Stability equals strength

Strong organizations tend to have stability in revenue, profits, employment, benefits and other factors over time. Variability in revenue or profits in the public sector generally creates wide swings in a stock’s market price. Swings in the price of a stock, in comparison to the overall market, causes the stock to be considered more risky.

When a financial institution sees wide swings in the cash flow of a business, it is much less likely to loan the business money and will generally demand better collateral or higher interest to compensate for the greater risk.

Employees want a level of security in regards to their pay, benefits and employment. Constant adjustments in pay, benefits, working conditions and staffing levels will foster uncertainty and a much less productive work force.

One of the great benefits of private enterprise is the ability of management and ownership to keep wages, benefits and employment stable during trying economic times.

Large corporations have in part created the reputation of not caring for their employees because of their ease in cutting wages, benefits and employees during downturns. Such practices lead to poor attitudes and a much less success-oriented work environment.

Business owners who work with their employees over time tend to outlast those who are quick to cut when times get tough.

Mohr is president and CEO of Dacotah Paper Company, a 100-year-old Fargo-based business. He writes occasional articles for the Federal Reserve bank, has authored several books and is a self-avowed angel investor. Mohr can be reached at mmohr@dacotahpaper.com.

Tags: business advice, mohr