By Thomas R. Schori, Ph.D., and Michael L. Garee, Principals, Millennium Marketing Research, 808 E. Ironwood, Normal, IL 61761-5239. Tel. 309-532-8466 -
In our considerable experience, it appears to us that lots of folks having responsibility for providing their organizations with strategic direction pay little or no attention to an excellent source of information¾the Statistical Abstract of the United States. A major oversight on their part!
What is the Statistical Abstract of the United States? Simply put, it is a compilation of trends (population, health, business, etc.) which the federal government (under the auspices of the Census Bureau) has been compiling since nearly the inception of the Republic. Each year, it is updated and published in hard copy for a very reasonable price, about $50. It is now also available on CD-ROM. [Available from the U.S. Government Printing Office, Washington, D.C.]
We’re hardly the only ones who have paid attention to the Statistical Abstract over the years. One General Robert E. Wood also paid considerable attention to the publication.
Gen. Wood was the U.S. Army quartermaster general who was given the charge of completing the Panama Canal, after work on it had been stopped for years. General Wood got the job done, partly because of a revolutionary concept he developed. He had noticed that construction materials shipped into the Canal Zone were quickly rendered useless by rain and humidity. Having to constantly have replacement materials shipped in both greatly slowed the construction process and raised the price tag. Not being able to change the Canal Zone's ambient environment, he changed the way in which construction materials were delivered. He required vendors to deliver materials just before they were needed. Consequently, the materials were used in constructing the canal before the Canal Zone's moist environment could render them useless. Thus, to help in completing construction of the Panama Canal, General Wood developed the concept of "just in time delivery." (This concept was later "invented" again by the Japanese industrialists.)
No, the Statistical Abstract didn’t help Gen. Wood complete construction of the Panama Canal. However, each night as he lay in his bed, he’d spend an hour or two reading the Abstract, trying to decipher the practical implications of the trends it depicted. As a result of this practice, he was well prepared for the business challenges that awaited him when he retired from the Army.
Upon retirement, he first joined Montgomery Ward in a role which would allow him to take advantage of his military background in logistics. He also remained fascinated by the Statistical Abstract and continued to pour over it every night. To him, some of the depicted trends implied strategic opportunities for Montgomery Ward. Wood, however, was unable to convince his boss, the CEO, of the wisdom of acting upon those strategic opportunities. So he left Montgomery Ward to joins Sears, where shortly thereafter he became CEO.
In the Statistical Abstract, General Wood noted that, though the rural population greatly exceeded the urban, the urban population was trending upward and the rural downward. To him, this was a signal that Sears should begin paying attention to the urban population, which they had heretofore all but ignored. So Sears did, and it proved to be the right thing to do.
The trend in automobile ownership also intrigued him. As he saw it, the increasing ownership of automobiles would make downtown store locations less important because people could drive to more remote locations. Therefore, he recommended that Sears start building larger stores on the edges of town with lots of parking space. In those days, shopping was mostly done by women; driving was mainly done by men. Wood realized that to get the women to the Sears stores located on the edge of town, their husbands would therefore have to drive them. And, that’s a principal reason why tools originally became (and remain) a mainstay at Sears¾to make trips to Sears attractive to men, so that they would drive their women to the store.
Gen. Wood’s nightly reading of the Statistical Abstract also led Sears to create Allstate Insurance Company (which was, and remains, very successful) and to sell a Sears’ branded automobile. Obviously, the Sears branded auto venture was not successful, since it was only around for a couple years in the ‘40s. Of course, one can only see trends in the Statistical Abstract, not how to successfully take advantage of them.
While General Wood’s usage of the Statistical Abstract certainly are much more prominent then ours, we'll mention what we consider a couple of recent useful applications:
A couple years ago, one of our senior consulting partners was invited to give a presentation at a health care research conference in Jackson Hole, Wyoming. Being a skiing enthusiast (but not knowledgeable in health care research), he replied in the affirmative. Since, at that time, he was employed by an insurance company, he thought that his access to insurance industry data and publications would provide him with ample information on which to base an original presentation, so he set about acquiring the necessary materials. But he also decided to check the Statistical Abstract, just in case it portrayed any trends which he might also want to include in his presentation. As it turned out, the only information source he used to create the presentation was the Statistical Abstract of the United States, since the information contained therein was more comprehensive than that found in all of the proprietary insurance industry data and reports! Not only was that presentation published in the conference’s proceedings, a slightly more polished version was published in the scientific literature last year. [T.R. Schori. "Health Care Trends: Holding the Line on Costs." Psychological Reports, 1996.]
Recently, we received a call from an insurance industry executive asking whether we knew how many individual life insurance policies were sold per 100 American households. He had done an extensive search for that information, but had been unable to find it. Remembering that we had provided him with that information in the past, he called us. Of course, to the best of our knowledge, we’re the only ones who had ever looked at life insurance sales in that fashion. And, we’d acquired the necessary components of that information, i.e., households, poverty levels, and life insurance policies sold, from where else but the Statistical Abstract!
The Statistical Abstract of the United States¾a bargain at 10 times its current price! No, make that 100 times its current price.