercials of sweaty young things dancing to reggaeton and taking swigs from bottles of lambic.

It’s not just the sour taste that led brewers to emphasize other styles of beer:

Lambic brewing as done at Cantillon would drive the bean-counters of a big brewery mad. Cantillon can brew only in the colder months, when the weather is right; the brewery gets in about 20 working days a year — if the weather turns suddenly warm, a batch can be spoiled. Most of the product sits in inventory for years before being sold, and the long aging in wooden casks means about a third of what’s brewed is lost to evaporation — the “angel’s share,” as it’s known.

“The angels of Brussels are great gourmands,” the elder Mr. Van Roy says, standing in the attic amid sacks of grain, an orange scarf knotted at his throat.

“The big brewers can’t work like us,” he says. “It’s impossible. They have staff and other expenses.” At Cantillon, “there are no directors or administrators. There’s a father, a mother, children and now grandchildren.”

Apologies work, Peter Bregman reminds us:

A friend of mine, Paul Rosenfield, was skiing with his six-year-old son Yonah when Yonah fell. It was not a terrible fall, but the binding didn’t release and Yonah broke his leg. After an emotionally wrenching day spent in the emergency room tending to his child, Paul went to the shop to return the skis and speak with the owner.

The owner of the shop immediately became defensive. He claimed the bindings were set within the normal acceptable range for Yonah’s 40-pound weight (in fact one reading showed the binding set above 60 pounds). He claimed he used a special machine to calibrate the setting, a machine that had been used in several court cases. And he initially resisted Paul’s request to see the printout from the machine’s test.

Paul went into the shop to have a conversation and he left angry enough to sue.

I asked him what the shop owner could have said that would have given him a different feeling.

“If he had been more concerned with the injury than protecting himself, if he had apologized, if he hadn’t tried to cover over the fact that the bindings were too tight, if he hadn’t given me a hard time about asking for a copy of the measurement printout, if he hadn’t mentioned how many times his machine was used in lawsuits, then I would have left feeling less angry.”

We try so hard to protect ourselves from lawsuits that we bring on lawsuits. We forget that we are human beings dealing with other human beings. And what human beings want more than anything is empathy — to be cared for and treated with respect.

By avoiding responsibility, empathy, and apology, the shop owner became a target for all of Paul’s anger about the accident.

In a study of medical malpractice lawsuits, the top five reasons people gave for initiating the lawsuit were:

1. So that it would not happen to anyone else
2. I wanted an explanation
3. I wanted the doctors to realize what they had done
4. To get an admission of negligence
5. So that the doctor would know how I felt

And the number one thing the doctor or hospital could have done to prevent the lawsuit? An explanation and apology.

When the University of Michigan Health System experimented with full disclosure, existing claims and lawsuits dropped from 262 in 2001 to 83 in 2007.

Apologies work. Real, heartfelt empathy between one person and another diffuses anger and builds relationships. Defensiveness and resistance to admit mistakes creates anger.