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    Entries in workforce (65)

    Monday
    Apr172017

    People, not projects

    In between games of the NBA playoffs this weekend and as I was digging through a couple of weeks of 'saved' items in my Feed reader, (anyone still using feed readers?), I came across a link to a Quora thread aiming to address the question 'What made Xerox PARC, (the legendary reseearch shop in Palo Alto), so special?'

    One of the responses, from Alan Kay, offered eight reasons why PARC (and the earlier ARPA) were so effective, and in reading Kay's observations, I thought the first five were pretty applicable to just about any organization that is faced with the need to remain, (or become) innovative and dynamic.

    The first five points are below, I think they pretty much are self-explanatory, so I will just repeat them here and send you on your way on a sunny Monday:

    There was a vision: “The destiny of computers is to become interactive intellectual amplifiers for everyone in the world pervasively networked worldwide”.

    A few principles:

    1. Visions not goals
    2. Fund people not projects — the scientists find the problems not the funders. So, for many reasons, you have to have the best researchers.
    3. Problem Finding — not just Problem Solving
    4. Milestones not deadlines
    5. It’s “baseball” not “golf” — batting .350 is very good in a high aspiration high risk area. Not getting a hit is not failure but the overhead for getting hits. (As in baseball, an “error” is failing to pull off something that is technically feasible.)

    Really solid stuff, I think.

    Start with a vision, but one that is short, cogent, and easily rallied around by the right people. Then set about giving those right people support and space to execute on that vision. And allow 'misses' from time to time, after all, even the best baseball players fail more than 60% of the time.

    Easy, right?

    But much easier said than done. Probably why we still talk about legendary places like PARC all these years later. They are the unicorn stories we keep having to cling to.

    That's it, I'm out. Have a great week!

    Tuesday
    Mar282017

    Don't assume everyone knows diversity is an issue at your company

    Pop culture fans probably know the name Aaron Sorkin - Oscar and Emmy award winner of movies/shows like "A Few Good Men", "The Newsroom", and "The West Wing", to name just a few. Sorkin has been a successful Hollywood creative type for years, decades even.  A Few Good Men was written in 1992 for a bit of reference.

    So since at least the release of the movie version of A Few Good Men, (late 1992 and  for which Sorkin wrote the screenplay, and is essential cable TV movie watching to this day), Sorkin has been an important, active, and influential Hollywood person. Around long enough to understand how the movie and TV business works, to know scores of company executives, producers, investors, as well as creatives like himself - other writers, actors, and behind the scene professionals.  

    Around long enough, (and making the assumption that he is not some kind of anti-social savant who only emerges from his office once every two years with his latest script), to be aware of one of Hollywood's most pressing, current, and heavily-discussed industry issues. Namely, the past and ongoing challenges for access, opportunity, and reward that have faced people of color, women of every color, and other less-represented groups. Last year's Oscars brought many of these issues to wider exposure with the #OscarsSoWhite controversy and discussion.

    So you would think, or assume, that a Hollywood veteran like Sorkin - experienced, successful, extremely well-known and with a pretty high profile, would have interesting or at least some kind of a view or opinion about Hollywood's ongoing diversity challenges.  You would think he may even have some advice, or a solution to propose. 

    You'd think wrong, apparently.

    According to a report in Variety, and expanded upon in Business Insider,  Sorkin expressed a lack of awareness of the issue, (not a lack of understanding, I am talking simple awareness here), of these issues that was kind of shocking.

    From the Business Insider piece:

    It's really hard to hide from the diversity issue that's plaguing Hollywood, unless apparently you're Aaron Sorkin. 

    The Oscar-winning screenwriter and creator of TV shows like "The West Wing" and "The Newsroom" sounded legitimately shocked when the topic came up while he was onstage at the Writers Guild Festival on Saturday, according to a Variety report of the event.

    While Sorkin looked back on his career and talked about issues of the day with moderator Elvis Mitchell, the topic moved to the need for more diversity in writers' rooms for TV shows. It seemed like Sorkin had genuinely never realized it was an issue in the industry.

    “Are you saying that women and minorities have a more difficult time getting their stuff read than white men and you’re also saying that [white men] get to make mediocre movies and can continue on?” he asked the audience, Variety reported.

    While conversation shifted to other topics, Sorkin still couldn't let go of this new insight.

    “You’re saying that if you are a woman or a person of color, you have to hit it out of the park in order to get another chance?” Sorkin reportedly said.

    Kind of amazing, it seems to me, that an industry vet like Sorkin would have been that unaware or indifferent to an issue which as recently as last year, dominated the discussion surrounding the most important industry event and awards show, a show which Sorkin might even have attended himself.

    But let's assume that was indeed the case, and Sorkin's success over the years, and his position as, well, an older white dude, has kept him pretty insulated from Hollywood's diversity discussion. It's not cool, but it is at least plausible. And if we take these quotes from Sorkin at face value, it seems at least mostly true.

    What do we take away from this, i.e., why should it matter to us and our organizations?

    Because the story reminds us that we can never just assume people with experience, who have been successful in their fields, who are perhaps the leaders in our organization, (and who might, possibly, have a little bit of 'Sorkin' in them), actually are cognizant to the potential diversity and inclusion issues in our companies and in industry more broadly.

    There are probably at least some leaders or influential people (say a hiring manager that hires for a large volume of positions), that might be of the mindset, like Sorkin, for whom these issues are just not a part of their experience and not on their radar as they make people and talent decisions.

    Sure, they may have glanced at your gender and diversity reports on hiring or promotions, but did they really interpret these the way you intended? Are you sure they understand the importance of this issue? Really sure?

    From the Sorkin story we are reminded not to assume the most successful people in the organization are aware of an issue that you think is obvious, that everyone has been talking about, and that you have actually taken proactive steps to address.

    It is probably worth checking on. You might end up as surprised at what you learn, just like our pal Aaron.

    Monday
    Feb062017

    Want a larger piece of the (economic) pie? Look for the most competitive industries

    Caught a really interesting piece over the weekend at The Atlantic looking at one potential reason why (relatively speaking) that worker's or labor's share of GDP is decreasing when compared to 'capital's', i.e. ownership's share. This divergence in share has been thoroughly examined as a primary driver of increasing economic inequality, and was the main subject of Thomas Piketty's influential Capital in the Twenty First Century from 2014.

    Said differently, and much more simply, today in the aggregate is getting a smaller piece of the overall economic pie than in the past. There are tons of data points you can examine on this, but they all more or less show the same thing - on average, workers are no better off today, and might be worse off, than they were 20 or 30 years ago.

    Why The Atlantic piece titled One Reason Workers are Struggling Even When Companies are Doing Well caught my attention is that it shared some insights from a recent NBER research paper on not just that this share divergence is happening, but offered some reasons as to why it is happening.

    And the theory is kind of an interesting one, and if true, can help better inform anyone making career/industry decisions moving forward. Best of all, it is a pretty simple idea that boils down to this - The more concentrated an industry is, (fewer competitors and the ones that dominate are all pretty large), the lower labor's share of the income for that industry will be.

    Here's some color from The Atlantic piece:

    The researchers looked at data from the U.S. Economic Census between 1982 and 2012 for nearly 700 industries in six major sectors, including manufacturing, retail, wholesale, services, finance, and utilities and transportation. Looking at how much the four largest firms in each industry accounted for in terms of total sales in the industry, they found an upward trend in concentration in all of the six sectors, meaning that it was increasingly common that just a few firms accounted for the bulk of sales. Since the U.S. Economic Census reports payroll, input, and employment, the researchers were able to observe a negative correlation between concentration and labor’s share—meaning that this trend of so-called superstar firms tends to mean workers taking home a smaller share of the pie. Moreover, the more concentrated an industry had become, the larger the decline in labor’s share.

    Unpack that a little bit to show a pretty straightforward formula:

    Industries have tended to consolidate over time --> the more dominant the four largest firms in an industry become --> then decreasing shares of the overall industry profits find their way to workers/labor.

    There are a couple of reasons on offer for why more consolidated, big-firm dominated industries are getting worse in terms of share of profits for workers. One is that these companies are simply growing revenues at a faster pace, and labor costs just have not (or do not need to) keep pace. Another is that modern, transparent business practices make it easier for consumers to find and reward the 'best' companies, which drives out competition in the industry faster than before - and reduces the potential number of firms competing for workers.

    The takeaways for the average employee?

    Probably that it might pay, (no pun intended), to keep on eye on the relative levels of competition in your industry, particularly if you are in a role that feels industry-specific. If your industry has seen consolidation with weaker competitors being driven out of business (or being acquired), the trends suggest a shrinking percentage of profits will find their way to you and your colleagues.  

    You might be better off thinking about an industry that seems to have more, and more even competition, where the market share, (and to some extent the demand for labor), is not being controlled by two or three big companies. And one where the threat of competition for your skills can either score you a better offer somewhere else, or give you more leverage and power in your next compensation negotiation with your current shop.

    More options might not be better for the owners of your company, but they might be much, much better for you.

    Have a great week!

    Wednesday
    Jan112017

    CHART OF THE DAY: People are quitting faster than you can fire them

    Do you know what the best day of the month is for workforce trends and labor market geeks is?

    Of course you do - when the monthly JOLTS (Job Openings and Labor Turnover Survey) report is released by the Bureau of Labor Statistics!

    That great day was yesterday, and in what has become a semi-regular feature on the blog over the years, I want to share just one chart from the latest JOLTS report, and as you DEMAND, offer some free (cheap!) comments on the data.

    First the chart - this one showing the amount of 'Quits', (voluntary separations), vs. the level of  'Layoffs and Discharges' (non-voluntary turnover), for the US labor force.

    Some quick takes from the 'Take this job and you know what with it!' vs. the 'Clean out your locker and scram' trends:

    1. Consistent with the longer term and pre-recession trends, 'Quits' are now exceeding 'Layoffs' by about a 2/1 ratio. Back in 2006, you could expect 2 folks to quit for every 1 who you had to fire (or layoff). Halfway into the last recession, (and for some time after), Layoffs surpassed Quits, as no one in their right mind wanted to quit their job with the chances of finding another one being so dicey.

    2. Obvs, the return to a more 'normal' and historical 2/1 Quits/Layoffs ratio puts much more pressure on HR,  recruiters, business leaders - essentially anyone whose job depends on having the needed people in place, and not looking to leave for the next, better opportunity at the drop of a hat. The same drivers that are making the Quits rate climb, (perceived labor market leverage, lots of openings across the country, rising wages), also tend to depress the 'layoff/discharge' rates. Do you really want to can that marginal performer if you are not at all sure you can find a better replacement in a timely manner?

    3. Finally, what might be the most valuable take away from looking at the overall labor market Quits/Discharges ratio is that it (should) force us to think about this ratio in our own organizations, and what we think might be the optimal or healthy ratio for us. We probably would rather exist in a world where there were not all that many quits and certainly not all that many firings or layoffs. But that ideal world rarely exists, and even if it did, would it be perfect?

    Said differently, there probably should be some tension and some churn in our organizations. The system/culture/workplace should weed out some folks who will self-select out. There should be some really talented folks that end up having/choosing to leave to chase some bigger dreams and goals that you might not be able to offer them the opportunity. And there should be some folks that you force out. The key may not be the absolute numbers of any of these categories, but the way these groups compare. If you are being forced to forcibly remove more folks that leave on their own accord, then you have a problem I would imagine.  And if no one ever decides to leave on their own, you have a problem as well, albeit a different one.

    Ok, that's it from me. Enjoy the JOLTS report like I know you will!

    Monday
    Dec122016

    CHART OF THE DAY: Manufacturing Output and Employment

    I am sure you have seen something in the news about President-Elect Trump's negotiations with the United Technologies owned Carrier Corp to eliminate or at least reduce Carrier's plans to close and/or reduce manufacturing operations in Indiana, and shift production, (and create jobs), in Mexico.  After a bunch of back and forth, (and back and forth), and some finger pointing from both sides, it does appear that Trump's efforts will at least for the time being, keep some of these operations and jobs in the USA.

    I don't really want to get into the politics part of this story, but rather want to present some data (from the fantastic St. Louis Fed FRED site), that reminds us that companies packing up and moving manufacturing operations from the US to other, less-expensive places is only part of the reason why US manufacturing jobs continue to be pressured. 

    Here's the data showing US manufacturing output, (left axis, and indexed to 2009) and US manufacturing employment (right axis) - then some FREE comments from me after the data.

    Apologies if some of the fine details of the chart are a little hard to read, but the key things I think to take away from this data are these:

    1. Manufacturing employment has been on a steady downward trend since 1980s, with the steepest declines starting in around 2001 (which coincides with an increase in offshoring activity to China and other places); and then again during the financial crisis and recession of 2008. But with the exception of recession-driven dips, manufacturing output has been increasing since the 1980s and is now near its pre-financial crisis level.

    In other words, US manufacturers have continued to increase output, and pretty dramatically post-recession, while employing fewer workers.

    2. So while outsourcing and offshoring are at least partially to 'blame' for the loss of US manufacturing jobs, those causes can't be the only or even probably the primary driver of manufacturing job loss. Increasing output, with fewer workers means one thing - improvements in manufacturing productivity that have to be attributed to technology, automation, robots, etc. US (and global) manufacturers are simply getting better and more efficient at producing goods, particularly electronics, cars, even steel. Technology gains will continue pressure organizations to 'keep up' with competitors and seek to reduce labor costs via automation.

    3. While Mr. Trump's efforts with Carrier probably should be commended, we also should not be beguiled that these kinds of one-off decisions are likely to cause any kind of meaningful or lasting turnaround in the long-term trend of manufacturing job declines. As fast as a thousand ot two jobs might be saved by the application of political pressure, it is also extremely probable that technology/automation will jump in to ratchet up the continued pressure on manufacturers to get even more productive.

    Finally, maybe it is time that we start to look a little differently about manufacturing jobs as somehow 'better' or more desirable than other types of jobs. There will always be manufacturing in the US, but as these trends show, it will almost certainly continue to decline as a percentage of the labor force.

    Technology-driven shifts in aggregate employment just happen. How many farmers do you know, if you get my meaning. We have to learn as a country and as individuals, to adapt.

    Have a great week!