As the mechanics worked to put the planes back into fighting shape for the next day, they eventually started to “reinforce” the planes in those areas where they would typically see damage. The mechanics reasoned that while adding the extra weight of the reinforcement material would sacrifice a little range and maneuverability, it would make the planes safer, and would lead to fewer repairs next time.

Not knowing the original source of the story, I hope it is a fable, since the “real lesson” to be learned from the bullet holes is the exact opposite of what the conventional wisdom was.  The only bullet damage the mechanics ever saw was the non-lethal kind, so by definition, the mechanics should have been more concerned with reinforcing those parts of the plane where they had never seen damage.

Taken a step further, since reducing combat flight casualties was at least in part dependent on better dog-fighting, then the added weight of the plane modifications might have actually made the problems worse.

The story is instructive in many ways – it illustrates the danger of relying on certain types of “common sense” and more broadly it illustrates the inherent limitations of internal data collection. For companies with performance problems for example, often the best source of feedback aren’t your customers at all, but rather those who should be your customers but aren’t. Then again, customer feedback is a “leading indicator” and most companies tend to define performance problems in terms of lagging indicators like revenue or net income.

The airplane example is representative of a greater lesson of WWI – as the first large-scale conflict of the industrial age, it illustrated in gruesome and tragic fashion how competitive strategy and tactics that had served for generations could be rendered instantly, and irrevocably obsolete by the new technologies of the ererging industrial age.

The increasing interest that middle-market companies are showing in all things strategic reminds me that as we move farther along in this transition to the information age, executives are quickly realizing that the tactical views that have served them well in the past are not just outdated, they might even be dangerous.

As marketers from a number of agriculture-related industries have been aware for several years, not all baby-boomers are moving their empty nests to the beach, golf community or urban downtown. A noticeable number are embracing the “ruralpolitan” lifestyle and moving to the country.

According to Farm Industry News, ruralpolitans are “a fast-growing group of farmers with either single or double incomes derived off the farm. This group represents a whopping 47% of all U.S. farm households. A typical double-income ruralpolitan earns an income of about $85,000 a year but posts about a $3,000 loss on the farm.”

From the perspective of ag-related marketers, a big increase in the number of wealthy, high income, non-bottom line focused farmers must seem like a morphing of Green Acres and The Twilight Zone…but in a good way. A closer look at the numbers suggests that there may be generational plot device at work, with the Baby Boomer generation playing the rural-loving Oliver Douglas while Generations X & Y seem more likely to embrace Lisa Douglas’ Park Avenue point of view.

Setting aside the Green Acres cultural impact for a moment, it would seem reasonable that having some background or exposure to rural life is positively influential if not predictive of adults looking to live, but not work in the country. If that is true, then Generations X & Y will likely be heading back to the country in much smaller numbers a generation from now.

Statistically speaking, Baby Boomers were 7 times more likely to be exposed to life on a farm than their Gen Y counterparts. A Lafayette Associates analysis of US Census data shows that while more than 1 in 3 Baby Boomers born in 1950 were born into a rural farm family or had grandparents on a farm, for a Generation X’er born in 1970 that ratio had grown to nearly 1 in 7. For a Gen Y’er born in 1990 that ratio had grown to more than 1 in 21, seven times what it was for Baby Boomers.

Absent stronger research about consumer preferences for choosing a ruralpolitan lifestyle, the many middle-market companies that serve agricultural sectors will need to be highly circumspect about future growth forecasts. For today’s ag-marketers, these ruralpolitan Baby Boomers are indeed booming. But like so many other markets that have remade themselves to suite Baby Boomers’ tastes, the Boomers inevitably move on, and growth falls with a thud. Given the significant differences in exposure to rural life between these three generational groups, for today’s ag-marketers, the “post-Boomer thud” may be louder and come quicker than most. Meanwhile, “make hay while the sun shines.”

]]> http://lafayetteassociates.com/blog/2006/10/29/down-on-the-farm-%e2%80%93-ruralpolitan-baby-boomers-may-be-a-long-term-bust/feed/ 0 http://lafayetteassociates.com/blog/2006/10/25/5/ http://lafayetteassociates.com/blog/2006/10/25/5/#comments Wed, 25 Oct 2006 11:48:37 +0000 mconcannon http://lafayetteassociates.com/blog/2006/11/14/5/ Given that the population is not growing fast (see our October 18 post), historically speaking, the very high levels of immigration we have seen over the past 10 years would represent a significant change in the composition of our population.

Putting a few data points on some obvious issues – Hispanics now constitute the largest minority in the US with 14% – edging out Blacks with 13% of the population. Asians, by comparison represent just fewer than 5% of the population.

In the near term, Hispanics will continue to represent a growing share of the population – their growth rate in 2004 was 3.04, more than 3 times the US average. It is remarkable that Hispanics accounted for 50% of the US population growth from 2003-04.

On a final point about drivers of population growth, while it is true that overall birth rates are at historic lows, that is due to a very low rate for the white population. As with most other trends, minorities in general, and Hispanics in particular are showing much higher than average growth rates.

Putting aside the question of illegal immigration for a moment (which is difficult to do), hard data indicate that there is as large a realignment in the composition of the US population going on now than at any time in the past 100 years. These fundamental shifts in demographic characteristics play out along multiple dimensions: cultural, economic and social being just a few.

The implications of these current trends are many, but from a business point of view, US marketers will increasingly look at the US consumer base and see an increasingly fragmented landscape. Where many markets were able to look at the Baby Boom generation and see, for example, 10 segments of 7 million consumers – today’s marketer will look at the Generations X and Y and see 70 groups of 1 million.

While I find no quick easy takeaways from these current trends, I am encouraged by the idea that the nature of scale economies might be changing, in the US market in particular.

The simple facts are, the US population was estimated at about 296.5 million in 2005 and has been growing at just over 1% per year since 1990 (US Census Data, Lafayette Associates Analysis). To be sure the current population growth rate is on a strong up-trend, having risen in each of the past 19 years. In 2006, the population is expected to grow 1.23%, which would be the highest rate since 1971.

Putting that rate in a historical context, however, reveals that since 1900, the US population has grown 1.27% on average, so the 2006 rate would again seem to be unremarkable. And while it may be a stretch to compare our current situation with the turn of the 20^th century, as recently as the Baby Boom birth years of the late 1950’s, those rates were about 1.7%.

Now for some of the complexities: In the case of US population growth in 2006, one might expect that all-time lows in the birth and death rates would yield a lower than average overall growth rate. That the rate was average is an indication of how the other driver of population growth – immigration – is making up the difference. Given that the population is not growing fast, historically speaking, the very high levels of immigration we have seen over the past 10 years would represent a significant change in the composition of our population.