Thursday, February 5, 2009
A recent report from the Center for Human Resources at Wharton suggests that deep job cuts at corporations in the US and around the world are not the direct result of the tanking economy, but rather reflect operational and strategic issues that companies have effectively hidden over time. The onion-peeling effect of collapsed capital markets has brought these inefficiencies to light, and companies which reduce workforce in order to meet the next quarterly financial forecast may suffer more in the long run by not incorporating workforce planning into their recovery strategies. The report goes on to state that historically, corporate layoffs have a terrible track record, and contribute to future declines in overall performance.
One insight from this report is that companies may assume that workers are a "just-in-time" resource that can be ramped up in a heartbeat. Let 'em go today, bring 'em back tomorrow. (Curiously, this was a fundamental plank of the UAW business model; amazingly, up until a few weeks ago, idled UAW workers were being paid by the industry for not working.)
Wharton's supposition leads me to believe that those companies which accomodate this approach are actually increasing the chances for future operational issues and inefficiencies. Workers are not like engine parts, which can be manufactured to maintain a just-in-time inventory process. Here's a perfect example: the call center business.
In a call center, bodies-in-chairs is the fundamental objective. This has to be done within budget, while maintaining service levels and quality control. Since most call centers experience a turnover ratio in excess of 20%, managers, in effect, are re-tooling their resources at least 20% of the time. Assuming that new hires require a minimum number of hours (weeks) of product, service, systems, process, and customer management training, managers actually hire ahead of the attrition rate- if they wait for openings to occur, service levels and quality will tank, and both clients, the customer and the company, will lose out. The fact that somewhere around 20-30% of new hires wash out before they even get in the chair adds to the problem.
How do these managers get around this issue? They forecast: hourly call volume, workforce shrinkage, average call length, and a myriad of other factors which occur, including operations and system issues, new product releases, recalls--anything that will cause a customer to pick up the phone and call.
This is an area where companies need to bring more discipline. Their strategic planning may not effectively forecast business conditions for the necessary re-tooling of the workforce. Just as they create a queue heading out the door, they should keep the incoming pipe open, particularly as it relates to quality. Now is the time to pick the market for the best and brightest. Essentially, re-tooling does not necessarily mean just layoffs, and companies which are not currently forecasting to incorporate workforce improvements into their recovery plans will again contribute to the next cycle of inefficiency and workforce reduction.
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Monday, January 26, 2009
In my dubious career I've had a few different vocations. At one time I worked as a laborer doing rehab construction in Philadelphia, in the general vicinity of the Penn campus. A plumber I worked with once told me that there are only two things a plumber has to know, "shit flows downhill, and you get paid on Friday".
He was half-right. It's flowing downhill for sure, if you look at the daily announcements of layoffs by downstream companies in the economy, but nobody's getting paid on Friday except the banks, to whom we have given $350 billion to pad their balance sheets, with no accountability or urgency to track the money trail.
Financials, manufacturers, wholesalers, distributors, suppliers, retailers, services, and all their supply chains have caught the layoff flu, and it appears there is no end in sight. What's a no-job traveler to do?
Yes, it's bad, but consider our numbers today compared to the past. John Campanelli in the Cleveland Plain Dealer points out a few of these in today's edition: 12 month inflation rate in 1980 was 14.6%, in 2008 1.1%; decline in the Dow 1930-1932 was 75%, from 2006 to 2008 18.1%. The one that grabbed me was the percentage of the economy's jobs that were lost: 1980's recession, 3%, this recession, 1.7%.
Now we all know that good statisticians can make the numbers dance, and here's the problem with that last number: what is the denominator of total jobs in the 80's versus today? How many real, living, breathing human beings are out of work? Here's a fact from the Bureau of Labor Statistics: In 2008, payroll employment fell by 2.6 million, the largest annual employment decrease, in absolute terms, since 1945. Remember what happened in 1945? The armed forces discharged a whole lot of employees, and the WWII military/industrial complex tooled down, eliminating jobs in that supply chain. In my opinion, those anomalies negatively skew the 1945 data, making our current situation that much more devastating. It's a different economy, folks, than we've ever encountered before. The house of cards has fallen.
I spoke with a headhunter last week who told me to stop reading the news, and focus on the fact that there is only one job out there: the one I am destined to find. I think I'll take his advice.
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Friday, January 23, 2009
I just finished The Pursuit of Victory, a scholarly biography of Horatio Nelson, Admiral of the British Navy at the turn of the 18th century. By "scholarly" I mean that almost one-third of the book are footnotes and appendices, and just about every sentence is referenced (which I ignored while reading, since if you don't have the source at hand, why bother?).
Nelson won the four greatest sea-battles of his time, defeating the French, Spanish, Dutch, Danes, Russians, and their assorted allies: the battles of St. Vincent, The Nile, Copenhagen, and Trafalgar, where he was killed by French musket fire. He died in 1805. He was adored by the people, loved and honored by his crews, and disliked (sometimes despised) by his peers and superiors, until they actually had a chance to work directly with him.
He was self-promoting, vain, sickly (he contracted malaria as a young lieutenant which plagued him all his life), he lost his arm and an eye in two different defeats, and he was generally vilified for his long affair with Emma Hamilton, the wife of a long-time friend. King George III hated him, and took every opportunity to snub him, yet Nelson was primarily responsible for keeping Napoleon bottled up at sea, despite being outmanned and outgunned.
I'm not suggesting that you read the book unless this sort of history interests you, but there are some important things I took away:
- Nelson was a successful leader because he treated his sailors and officers with respect and discipline. He was obsessive about training, and drilled his crews to fire two shots for the enemy's one, more than making up for the enemy's superior numbers
- He maximized the resources at his disposal.
- He planned his tactics in consultation with his officers, and once the plan was agreed upon, they practiced the plan.
- He delegated authority to his captains, but maintained control.
- His plans were gamechanging and surprised the enemy. Rather than wasting time in maneuvers, he took the battle directly to them, cutting through their line of battle and engaging yardarm to yardarm.
- His courage was legendary; he led by example, and his was often the first ship to engage and board an enemy.
- He rewarded where appropriate, and censured when necessary.
- During peacetimes (there were several), he was a fish out of water. He was a terrible politician, often alienating friends and allies.
- He was easily swayed by flattery, pomp and circumstance, and adorned himself with medals, ribbons, and sometimes ridiculous jewelry, which he displayed as much to irritate his peers as to boost his ego.
- He was arrogant enough to believe that whatever he did was righteous, and often ignored external factors that directly caused defeat or embarassment for the Crown. When he lost, it was always someone else's fault, or out of his control.
- He was compulsive about money. He once declined a peerage because he could not support the requisite lifestyle. He was never rich, nor lucky with money. This dogged him like the malaria.
- He never felt that the ruling parties or the Crown gave him enough credit for his accomplishments, and he was right; much of this was due to his vanity, and his habit of jumping over the chain of command with his demands.
What Nelson really needed was an experienced politician in his retinue who could pilot him through the civilian components of his work. He could have used a chief of staff with talents in communications, project management, building consensus, and managing resources not directly under his jurisdiction. Nelson needed someone to remind him when he was over his head, and when to keep his mouth shut.
So, as I look at opportunity in this market, I will want to ask the questions: what will be required of me from both my strengths and shortcomings; will I have to provide leadership in the embassy as well as from the quarterdeck? Will I have the flexibility and authority to build a strong team with complementary skills and competencies? Will I get the help I need to work through difficult, unfamiliar situations? Will I be given the resources and training to "never mind maneuvers, go right at 'em"? Finally, will I receive adequate rewards and recognition for my efforts?
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Friday, January 16, 2009
I am my own worst enemy, because I am answerable only to myself. Each day I have a plan, either written or in my head, and each day I fail to accomplish what I set out to do. There is always something more important that crops up.
I know from personal experience in managing teams that 40% to 60% of my day will be unplanned, putting out fires with staff, projects, risk management, politics, major crises. To keep this in perspective, I subscribe to the "jumping monkey" theory of work, i.e., monkeys will jump to me from someone else's shoulder: jumping upward from a direct report, sideways from a partner, downward from a boss. I also jump my own monkeys to others, up, down, and sideways. The idea is to make sure the monkey keeps moving, ends up on the right shoulder, and gets fed or disappears. I'm pretty good at keeping those suckers moving, although occasionally I'll glance backward and there sits one I thought had jumped, grinning at my naivete. Sometimes they bite.
But in the no-job travelogue, there are no staff, associates, or executives, just me. I am all three. So, there should be fewer monkeys, right? Not so. My monkeys are all of my own making; most come from fear and uncertainty. They jump from one shoulder to another, and more keep showing up every day, so that it seems there is a troop of Kipling's howlers driving me to the ruins, chanting We are great. We are free. We are wonderful. We are the most wonderful people in all the jungle! We all say so, and so it must be true.
I'll find any excuse not to deal with them: I need a haircut, have to pick up something at the store, must finish that next chapter in the book I'm reading, and I'll get to those monkeys later. Except that later means more of them.
So here is what I have to do: I have to go after the biggest, meanest monkey I have, and get rid of it, while keeping the others at bay. Then, I'll go after the next biggest one, and so on, until the population is manageable and I'm moving forward again in my own direction. That's my plan.
I'll start tomorrow.
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Monday, January 12, 2009
There are few things more important when chefing than careful prep, whether your buyers are one thousand college students, the Governor and his education staff, Tony and Carmelo Soprano, or your co-workers at a Christmas party. I've done them all (except for Tony and his "family", although I did work a short stint at an Italian place on the Black Horse Pike in South Jersey, so I came close), and learned that you had better be ready for anything. In one instance one of new my cooks, Igga, was responsible for cooking the dinner vegetables at the cafeteria. I figured he knew enough to cook four pans of brocccoli, then stage each batch as an empty pan came back from the line. I was on the slicer on the other side of the kitchen, doing the same for top round portions, when I happened to check on his progress. Much to my surprise, he was stretched out on the lower table shelf, sound asleep. Fifteen pans of broccoli sat in the food warmers, quickly turning to mush. He over-prepped. He also shortly found new employment.
Another time I was part of a team producing a ten course hot-cold dinner for a celebrity speaker and a crowd of alumni muckety-mucks. Managers from different locations were brought in to keep things running smoothly. We had bought a case of heavy cream quarts (in thick glass bottles with crimped paper lids, the good stuff) to be whipped just in time for the dessert course. This was assigned to a manager from another location, who dumped the cream into a large floor mixer, added a touch of vanilla, a dash of sugar, and turned the mixer on high. Then he disappeared. Apparently he was pretty well snockered by the time his job came around, and he was off having another wee bit. When the chef came for the whipped cream, he had fifteen pounds of butter staring up at him. The chef motioned for me to follow him into the cooler, where he revealed another case of cream that he had ordered just in case. Dessert was slightly delayed, but the strawberries romanoff were a success.
I guess the point is that when the interview comes, it pays to be ready, but not pat. I've interviewed candidates who wanted things done on their own agenda (like Igga), and candidates who went on and on about the same things, even though the interview had moved on (like the whipped cream). I've also had the pleasure of hiring candidates who had a plan and adjusted on the fly, because they prepared and rehearsed any situation. It's a dialogue, folks. Pretend you're talking to your mother, but make sure you know what you want to say, and when. Do your prep work. Your credibility is at stake.
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Friday, January 9, 2009
According to the New York Times, the nation lost 524,000 jobs in December, capping off a year in which 2.6 million workers were put on the street, for a current unemployment rate of 7.2%. Conversely, that means a 92.7% employment rate, right? Not too bad...
Not really. I think we would all be surprised at the true employment rate (does anyone know where to find this statistic?). The iceberg of unemployment should calculate those who have not filed for benefits, those who are not eligible for benefits, those whose benefits have expired, and those who have given up on the whole thing and are trying to earn piecemeal in the shadow cash economy.
This all makes me begin to feel as though I am part of an organism which is metastasizing while the medical team is looking for a silver bullet.
I'm not sure that those who are still on the job feel any different. They see their employers in the process of selling themselves, snapping up deals, or filing for bankruptcy, and those rumors are deadly for production and efficiency.
So how do we get beyond the negativity and find our way back into the 92.8%?
First, get back to basics. Here is my favorite: there are only two jobs in any company: you are either in Sales, or you support Sales. Decide in which half your talent lies, and create the right angle for your story.
Second, follow a Sales process in building your plan. Here are the components of the Sales process:
Pre-approach: research and target who you want to sell to, and just as importantly, who is in a position to buy.
Approach: Use available contact methodologies to reach the buyer: mail, email, telephone, headhunter, social networking, physical networking to get the interview.
Fact/feeling finding: this starts by leveraging the information uncovered in the pre-approach, and building on that with specifics from a job description. If there is no specific job description (which should include a summary, essential job functions, marginal job functions, required qualifications, required skills and competencies, preferred skills, equipment used, training available, and specific location), be wary- that employer hasn't thought it through. Note that "feeling" is just as critical as "fact". The company feelings will become particularly apparent in a behavior-based interview process, and you can also find this out by communicating with current and past employees, if possible. Line up your features and benefits directly to their needs and feelings. Read between the lines during the interview, and be prepared with a series of probing questions of your own (which cannot be answered with a "yes" or a "no"). In fact, why not turn the tables and ask a few behavior-based questions of your own--"Tell me about a time when your market research played a critical part in a competitive assessment. How did you do your research? What did you discover? How did you use that information to better position your product/service? What was the impact on sales and revenue?"
Close: You are the solution to the company's needs. Their investment in you will provide a return that exceeds their company ROI. How do you find out what the company ROI is? If the company is publicly traded, this is a matter of record. If the company is private, estimate based on your research of public companies in the same general business. How do you calculate your personal ROI? Take the total compensation from your previous job and divide into the revenue or value you claim on your resume: whether you were in Sales or supporting Sales, you must lay a claim to some specific contribution for the work you did. Know your number.
Ask for referred leads: If you land the job, become an inside referral source for your network; if you do not land, ask the prospective employer if he/she is aware of any other opportunities inside or outside the company. Ask them if they will become part of your network, possibly through a LinkedIn or Facebook connection. Note: referred leads bring you back full circle to pre-approach.
As I look at the market, the climate, and prospects, I plan take to heart the motto of General "Vinegar Joe" Stilwell, U.S Army: "Illegitimati non carborundum".
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