We Can’t Legislate Job Skills

“Why can’t we find enough good people to hire?”

As a consultant to business leaders, I hear this complaint with increasing frequency. From  tradesmen to programmers, and from executives to scientists, we seem to be lacking a workforce with the skills and work ethic that businesses seek.

The Federal Reserve Bank is the only central bank with a dual mission to control both inflation and unemployment. An official from the Fed recently told me that we are presently experiencing a historically high rate of long-term unemployment, simultaneous with the highest number of help wanted advertisements in history. That seems to make no sense.

Self-serving political announcements praise the pace of job creation since the Great Recession, but the numbers are deceiving. The U-3, or “official” unemployment rate, counts anyone who works one hour a week as employed, and ignores those who have given up trying to find a job. The Federal Bureau of Labor Statistics also publishes what is designated the U-6 unemployment rate. Unlike the U-3, it includes those who work part-time but would prefer a full time job, and those who have given up looking but say they would take a job if it was offered. That number still stands at over 11% of the workforce. More than one in ten American workers, or around 15,000,000 people, can’t find a job that supports them satisfactorily.

So why are employers complaining? Has the quality of jobs declined, or are workers less able? The answer is a qualified “yes” to both.

The American middle class has been shrinking for the last 20 years. According to economists, technology is the culprit both here and throughout all of the developed economies. Robots on assembly lines, electronic outreach instead of face-to-face sales calls, and a general thinning of middle management ranks all act as cruel Darwinism. If you don’t have the new skills needed to move up the socioeconomic food chain, you move down. Standing pat for your entire career is no longer an option.

career ladderWhile those who lack the skills to follow the better paying jobs find their lifestyles suffering, employers are desperately searching for employees with the qualifications to fill positions higher on the ladder. Scientists, engineers, accountants and skilled leaders of all kinds are in short supply. Too many of them are part of the retiring over-50 Boomer generation, and the educational system isn’t backfilling the gap.

The employers’ logical answer has been to continue replacing duplicable skills with computers, so they are able to pay even more to those employees who can demand it. Wealth transfer taxes to shore up the middle class don’t really address the underlying problem. In the long run, no legislation has ever defeated the law of supply and demand.

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Posted in Business Perspectives, Economic Trends, John's Opinions, Managing Employees, Politics and Regulation, Strategy and Planning | Tagged , , , , , , , , , , , , | 5 Comments

5 Responses to We Can’t Legislate Job Skills

  1. Great article. I agree that the numbers have to be skewed that government is reporting. And I believe our Govt. is the biggest problem. Our Unemployment laws need to be seriously revised. If someone works and then gets seriously sick or injured, it makes sense to help them with unemployment for a longer period of time, because they earned it. We need to address the younger people. We have two MAJOR issues:
    1. Is the fault of our society and their parents — this younger working age generation are spoiled rotten and suffering from a severe case of ENTITLEMENT. I see it every day. Why should they work hard, or even show up to work, when Daddy just bought them a new car, and pays for everything.
    2. It is way too easy to file and collect unemployment, and it lasts too long. I post an ad on Craigslist at least once a month. The amount of responses is usually pretty good. However, I’m lucky if 1 in 6 scheduled interviews even show up. And even then, they usually don’t ever show for the job I hired them for. And I know what their doing — they’re checking off the box that they’re “looking, but can’t find anything” so they can continue receiving unemployment. I can vouch that there are more jobs than people, but it sure doesn’t seem that way.

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  3. Nor can we legislate respect, work ethic, self-motivation and personal responsibility. Recently read an article stating we are who we are by the age of 12. Parents are the key to improving the workforce, not the school, government or the day care provider. Children are not possessions like cares or houses. They are a lifetime commitment and one’s enduring legacy of their contribution to society.

  4. Great Article. A subject that is close to my heart, and as a matter of fact, is what made this country so great..in the first place..” The Middle Class”. Where is the middle class, did they just disapear, and the jobs that went with them disapear as well. Is the new generation so spoiled, that they refuse to work? Does it make more finacial sense to go on longterm unemployment, wellfare or disability, than to get a JOB?

    The wriing in already on the wall, just look at the numbers. Who’s fault is it…you might ask….An even better question is how do we FIX it.

    • John F. Dini says:

      The fix is complex and long-term. I see no signs that the entitled class will go away, since their parents are leaving them something like 15 trillion dollars. For many, that points to another generation to follow of kids who never had to scratch to make it. They may look up one day and find that they’ve been passed over. Those who wake up and follow market needs (STEM, trades, non-legal mid-market professionals) will be the new middle class regardless of their socioeconomic background.

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Why Do We Hate Salespeople?

A recent episode of “Downton Abbey” included a new servant tasked with passing out canapés at a dinner party. “Try one of these,” he quietly suggested to a guest. “I’m told they are quite good.”

He was immediately pulled aside by the Head Butler and chastised. “What are you doing?” the butler exclaimed. “You are a footman, not a salesman!”

Why does the profession of sales generate such an emotional response? I know many business owners who loathe their own salespeople, and regard managing them as a necessary evil. Executive assistants are commonly charged with “Don’t let any salespeople get through to me.” Top-notch customer service and technical employees wither at the thought of combining selling with their support functions.

College surveys asking students about their career preferences don’t even list sales as a choice. That isn’t too surprising. First, direct face-to-face salespeople only account for about 1.5% of the labor force. Second, few young people studying history, philosophy or psychology understand the odds against those degrees providing them with a comfortable living. (And the higher education system has no interest in waking them up, but more on that another time.) Some of those will drift into sales simply because it offers a bigger paycheck than they can earn otherwise. A few will discover that they like it.

As I describe in Hunting in a Farmer’s World, salespeople are hunters in a business culture dominated by farmers. They are linear, driven by goals, vastly preferring forward movement over introspective analysis and bored by process and repetition. They can also be a pain in the ass.

water coolerI picture the tribe of 10,000 years ago. The hunters have brought in a large kill. While the rest of the tribe labors to skin, preserve and cook the game, the hunters stand around the common fire (probably drinking some precursor to latte with an espresso shot) and tell each other what a terrific job they did. The skinners and cooks fume at the hunters’ idleness. They go out and kill a Wooly Mammoth, and they think they’ve done all they need to. They probably won’t do a damn thing until they have to go kill another one.

But despite their resentment, the rest of the tribe knows that the hunters make sure everyone else gets fed. They have a need, and the hunters fill it.

The best salespeople are focused on serving a customer’s need. They are problem solvers. They are the client’s representative inside the company, pushing for new products and services that they can sell. They are practical quality control, sounding the alarm when company offerings don’t meet the brand promise. They are street level R&D and competitive intelligence.

I think the problem lies in their behavior around the campfire. Top performers need recognition, and that often appears the same whether their “outside” persona is driven by genuine concern for customer benefit, or by self-serving “line ‘em up and knock ‘em down” pursuit of personal income over relationships.

As a business owner, your job is to understand that outside persona. Salespeople will probably always rub their coworkers the wrong way. The important thing is to look beyond their results, and know whether they are presenting your business in a way you can be proud of.

A Note to My Readers

This January marks the start of my seventh full year of writing Awake at 2 o’clock on a weekly basis. Many thanks to the hundreds of you who have commented, and who come up to me at speaking events and say “I’ve been reading your blog for years.” If you read regularly and find yourself nodding in agreement or quoting a column, then I feel that I’m doing my job.

I’m thrilled that I touch so many people, but would always like to reach more. Please help by taking a few minutes to pass along a link to any business owners or advisors that you think might also enjoy an owner’s point of view.

Thank you

If you would like a printable pdf of this column or any other, please let me know at jdini@mpninc.com.

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Posted in Customer Relations, Entrepreneurship, Incentives, Leadership, Managing Employees, Marketing and Sales, Sales | Tagged , , , , , , , , , , , | 3 Comments

3 Responses to Why Do We Hate Salespeople?

  1. John H. says:

    If salespeople are hunters in a business culture dominated by farmers, why do I hate being interrupted by ill-prepared, gum chewing, robo-call driven telemarketers? I have managed several very successful sales teams, even started my career in a sales capacity. On a DISC chart I am shown to be a blend of task oriented and influencing. And I am the rainmaker in my own company today, successfully closing introverts and extroverts alike.

    People hate salespeople because (1) most of them really stink at their profession, and (2) the craft is deemed something anyone can do.Don’t believe me? Name the one university in the entire USA that offers a degree program in Sales. Can’t, can you?

    Our nation’s corporations and privately owned businesses all depend on sales people. Every mobile phone store, every insurance agency, every capital goods manufacturer… there are literally tens of thousands of sales positions through out the country. But few of them provide any real or substantive training and fewer still put quality over quantity. And most play the numbers game.

    The real answer- there is simply no alignment between the decision maker’s preference of behavior and the cold call that too many companies still reply on. Cold calling (not so affectionately known as interruptive selling in my office) dates back to a time when the telephone was new and novel, and product or service information was harder to obtain. Add to this today people have to do more with fewer resources (fewer people) and trying to pitch them while they are under a deadline makes little sense.

    Even less if you are unprofessional and ill-prepared.

    At the risk of appearing to steal your blog, here is an article I wrote some time ago, and believe to be accurate today. http://zenmarketinginc.com/just-effective-cold-calling-anyway/

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  3. Neil Arthur says:

    John H: as a career salesperson / sales manager / CEO leader I could not agree with your more. Preparation for ‘making the sale’ is sorely lacking in just about every industry. I thought you might like to know that at least one public university does offer sales degrees, http://www.utoledo.edu/business/ESSPS/. I believe I have heard of others. Can’t vouch for any of them but that they exist is a good sign for raising the bar.

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Investing in Your Own Business: Will It Pay Off?

A few months ago a business owner asked me to evaluate an acquisition offer for his small business. It was from a larger company headquartered in a different region of the country. They had a branch operation in his city, and wanted to expand their presence by combining it with his.

For an opening offer, the deal seemed very reasonable to me. The purchase price was about four times EBITDA, with half in cash and half with interest over the next three years, and without any conditions attached. (note: That doesn’t mean conditions wouldn’t have come later.) He would receive a three-year employment agreement at a higher salary than he currently paid himself, with additional bonuses for growing the business plus all the benefits he currently enjoyed.

He was unhappy with my assessment, and announced his intention to counter-offer for double the proposed purchase price, with a perpetual employment agreement that would allow him to work for as long as he chose.

While any opening offer is subject to negotiation, I expressed my doubts about attaining a public-company or strategic-level multiple, especially when accompanied by an employment agreement that would make any labor attorney flip out. I asked him how he planned to justify his asking price.

empty wallet“It just isn’t enough to retire,” he said. “I’d have to keep working indefinitely, and I don’t want to have to go find another job if this doesn’t pan out.”

Please understand; presenting this story in the abbreviated way that I have makes this owner sound like he is clueless or ignorant. Neither is the case. He has run this business for years, and built it to several times the revenue and profitability of when he acquired it. He has sacrificed personally, putting in long hours and scrimping financially to reinvest in his company. He  qualifies as a successful small business owner by most measurements of small business success.

But as a mid-generation Boomer (late 50s) he is coming to the realization that it may not be enough. Like many others, he decided that investing in his own business was more controllable and would produce a higher return than the vagaries of stock markets and  mutual funds. His business is his retirement account, and like hundreds of thousands of others, he eventually came to believe his own claim. He expected his company to fund his retirement, without really looking at its objective value in the marketplace.

I asked him if doubling the price would achieve his retirement goal. He thought for a moment, and said “I don’t know, but I doubt it.”

There are roughly 5,500,000 Baby Boomer business owners entering, or already well into, their retirement windows. (The oldest Boomers turn 70 this year.) Many have the expectation that their company is their retirement plan, but there is no assurance that it’s true. If you are over 50 years old, I strongly recommend that you do three things:

  1. Download and read my eBook “Beating the Boomer Bust.” It’s a collection of ten blog posts  from this site with an overview of the challenges that are inevitable with the wave of retiring Boomer exits.. It’s short (45 pages) and its free.
  2. Get an objective valuation for your business. You don’t need a full appraisal. An opinion of value can range from free to a few thousand dollars, but it shouldn’t cost more than that. (You pretty much get what you pay for, though.) It is critical to understand where you are today.
  3. Get a realistic projection for how much you will need to maintain your target lifestyle in retirement. A Certified Financial Planner (CFP®) has the training and software to include inflation and tax assumptions. Again, many insurance agents and stockbrokers will provide this for free, but I prefer someone who does it without offering products for sale based on the result.

Disclosure: I offer exit consulting for business owners, but I do not provide valuation services, financial planning, wealth management, tax guidance or insurance. I’m just trying to have fewer conversations like the one above. Additional information, including a free, online self-assessment of your business, is at http://exitmap.com.

 

 A Note to My Readers

This January marks the start of my seventh full year of writing Awake at 2 o’clock on a weekly basis. I got serious with the publishing of “The Strategic Triple Threat” in January of 2009, which will probably stand forever as my most accurate piece of economic prognostication. :-)

Many thanks to the hundreds of you who have commented, and who come up to me at speaking events and say “I’ve been reading your blog for years.” If you read regularly and find yourself nodding in agreement or quoting a column, then I feel that I’m doing my job.

It’s a big, wide Internet out there. Like any blogger, I’m thrilled that I touch so many people with helpful information, but would always like to reach more. Please help by taking a few minutes to pass along a link to any business owners or advisors that you think might also enjoy an owner’s point of view.

Thank you

If you would like a printable pdf of this column or any other, please let me know at jdini@mpninc.com.

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Posted in Business Perspectives, Economic Trends, Entrepreneurship, Exit Planning, Selling a business, Strategy and Planning | Tagged , , , , , , , , , , , | 1 Comment

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How to Get Employee Buy-In for Your Values

There are few things more important than determining your company’s core values. I define an ideal core values statement as something you can frame and put on the wall so that, in your absence, any employee who has a question about how to handle a business relationship can read it and know the behavior that’s expected .

Like mission and vision statements, many business owners create a core values statement because “We have to have one.” This is largely a waste of time. Unless your core values are defined in a way that makes sense to customers and employees, they won’t get much attention.

Letting employees participate in the creation of core value statements helps make them “real” throughout the organization. The problem is, few of us think creatively when asked to develop something on the spot. The result tends to be something like “We believe in doing our best to provide the highest quality product, with integrity, compassion and excellent service.” (YAWN)

What does that mean? More importantly, what does it mean to other people? Defining core values that are clear to everyone isn’t easy, but getting there can be fairly simple.

Mission to MarsI’ve used the “Mission to Mars” scenario for over a decade. The exercise was created in its original form by Jim Collins, and was reprised by Verne Harnish in Mastering the Rockefeller Habits. It is a quick and simple way to define the core values of an organization in a very short time, and without the usual tortuous wording that goes with developing a “Values Statement.”

It can be done at any level of the company. In fact, doing it at different levels can often lead to some illumination about what people with differing levels of responsibility think drives the organization.

The whole exercise can take as little as 30 minutes, and should not go more than about an hour. Here is the process that I use. It differs a bit from both Collin’s original (simple, but longer to do) and Harnish’s, but it is very effective. I’ve never had a group unhappy with the result.

1. Setting The Scenario

The first step is to gather 5-9 people (more than that can be a challenge) together for the Mission to Mars. Obviously, they should generally be people whom you feel have values that you embrace, and who are influential in the company. Here’s the setup:

“We have discovered life on Mars. With great difficulty, the Martians have communicated a desire to better understand Earthlings, so we are assembling a mission for that purpose. Our company has been picked as one of the representative groups.”

“Martians do not speak or read any Earth language. You must pick 5 of our employees to go on the mission who, simply by allowing the Martians to observe them perform their current daily duties, will best epitomize the values (not the operational skills) of our company.”

2. Picking the Crew

No one in the group is eligible to go. All the mission participants must be chosen from other employees who are not in the room. As a person is nominated, get general acceptance that he or she is a viable candidate, and then list the behaviors that will illustrate that person’s work values to the Martians. It is better to discuss behaviors, as values can get caught up in definitional or semantic arguments.

Put the employee’s name on an easel pad or whiteboard, listing the behaviors underneath that make him or her a good representative. It’s usually easy to come up with 7 to 10 behaviors. Often a behavior will be suggested, and someone will say “That applies to (name of someone listed previously) as well!” Put it all up there.

Typical behaviors include things like integrity, work ethic, positive attitude, customer focus, commitment to quality, attention to detail, creativity, problem solving, team first attitude, willing to pitch in, dependability, etc. Don’t worry if different people have similar but not identical behaviors listed. You’ll fix that later.

3. Defining the Behaviors

Once you have agreed on 5 employees, the moderator says “Uh-oh! Word has just come from Mission Control that we only have room for 3 people. Which two will stay behind?” (It goes without saying that the two selected should less strongly typify the values, and aren’t picked just because their supervisors will miss them!)

Cutting from 5 to 3 isn’t strictly necessary, but I’ve found that it reduces duplication and the time needed to assemble the final values list. I don’t recall the three “survivors” ever being the same as the first three people who were nominated.

Start a new column for the combined behaviors. This is the time to merge those that are similar, rather than trying to force consistency in the preceding steps. So if one employee has “work ethic” and another has “get it done attitude” you can ask the group how they would combine that wording into a single trait. I look over the board and circle similar behaviors, and then ask if there is a phrase that describes what we are trying to say. This is where we start lengthening the words into descriptive paragraphs.

You will wind up with a list of 5 to 8 behaviors. Ask the group “Can we formulate core values statement using these behaviors?” If they agree, ask “Are there any important values in our company that aren’t on this list?” Although there may be one or two suggestions, those can usually be incorporated into the existing list with a bit of modification.

4. Drafting the Statements.

Beginning with the behavior phrase list, ask the group “How would we say this in a way that is more specific?” I ask about what “assumed meaning’ words, such as responsible, diligent or consistent, really mean. For instance, the behavior of “Hard worker” can morph into the phrase “Takes ownership of getting things done.” When asked what that means, the group can better define something like “Each employee behaves as if he or she was solely responsible for the success of a project.”

If you have more than 5 statements, try to trim them down. Usually, two or more will be different aspects of the same values and can be combined. Note that, as the facilitator, this is where you are using the power of the pen to craft phrases describing behaviors into statements of values. Don’t be afraid to suggest alternative wordings here, although you should not be participating in the previous steps except to record the Mission Team’s input.

5. Prioritizing the Values:

I conclude by handing out slips of paper for a priority vote. The participants list the top three statements in what they feel is their order of importance. I tally the votes (weighting them in order of each individual’s selection), and re-list all the statements in the order determined by the group.

I think the Mission to Mars works so well because it’s fun, takes people out of visualizing the workplace, and at the same time focuses on concrete behaviors instead of vague “values.” It is very, very effective.

A Note to My Readers

This January marks the start of my seventh full year of writing Awake at 2 o’clock on a weekly basis. I got serious with the publishing of “The Strategic Triple Threat” in January of 2009, which will probably stand forever as my most accurate piece of economic prognostication. :-)

Many thanks to the hundreds of you who have commented, and who come up to me at speaking events and say “I’ve been reading your blog for years.”If you read regularly and find yourself nodding in agreement or quoting a column, then I feel that I’m doing my job.

It’s a big, wide Internet out there. Like any blogger, I’m thrilled that I touch so many people with helpful information, but would always like to reach more. Please help by taking a few minutes to pass along a link to any business owners or advisors that you think might also enjoy an owner’s point of view.

Thank you

If you would like a printable pdf of this column or any other, please let me know at jdini@mpninc.com.  

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One Response to How to Get Employee Buy-In for Your Values

  1. Cathy Locke says:

    John,
    You hit the nail right on the right spot!! Thanks! I don’t get a lot of time reading your blogs, but I put them in “your folder” and try to look back at them when possible. This is the time for making our small company statements, and since I have survivedYear 5, I feel we are at the point to really grow, so I will definitely follow your blog for today!! Thanks and Happy New Year!!
    Cathy

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Goals are More than Just Resolutions

Most of us (at least those who don’t own retail businesses) are in low-power mode at this time of year. Double midweek days off and decompression following the holiday rush allows us time to think. For many, that thinking naturally turns to what we hope to accomplish in the coming year.

For a small business owner, company goals frequently occupy a higher priority then personal goals. Losing ten pounds would be nice, but growing by 10% would be nicer. Reading more is a great goal, but reading stronger finblackboard 2015 goalsancial statements every month can ease the pain of not having opened a book.

Some of us develop extensive and detailed business plans. Others go through the year with a series of short term objectives. Both methods can succeed, if you have the people who work for you tuned in to what the goals are, and how they can help you to reach them.

Follow the SMART methodology (Specific, Measurable, Attainable, Resourced and Time-sensitive). Note that I substitute “Resourced” for the more widely-used “Reasonable.” I think specifying how something is both attainable and reasonable is redundant. On the other hand, a well stated goal should include the tools, time and talent available to make it happen.

Your leadership role begins with clearly communicating the goals to your employees and showing them how each one can contribute to successful execution. A few simple steps can make this much easier.

  1. Start with “Why.” Simon Sinek’s question on TED has generated over 20,000,000 views for a reason — it makes sense. Explain to your employees how accomplishing these goals will fit with your core values, make the company a better place to work, or improve your offering to customers. Take them out of the “more money is just better” mindset with a bigger perspective of the benefits.
  2. Define each of the SMART factors clearly and in detail, with complete narratives. Putting them in a conversational form makes them more real than theoretical.
  3. Sit with employees individually or in small groups and ask them to discuss how their contributions can support the overall goal. In many cases, you’ll discover that they have no idea of how to approach any objective beyond merely “working harder.”
  4. Develop clear graphic representations of accomplishments and progress towards the objective, and put it where employees can check it regularly. If this involves collecting data, delegate the responsibility to someone who will be diligent in maintaining it.
  5. Celebrate milestones and on-target performance. Don’t let regular wins or regular shortfalls become routine. “Why we fell short” is less important than “How can we do better?”

If things are quiet around your business, it’s a perfect time to be communicating with your staff. Business goals are more involved than New Year’s resolutions.. If you want your company to reach its objectives, it will require an all-hands effort.

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3 Responses to Goals are More than Just Resolutions

  1. Frank Benzoni P.E. Retired says:

    Once again a great adaptation of what to do and why – Excellent writing John !!

    Frank

    Merry Christmas and a Happy 2015

  2. Pingback: Goals are More than Just Resolutions | The ExitMap | Transition Planning for Business Owners and their Advisors

  3. Claud Gilmer says:

    Hi John!
    Good info & timely reminder!
    Here’s to a successful 2015!
    Thanks, Claud

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