Scared of Ideas or Open to Change?

He hears the alarm clock, hits snooze, and lays there for ten minutes somewhere between sleep and awake. “In the Hall of the Mountain King” by Edvard Grieg plays:

He does what I think is one of the hardest things in the world to do, he puts the first foot on the floor in the morning. He goes to the bathroom, runs the shower, and peers into the mirror. Everyday its the same. Same time, same song, same struggle. Everyday.

Routines are good for many aspects of our lives. We need to focus on what is different in our environment and routines keep us safe to do so. But the comfort of a routine can be disabling as well. For instance, there’s a field of study called Terror Management Theory and it describes what people do to repress an awareness of mortality. Here’s an excerpt from HarvardBusinessReview.com called Employees See Death When You Change Their Routines which enumerates three means for warding off these thoughts:

Studies show that we create three existential buffers to protect us from this knowledge: Consistency allows us to see the world as orderly, predictable, familiar, and safe. Standards of justice allow us to establish and enforce a code of what’s good and fair. Culture imbues us with the sense that we have contributed to, and are participating in, a larger and enduring system of beliefs.

As a manager it’s important to know which of your employees are lulled into this perceived safe zone and will need some coaxing when change is on the horizon. They’ll want to hold onto the way things are – they’re good at them, they understand what’s expected, and they are familiar – but it’s counterproductive. You’ll need to invest in re-establishing these buffers for them…

Unless they are risk takers. Many entrepreneurs don’t like routines. They want constant change with a little bit of chaos mixed in. Companies like Google seek them out because they tend to be disruptors and a disruption can be a money maker. Just last week the NY Times ran an article about how Google gave 10% raises across the board. Google’s growth has brought with it the bureaucracy of a big company. Some entrepreneurs are fleeing the company. The reason is because they can’t affect change quick enough. Their supply of patience is sapped.

Both types of worker, the comfort in routine and the risk taker, must answer this question posed by Bob Brennan of Iron Mountain to this employees:

What do you recommend we do?

You can get a real sense for who’s invested in moving the company forward, and who’s watching the company go by, with that very simple question.

Q. Why?

A. People lay out problems all the time. If they’ve thought through what should be done from here, then you’ve got somebody who’s in the game, who wants to move, and you can unlock that potential. Bystander apathy or the power of observation, in and of itself, is not very valuable. There are amazingly eloquent diagnosticians throughout the business world. They can break down a problem and say, “Here’s your problem.” But it’s prescriptions that matter. So how do we move from here, and what specifically do you recommend?

Working Thoughts 11/29/07
It’s Not a Recession but it Sure Feels like It

Working Thoughts 11/29/08
There Are Jobs for Low Level Employees?

Private Sector Jobs: A Lagging Indicator Showing 10 Months of Improvement

The last Jobs Report was all-in-all a very positive report. The numbers that came in blew away expectations and the revisions for the past two months also significantly improved those figures. Here is a chart showing the last 22 months. We have a long way to go, but growth, slow as it is, is ahead. If I’m the head of HR, I’m gearing up for a competitive 2011 – jobs are a lagging indicator for the economy.

Notes on the chart:

  • Beginning in November of 2009, two years after the recession began, the jobs report starts to smooth out
  • The Government numbers in 2010 are a roller coaster due to the temporary nature of census work (once a decade)
  • Private sector hiring has slowly improved throughout the year (2010)
  • The 2009 figures are historically bad. The normal top and low range for jobs is between a gain of 250,000 and a loss of 250,000.

Working Thoughts 11/10/08
Cultivating a Business Network

Working Thoughts 11/10/09
Unemployment Graphs and Charts – October 2009

October 2010 Jobs Report and Wages

Here are the job market and compensation numbers for October 2010 (based on the job report):


Net gain
of 151,000 jobs in the month

  • Census work, which elevated the jobs report in the spring and then weighed it down over the summer is no longer a factor
  • Private sector payrolls increased by 159,000
    • Four straight months of private payroll gains surpassing 100,000. Hasn’t happened since October 2005 – April 2006

  • Analysts expected an overall gain of 60,000
  • August was revised to a loss of 1,000 from an original reading of a loss of 54,000 and a revision of 57,000 last month
  • September was revised to a loss of 41,000 jobs from an original reading of 95,000 lost jobs
  • The revisions for August and September alone add 110,000 jobs to the economy
  • 6.1 million people have been jobless for more than 6 months (long term unemployed) – virtually unchanged from September and August

    • 41.8% of the unemployed are long term unemployed – inched up from 41.7% last month
  • Businesses (private sector) have now added 1.1 million jobs since the start of 2010, after cutting 8.5 million in 2008 and 2009 combined
    • 1% Gain over the last 12 month. The first time this has happened since mid 2007, prior to the recession

  • Government has lost 253,000 jobs

Unemployment rate stayed at 9.6%

  • Analysts predicted it would be 9.6%
  • The employment to population ratio is 58.3% – down from 58.5%
  • The U-6 report, which is a broader group to count (workers who are part time but want to be full time and discouraged worker), decreased slightly to 17.0% from 17.1%. This is still really high
  • PMI, a measure of manufacturing pace, is 56.9% and the 18th consecutive month of readings over 50 percent. Anything above 50% means the machines are running
    • There are now 0.8% more manufacturing jobs than there were a year ago. Manufacturing has been a slow decline for a decade

  • Productivity, measured for the quarter, showed tepid growth of 1.9%

Specific Segment Job numbers:

  • Manufacturing lost 7,000 jobs
  • Construction gained 5,000 jobs
  • Retailers added 27,900 jobs
  • Leisure and Hospitality Services lost 5,000 jobs
  • Government sector lost 8,000, Federal losses were 1,000
  • Education and Health Services grew by 53,000 jobs
    • Health Care and Social Assistance grew by 34,000

  • Professional and Business Services grew by 46,000
    • 34.900 jobs added in Temporary Help

Wage (can be revised):

  • The average weekly paycheck (seasonally adjusted) is $644.11 – an increase of $4.26!
  • The average hourly earning (seasonally adjusted) is $19.17 – an increase of 7 cents
  • Average weekly hours and overtime of production and nonsupervisory employees on private nonfarm payrolls by industry sector, seasonally adjusted is 33.6 hours

Bureau of Labor Statistics

Job Report Stats Summary

The Next 30 Years: Smaller

An election just passed and the results indicate a very unsatisfied voter. It makes perfect sense. Middle class jobs are scarce and wealth is gravitating only to the uber-rich. We’ve had a thirty year mirage in the standards of living.

Thirty years is a time period I key in on. President Ronald Reagan made thirty year policy decisions and we are at the dawn of a new thirty year window. Besides the politics of it, the transition of leadership throughout companies and communities is just now beginning. Those in their 30s and early 40s are set to grab leadership positions within the next three years.

This is a very positive development.

The values of those ending their leadership position are different from those set to attain it. For instance, the sense of privacy for a 25 year old is nothing like it is for a 60 year old. Sharing on facebook, twitter, and on blogs means you are comfortable with potential embarrassment. There is no hiding skeletons in the closet anymore.

But the main value I see differentiating the two groups is one of scale of competition. The older guard wants to amass competitive advantages and really leverage economies of scale. But the younger guard wants to go smaller. Manufacturing shaped the economics of the 20th century, but a knowledge economy is shaping the present day. Concepts like Design and Branding are ever more important. And perception plays a part in how they are valued. Perception isn’t a Deming TQM or Six Sigma concern.

Bigger versus smaller separates the path. Bigger wants to protect the status quo – scale is expensive. Smaller wants nimbleness but with standards. Think Microsoft with the Office Suite versus Apple’s App Store. Microsoft has a cash cow with Windows and they leverage it to sell Office. People are familiar with it and it works. But how much has it really changed over the last 10 years? Not much, but people keep buying it. Now think about Apple with the App Store. They developed a platform for small developer shops and large ones to compete on an even field. Apple manages the standards and sets up the merchant services. The developers can leverage the scale Apple already built with the platform and sell. Compatibility and interoperability aren’t deal breakers either. This simplifies the cost to compete. Ideas sink or swim based on their merit and marketing.

As we embark on the next thirty years, expect to see a shift in values. It’ll be less of an us and them world and competition will be a loose definition, almost encouraged. Attitudes will change. Smaller is captivating. What do you value?

Working Thoughts 11/4/08
Why Voting Matters

Generational Delay in Leadership

A few entries ago I wrote about a movie called Waiting For Superman. Today I learned that Jeff Skoll is the man behind it. He funds movies with an angle beyond entertainment; his movies inform, potentially leading to social activism. His films include: Good Night, and Good Luck, North Country, Syriana, An Inconvient Truth, Murderball, Fast Food Nation, The Kite Runner, and Charlie Wilson’s War.

He can fund all these movies because he was the first President of eBay. In 2002, he cashed out for a take of $2 Billion. He was 31 years old when he became the lead of the internet auction house. In his 20s he took some entrepreneurial risks, those successes earned him the eBay opportunity and he is credited with forming the business model the company uses.

Fortune.com is running a theme about leaders under the age of 40. They have a 40 Under 40 piece and a 20 Highest Paid Under 40 section going currently. These people are featured because they are leaders. They are changing the world. And they are young.

As much as the 6.2 million long term unemployed are a long term economic problem for the US, the slowing of the ascension of next generation leaders is as well. There are Pew Research Studies showing a delay in independence  in 20 somethings in the US. Here are some stats:

  • In 2010, 85% of college seniors planned to move back home with their parents after graduation.
  • In 2006, 67% of college seniors planned to move back home.
  • In 1970, the age of someone who is not college educated to get married was 22 years old. For the college educated, it was 23 years old.
  • In 2008, the age of someone who is not college educated to get married was 28 years old. Same for college educated.

This is important for a variety of reasons, but the two main ones are: it delays leadership chances and it stunts income potential. A study was performed by Columbia University called Elites Research Network. The point of the work was to understand how, or what, made someone elite financially. The seminal finding was most of the people were put in early career opportunities, the type that makes the person a generalist and not a specialist. This advantage, more than privilege or inheritance, is the key to lasting success.

So what does it mean for the US that 85% of college grads are living at home post graduation? Or that marriage on average is 6 years later than it was in 1970? Is 40 the new 30? And if so, without the compounding interest of 401k or pensions does that mean 75 is the new 65?

September 2010 Jobs Report and Wages

Here are the job market and compensation numbers for September 2010 (based on the job report):


Net loss
of 95,000 jobs in the month

  • Census workers accounted for a loss of 73,500 workers and government hiring as a whole lost 159,000
  • Private sector payrolls increased by 64,000 (July revised to a gain of 117,000 and 93,000 last month)
  • Analysts expected an overall gain of 18,000
  • One year ago the US lost 225,000 jobs
  • August was revised to a loss of 57,000 from an original reading of a loss of 54,000
  • July was revised to a loss of 66,000 jobs from a revision of 54,000 jobs and an original reading of 131,000 lost jobs
  • 6.1 million people have been jobless for more than 6 months (long term unemployed) – virtually unchanged from August

    • 41.7% of the unemployed are long term unemployed
  • Businesses
    (private sector) have now added 863,000 jobs since the start of
    2010, after cutting 8.5 million in 2008 and 2009 combined

Unemployment rate stayed at 9.6%

  • Analysts predicted it would be 9.7%
  • The employment to population ratio is 58.5% – unchanged
  • The U-6 report, which is a broader group to count (workers who are part time but want to be full time and discouraged worker), rose to 17.1% from 16.5% two months ago (it had held steady for a few months)
  • PMI,
    a measure of manufacturing pace, is 54.4% and the 17th consecutive month of readings over 50 percent.
    Anything above 50% means the machines are running, but the rate has been declining

Specific Segment Job numbers:

  • Manufacturing lost 6,000 jobs
  • Construction lost 21,000 jobs
  • Retailers added 5,700 jobs
  • Leisure and Hospitality Services grew by 38,000 jobs
  • Government sector lost 159,000, Federal losses were 76,000
  • Education and Health Services grew by 17,000 jobs
    • Health Care and Social Assistance grew by 32,000

  • Professional and Business Services grew by 14,000
  • Mostly added by the 16.900 jobs added in Temporary Help

Wage (can be revised):

  • The average weekly paycheck (seasonally adjusted) is $639.85 – an increase of 32 cents
  • The average hourly earning (seasonally adjusted) is $19.10 – an increase of a penny
  • Average
    weekly hours and overtime of production and nonsupervisory employees on
    private nonfarm payrolls by industry sector, seasonally adjusted is
    33.5 hours

Bureau of Labor Statistics

Job Report Stats Summary

Inspiration and Institutions

Malcolm Gladwell, the author of several best sellers including a favorite of mine The Tipping Point, wrote a New Yorker article last week about the bonds of Social Networking tools like Twitter and Facebook. To explain his point he describes the fears and risks of the “sit in” generation of the 1960s. Social change at that time required a particular type of nerve: courage and restraint. It was needed because the threats, occasionally deadly, were often carried out. They knew they had to endure because their weakness would lead to weakness in others. Gladwell calls these strong bonds.

6.2 million people have been unemployed for more than six months. Being without work for that long is troubling to the mind. Being available in case something comes up and the instability of simply not knowing is tough. Plus it’s lonely. But 6.2 million is a big number and it means there’s probably someone within your community who is in the same predicament. That is where a site called Unemployed-Friends.com comes in. It’s a means for those without work to exchange messages, thoughts, and prospects. But besides the fringe benefits of venting, it’s a market for helping each other. That’s the genius of it, these people have time and unused skills available. And this is just the short term benefit. Strong bonds might be the long term benefit.

When I was about eight years old, I remember the pull the professional wrestling. “Who won Wrestlemania?” I’d ask my dad because it was too late for me to stay up. This was the ’80s and wrestling wasn’t obvious about the scripted action yet. People like Hulk Hogan would get the crowd going with their back stage interviews. In the late ’90s a resurgence followed and people could smell what The Rock was cooking. The camera would pan the stands and see signs with clever sayings like “Hogan was a Flintstone” and “This Space for Rent.” Everyone would chant the catch phrases and nothing would be better than Jerry Lawyler’s high pitch announcement of a surprise wrestler “WHAT?! That’s Stone Cold Steve Austin’s music!” Simply exciting.

But this type of connection is weak. It’d only last while the entertainment was going and then it was time to move on to something else. I think this is what Gladwell was trying to get across with his New Yorker piece. That Twitter and other Social Networks are forms of entertainment and have no lasting kinship. But we are also in a society where the threat of an act is all that is needed. It’s pretty powerful. So getting a few thousand signatures via facebook isn’t the same as a “sit-in” but it sends the message to the offending party that they could be in a costly confrontation. And then they have to decide if it’s worth it.

I mention all this because I think a real test of these tools is underway. The US election cycle for 2012 will begin in about six weeks. About a year later we’ll begin to see a lot of movement around a third party candidate. Thomas Friedman in the NY Times writes about the idea in a Op-Ed piece called Third Party Rising . He should have used a former wrestler as an example – Jesse Ventura ran a grass roots campaign in the mid ’90s, about the time the Rock was cooking, and became governor of Minnesota. Michael Bloomberg might give it a shot, we’ll see, but I don’t think a third party can win, but he can get close, and the mere threat should send shock waves to the Democrat and Republican Parties. From a business perspective, the time is right to capitalize on the on coming need and use of the strong and weak bonds.

Working Thoughts 10/4/08
September 2008 Jobs Report and Wages