There are Jobs for Low Level Employees?

My last post mentioned something called a Hiring Brand. It is mainly an additional consideration for a company before it changes its hiring practices. The example I used was based on not hiring junior associates. I don’t know if this is happening or not, but Penelope Trunk claims that those who are typically in that role (recent college grads) are not facing a job shortage. She has a post called Reason to give thanks: There is no job shortage for young people that describes her thoughts on it. The theme that she wants to communicate is that the doom and gloom that is thrown at the faithful reader is not representable of the entire job market. Here is an excerpt:

The not-feeling-so-great thing is that, in the case of everyone but
the young, the economy is only good for star performers. But really
(and here is the part of the post you should skip if you want
Thanksgiving bliss) I have been ranting and screaming for years that
the best way to have a good life is to be a star performer at work
because that gives you the most flexibility to get what you want out of
life. Don’t be a star performer for money. Be a star performer so that in an economy like this, you don’t have to worry about a paycheck.

But—I know someone will ask—here is the evidence that things are fine for young people:

1. Jobs for low-level candidates are increasing. This data comes from a report from Beyond.com
issued on November 14: In October 2008, jobs for candidates with 0-3
years of experience increased by 3.68% when compared to jobs posted in
September 2008. This was the only category of jobs by experience level
that did not decrease over the previous month.

2. There are plenty of entry-level jobs to be had. There is a backlog of entry-level jobs that have been going unfilled for years. Alan Schweyer of the Human Capital Institute
said just three weeks ago, sitting next to me on a panel, that the
unemployment rate for college grads has been at 0% for the past seven
years. (ed. – Alan Schweyer has a great comment toward the bottom of the comments clarifying this statistic.) In the middle of 2008, Robert Half,
a recruiting agency for accounting and finance, said that accounting
firms have been so chronically understaffed that we’d have to have a
five-year recession for them to catch up.

3. College grads are doing fine in today’s market. On November 19, JobFox announced that,
“Skilled professionals remain in demand despite the economic downturn.
While the unemployment rate rose to 6.5 percent in October, the
unemployment rate for professionals with college degrees remains
manageable at 3.1 percent.”

So I know what you’re saying. If things are so great for young
people, then why is Obama creating 2.5 million jobs from the Chicago
Hilton? The answer is that unemployment is insanely high for older
people: Yesterday, Fox News reported that the unemployment rate for
people over 50 is nearing 50%.

Of course you can’t take the statements at face value – that is why she provides the links – because you can easily be misled. Much of the hiring is regional and many jobs are not what most would consider on par with their skills. But at the same time, hard work and discipline are characteristics many people can learn. This reminds me of another topic I will post about in the future – Job Corps. This is a Department of Labor resource available to young people to help them figure out what work is all about and get paid while earning experience.

Back to Penelope Trunk, although this post is timely, what I really like are the comments. You get a fair spread of criticism, agreement, examples, and general input.

Hiring Brand?

I didn’t realize it until I read a recent article in the NY Times called Why Should Recession Stop the Recruiters?, corporations have a hiring brand. Not just a product brand and a workplace brand, but a brand in regards to types of workers it hires. For instance, some companies are big on taking in people fresh out of college while others look for experience. Of course it ultimately depends on your compensation strategies, but it is worth noting that most companies are viewed one way or another. With acknowledging that fact, you have to considering how your brand will change if you decide to change your hiring practices, particularly in a down economy. A wrong move can substantially shift the talent pool within the company for many years thereafter, especially if you are the type of company that promotes within (as most corporations would like to believe).

Case in point, suppose you freeze hiring on junior associates. These are the people that learn on the job and do research assignments in support of decisions. Without these people coming in, the group that is currently doing it can’t vacate the role, but at the same time they aren’t learning it anymore. If I’m that person, I better get the raise as if I had ascended up the ladder or I’m looking for a new job. Once the economy does pick back up, the group that hasn’t progressed career wise because of the lack of replacements, begins to jump ship. So now you not only don’t have the junior associates (weren’t hired in the first place) but you don’t have the level above them either (maybe some of the poor performers are still around). The reaction is to hire the junior associates again and promote quickly those that show promise. This will work for a handful of workers but the majority of those promoted won’t be ready and won’t identify issues up the line like they would have with the proper training time. This inability is now persistent within the organization and slowly degrades all performance.

Educating – A Down Economy Good Opportunity

There’s an old notion that the people who got the richest during the gold rush weren’t the pan handlers, they were the people selling the shovels, picks, and other equipment. So it goes to reason that people that come up with a good business model tailored to people who need assistance in finding their riches are also going to get wealthy.

The national economy is at the point of diminishing corporate jobs. The unemployment rate is rising quickly. And people have to pick a path. One route to take is government employment. Each level is hiring, especially the Federal Government. Another route to take is starting your own business. There are many underserved markets during tough economic times and people who see opportunity can quickly get their footing.

So if you combine the first two paragraphs you get plenty of entrepreneur opportunities. One that I really like is Startup Weekend. The concept is to bring people who want a crash course in starting their own internet related business in over a long weekend and provide them the opportunity to learn from the experience. CNN.com did a story on it called How to launch a tech company in one weekend by Curt Merrill. Here are some excerpts:

Twitpay was one of several projects in development at Startup
Weekend, held November 7-9 in Atlanta, Georgia. The event brought
together more than 100 programmers, marketers and designers who tried
to create new companies from scratch in less than three days.

“The actual building of the product was about 80 to 90 percent done at Startup Weekend,” Brown said.


The process began Friday evening when more than 100 entrepreneurs
gathered to pitch their ideas. Organizer Lance Weatherby said about 60
ideas were presented. After a series of votes, eight or nine projects
were selected, and the attendees split into groups to work on the ones
they were most excited about.

The Atlanta event was the 25th
Startup Weekend since the concept was created in Boulder, Colorado, in
July 2007. Startup Weekends have been held across the U.S. and in a few
cities in Canada and Europe. Past weekends have produced such companies
as Market Monitor, a search engine optimization tool, and iDream, an
online collection of dreams and dream interpretations.

When you consider the down economy, every excited customer is like gold

“I’d absolutely sign up again,” Gebert said. “I got to meet some great people.”

Stobbs said that’s the point of Startup Weekend.

“The projects are a great byproduct, but our goal is to push community,” he said.


George Junginger, of Raleigh, North Carolina, has been to four Startup
Weekend events and said he’s still in touch with people he met at the
first one he attended.

“You work like crazy for 54 hours, but it’s actually way more than that,” he said. “It doesn’t end when the weekend ends.”

What States are Preparing for the Next Economy?

Time seems to slow down during sour economies. Just the last few months feel like a year. But in less than 3 years we will look back on this time as a learning experience or perhaps a behavior change. And certain factors will determine what skills and geographical areas are most valued.

A group called Information Technology & Innovation Foundation (ITIF), has named Massachusetts as the state most likely to come out of the situation as a leader in the next economy. What is the next economy? It includes start-up activity, education, venture capital investment, IPOs, patents and alternative-energy. These items were then grouped into knowledge jobs, globalization, transformation into a digital economy, technological innovation capacity and economic dynamism.

The factors used look pretty good to me. And at least its a start. So Massachusetts was number 1. Rest of the top 10 are: Washington, Maryland, Delaware, New Jersey, Connecticut, Virginia, California, New York and Colorado. The bottom looked like:Mississippi, West Virginia, Arkansas, Alabama, Wyoming, Kentucky, South Dakota, Oklahoma, Iowa and Louisiana.

Four Reflective Commentaries on Leadership – Part 2

The first entry of this two-parter was posted this past Monday. Now it is time to talk about the remaining two commentaries.

The Uses of Adversity: Can Underprivileged outsiders have an advantage? by Malcolm Galdwell in the New Yorker (11/10/08)

This writing focuses on Sidney Weinberg. He is credited as making Goldman Sachs an investment powerhouse. But Weinberg wasn’t your typical Wall Street type. He’s the self made type that started in as a janitor and climbed the ladder. The angle of the story is how he climbed the ladder. It wasn’t because of his pedigree. It was because he flaunted his differences, his outsider persona. This allowed him to be less cordial and cut to the chase. And, according to the story, he knew it was an advantage. Weinberg was socially talented. He knew what to tell people and when to say it. He was able to see himself as others did and manipulate that perspective. Here is an excerpt as an example:

A friend told of Weinberg’s
being the guest of honor at J. P. Morgan’s luncheon table, where the
following exchange occurred: “Mr. Weinberg, I presume you served in the
last war?”

“Yes, sir, I was in the war—in the navy.”
“What were you in the navy?”
“Cook, Second Class.”
Morgan was delighted.

Of
course, J. P. Morgan wasn’t actually delighted. He died in 1913, before
the First World War started. So he wasn’t the mogul at the table. But
you can understand why Weinberg would want to pretend that he was. And
although Weinberg did a stint as a cook (on account of poor eyesight),
he quickly got himself transferred to the Office of Naval Intelligence,
and then spent most of the war heading up the inspection of all vessels
using the port of Norfolk. But you can understand why that little bit
of additional history doesn’t fit, either.

Andrew Carnegie said “It is not from sons of the millionaire or the noble that the world receives its teachers, its martyrs, its inventors, its statesmen, its poets, or even its men of affairs. It is from the cottage of the poor that all these spring.”

10 New Gurus You Should Know by Jennifer Reingold and Christopher Tkaczyk in Fortune.com (11/13/08)

This isn’t really an article but mainly a recap of 10 individuals with new ideas. During economic troubles people with new ideas take on more significance because anything is worth a shot. Here is the list:

Patrick Lencioni – Founder, the Table Group, Lafayette, Calif.

Big Idea: Most executives don’t realize that the internal health of a company is key to its success.

Rakesh Khurana – Professor of business administration, Harvard Business School, Cambridge, Mass.

Big Idea: Charismatic CEOs don’t work; management needs to become a profession, like law.

Valerie Casey – Leader, Digital Experiences Practice, IDEO; founder, the Designers Accord, Palo Alto

Big Idea: A Kyoto Protocol for designers

Don Sull – Professor of management practice in strategic and international management, London Business School

Big Idea: Welcome uncertainty in turbulent times.

Joel Podolny – Former dean, Yale School of Management; incoming vice president and dean, Apple University, Cupertino, Calif.

Big Idea: Business schools must teach real-life problem solving.

Nouriel Roubini – Professor of economics, NYU Stern School of Business, New York City

Big Idea: Create a new global regulatory framework.

Janine Benyus – Co-founder, Biomimicry Guild and Institute, Helena, Mont.

Big Idea: Innovate by imitating, or “mimicking” nature.

Dan Ariely – Professor of behavioral economics, Duke University; member of MIT’s Media Lab Center for Future Banking

Big Idea: People are predictably irrational

Niko Canner – Co-founder, managing partner, Katzenbach Partners

Big Idea: Companies tend to avoid change, or change at the expense of their core strengths.

BJ Fogg –  Founder and director, Persuasive Technology Lab, Stanford Univ., Palo Alto

Big Idea: Mobile technology will be the most powerful way to influence consumers in the next 15 years.

Four Reflective Commentaries on Leadership – Part 1

I ran across four reflective commentaries over the last few days. The subject is business leadership. The focus is primarily on Banking Leadership, but it doesn’t have to. Banking is just so fascinating because bankers have always been powerful and will probably always be powerful. With that in mind, here are two summaries, with the remaining two coming soon.

Our Risk, Wall Street’s Reward by William Cohan in the New York Times (11/16/08)
This Op-Ed piece is from the point of view of an insider – someone who lived the world of an investment banker. Cohan worked for an investment bank that just recently went public and sold shares. He articulates the ramifications of this decision and the breakdown of some underlining tenets of investment banking. One is trust. Another is reputation. And another still is vision. I love this yester-year quote “The beauty of the partnership agreement was the collective liability clause it contained.” Liability and accountability became a mirage. These two excerpts either present the start to a compensation shift or a temporary compliant.

There has never been a better moment to correct this deeply flawed
system. For starters, where is it written in stone that bankers and
traders have to be paid millions of dollars for their services? The
gibberish about needing to pay that much just to keep superstars from
fleeing to private-equity firms or hedge funds is just another Wall
Street myth. The truth is most of them are lucky to have a job at all
and they know it.


Instead of fretting over government intrusiveness, titans like Jamie
Dimon of JPMorgan Chase, Ken Lewis of Bank of America, Lloyd Blankfein
of Goldman Sachs and John Mack of Morgan Stanley should be dancing a
jig that Mr. Waxman and Mr. Cuomo have given them cover to make the one
change on Wall Street that would help their bottom lines and prevent
the tragic cycle of lurching from one financial crisis to another. But
if they don’t, then the new secretary of the Treasury should help them
see the light.

Meet Your New Leader by Jennifer Reingold of Fortune.com (11/14/08)
Reingold points out the leaders, namely Jamie Dimon of JP Morgan Chase, who are coming out his crises as influencers are the ones who are not acting like their recent predecessors. Characteristics like humility, delegation (even to contrarians), and intrinsic motivation are coming to the forefront. Reingold recaps a few generations of leadership styles and sees a time for a shift to happen. She terms this shift the age of the lifeguard leader.

Unlike the Lone Ranger, the Lifeguard is comfortable not knowing what’s
about to happen. Scanning the horizon, he can anticipate a coming shift
– what leadership experts call “hearing weak signals.” He can work with
a team and with rules set by others. And he isn’t in it just for the
money.

And also, as Reingold points out, the era we are coming out of used two poor metrics to reflect performance. The first is the ever changing stock price. Although a stock price is a good long term indicator, frequent snap shots fail to tell the whole story. The second bad metric is the size of the pay package. Being paid something like 500 times more than the normal employee balloons anyone’s sense of importance. This created positive feedback loops – no conflicting ideas were allowed. This type of environment always leads to failure.

But if Reingold is right, this change will lead to something I believe is the future as well.

But in the void left by the visionaries, a new model is emerging.
Collins thinks that legislative, not executive, skills are now
ascendant – that top CEOs will be those who are able to create the
conditions for things to get done rather than hand down orders (as Hank
Paulson learned, what worked at Goldman Sachs didn’t fly in Congress).

What is so important about this is the implied consequences. The first is empowered employees. If you have a model in place to make good decisions, your employees – the experts – will make them. This improves productivity. The second is flexibility for the executive leadership. As environments change, the system is in place to adjust quickly. And there is a much higher possibility of identifying the impending changes earlier.

This new breed will have to be comfortable admitting what they don’t
understand and asking for help. Collins has analyzed leaders in tough
spots throughout history, including John F. Kennedy during the Cuban
missile crisis. He found that Kennedy had an extraordinary
“questions-to-statements” ratio, which reflected his comfort expressing
what he didn’t know.

Finally, these Lifeguard leaders will need
the courage to tear up the plan in case of a sudden squall, as Wachovia
CEO Robert Steel did when he quickly sold out to Wells Fargo (WFC, Fortune 500),
or Banco Santander’s Emilio Botín has done by snapping up rivals on the
cheap. “I’m shocked about people watching the train come down the
tracks, and they are still worried about the strategic plan,” said
Dimon at the Harvard summit.

Already, says James Reda, founder
of an eponymous pay consultancy, there are signs that boards may be
reconsidering what they look for in a CEO. “This is an inflection
point,” he says. One Fortune 100 director told him recently that “the
day of the $10 million CEO is over.” It may indeed be the end of an
era. As Collins puts it, “This will be a time of spectacular
opportunity for the right leaders.” Lifeguards, man your stations.

 

My Interview with Norm Bogner of 4Refuel

I want to thank Norm Bogner of 4Refuel for doing this email interview for my Working Thoughts blog. As I’ve stated before, I’m a big believer in entrepreneurship, innovation, and energy. And from what I know of 4Refuel, it sounds like they have most of that covered.

– Full Disclosure – I don’t own any part of 4Refuel. I don’t know any employees of 4Refuel. I don’t get any benefits for speaking positively of them except for maybe some more readers.

Here is our exchange:

Hi Norm. Thanks for agreeing to do an interview with Working Thoughts. I hope you don’t mind some follow ups.

How would you summarize 4Refuel’s offerings?

4Refuel is a fuel management company that synergizes logistics and information to focus on the productivity, efficiency, and control aspects of our client’s fuel. By controlling fuel costs, we help them be more productive and more efficient. We leverage industry-leading and proprietary technologies combined with a dedicated client focus service element that helps our clients manage their fuel and treat it as an investment rather than a cost. For our clients, Fuel Management is about “maximizing the cost of refueling and maximizing fuel and time efficiency”.

Our core focus is on on-site delivery from our tanker truck to clients’ equipment during idle hours, primarily with standard low sulfur diesel fuel.

We have 6,000 clients across Canada and the U.S. that we’ve been servicing for over 13 years. Those range from major Fortune 100 companies such as Coca Cola, Federal Express, large rail and marine companies, and major airport ground services to smaller construction and fleet organizations with three or four pieces of equipment. If it is a standard or bio-diesel consuming asset, we service it.

There’s another important aspect to our service. While we help our clients control fuel costs, they are greener just by using our services. We have metrics in place so clients can track their greenhouse gas emissions’ savings because we are bringing one to many instead of many to one. You are burning that much less fuel even to get fuel.

Is 4Refuel a public or private company and why?

4Refuel is a privately held company and has funded its rapid growth through profitability. The model, which involves franchising, is such that there is no need for capital to fund growth even on an international level.

How does a company like yours forecast growth, especially with the way oil fluctuates?

Our annual growth rate in our core businesses of transportation and construction continues to grow organically in excess of 20% per year and when you get into growth rates in rail, marine, airport ground services and the resource (e.g. mining) industries, our growth rates will be even greater. The reason is that with such uncertainty in the oil markets, clients are now focusing attention on what to most of them is their highest operating cost, fuel. With that greater awareness comes the sobering reality that not enough is being done by businesses to manage their fuel investments. That is where 4Refuel comes in.

What are your growth projections?

Our growth strategy is two-fold:

Our organic growth is client focused on our core businesses (transportation and construction) is targeted at 20+% year-over-year. We expect even greater annual growth in the rail, marine, airport ground services and the resource (e.g. mining) industries.

Secondly, we are actively expanding our geographic coverage both in the US and internationally via franchising. We are seeking the right partners with the business acumen to fulfill the need for Fuel Management by establishing 4Refuel in their city, state, region and even country.

Who and what is your competition and how do you separate yourself?

Please explain the type of efficiencies you see with the customers of your products and services?

We focus on the PRODUCTIVITY, EFFICIENCY AND CONTROL of our client’s fuel. Our “competition” is focused on general delivery and supply rather than information and reporting. Reporting is critical because you can’t manage what you can’t measure. We provide detailed reporting of what piece of equipment got what fuel at what time; that is done almost real time from when they are fueled. All of that information, including pricing, volume and even a duplicate invoice is available online.

We can then supplement that information for clients who wish to focus on very specific points of their fuel consumption and engine performance data. The engine performance data is where U-Con — short for “you control” — comes in. The costs are minimal and installation is simply plugging into the diagnostic port of the vehicle’s diagnostic system. From there, we measure a whole host of key fuel consuming aspects. Typical factors are everything from aggressive driving or hard acceleration, excessive idling or excessive speeding. You can even get into hard braking or power take-off measurements.

Many clients look for quick wins and are not trying to analyze right down to every last drop of fuel. Our analyses spot trends; suppose you’ve got ten drivers and the same two guys are always well outside the parameters you’ve set? There’s a way to strategically approach this and change driver behavior.

Take a further example from a fleet perspective. The industry average is 20 minutes to fill a piece of equipment per day. Let’s just use a fleet of 30, for example. You’ve got 20 minutes and you’re fueling 30 vehicles per day. Those 600 minutes translate into 10 hours. You are spending 10 hours a day in your fleet just dedicated to fueling. What can you do differently? You didn’t buy this asset to fuel it. If it is sitting idle it is not being used. That is where the reporting comes in and the understanding of the true cost of your fuel comes in.

Control is something that is the 800-pound gorilla in the room that no one wants to speak about. Annual theft can range of 5 – 10 % or more of annual volume. The statistics on fuel theft are difficult to put together because until 4Refuel offered it, it has been very difficult to get a complete picture of where your fuel is going. We have many clients that started off with monthly volumes — let’s say 10 thousand gallons — and their fuel use actually went down when they began to use our service.

Let’s get back to your question on whether we can save clients’ money. We analyze their fuel costs and if we can’t show the client in black and white using their numbers that we can save them money either in productivity or labor gains, then our service is not for them. But we find in an overwhelming majority of cases that when we analyze their true cost of fuel, we can save that client money.

What does your company look for in regards to territories? For instance, my home is Charlotte, NC. It has two interstates, a rail line, and a connection with the shipping port in Charleston, SC. Is this a premium territory or does it not matter?

Our focus is on servicing the major urban markets and the infrastructure that is needed to keep them operating and productive on a daily basis. It takes a lot more than most people realize to keep business and industry moving and without fuel, none of that can happen. Just take a look in your office or living room and you will be hard pressed to find anything in it that hasn’t been touched by a diesel consuming asset at some point of the supply chain.

The territory you described sounds like an ideal one for our business as it is a logistical hub serviced by a number of industries. The huge market advantage of Fuel Management is that it is needed by so many industries so naturally, the more industries in a given area, the greater the opportunity is in the territory. We’ve even witnessed great success in markets under 100,000 people due to their location and industry mix. As you can see, there is no shortage of market potential for 4Refuel.

Is 4Refuel considering offering its services for regular gasoline or is it not quite your customer base?

Our focus is on the business-to-business market where the greatest amount of fuel is consumed (over 80% of diesel is consumed by businesses in transportation and construction), fuel is the highest operating cost and the need for Fuel Management is the greatest. However, as a wise person once said “never say never” and with our growth in industries such as marine, rail, natural resources and providing major airport ground services with Fuel Management solutions, nothing is off the table.

What is your company’s opinion of the state of energy, be it tried and true oil or alternative plans such as T. Boone Pickens (natural gas and wind)?

Our focus is on preserving a non-renewable resource through the effective management of its use. Fuel Management means using less of it by identifying inefficient use and that is a significant first step. As Canada’s largest distributor of biodiesel we are also committed to helping clients seek alternative options when it makes sense and providing them with the technology to measure Greenhouse Gas emissions savings.

For the near future, the reality is that we must combine the responsible use of traditional fuels with the alternatives wherever possible in order to extend existing reserves. Until alternatives catch up and the existing infrastructure can be adapted 4Refuel will focus on doing what it can to reduce the fuel consumed by industry’s greatest consumers.