Posted by: dstieglitz | February 28, 2015

ECONOMIC MOBILITY

We know many of our countrymen are wondering what will come of their hopes and dreams. Can we love America and not rest until each of them can reach as high as their God-given talents will take them.”   – Ronald Reagan

       Economic mobility is the vexing challenge of our time. Readers of this website are likely to be on the positive side of the economic divide. But many Americans exist day-to-day just a broken-down car, serious sickness, or leaky roof away from economic ruin. They hear that the economy is growing, unemployment is falling, and the stock market is hitting all-time highs, and ask: “Why don’t I have good times?” The technology and globalization that enrich some Americans are impoverishing others. The U.S. must create shared prosperity by equipping all Americans to flourish. It’s no easy task, but without economic mobility the heart of what is special about the U.S. is gone.

      Fading American Dream. People are losing confidence in the American Dream – the promise that each generation will leave the next in better shape. Politicians see the despair but respond only with partisan solutions that belittle their rivals’ ideas. Voters nostalgically recall the “golden years” when factories provided life-time jobs, babies filled maternity wards, and everyone shared in the post-war boom. But factories, coal mines, and furniture mills have closed in countries with widely varying labor laws, environmental rules, and governments. The root cause isn’t a cyclical downturn that eventually will go away, it is an explosion in global competition and a tsunami of new technologies. Competition cannot be wished away – new ideas and hard work on everyone’s part are required to succeed.

      Appreciating New Technologies. The introduction of new technologies is usually painful. For example, the industrial revolution transformed the human condition with electrical power, engines and factories; but it forced people to leave farms and work near cities. Today’s digital revolution is changing the workplace on a similar scale. So far, the pain has been felt mostly by low- and mid-skilled workers, while income for those whose skills complement computers has soared.

      Raise the Minimum Wage? Those who are willing to work for $8 an hour can easily find a job, but they can’t live on that wage. Unfortunately, higher minimum wages just accelerate the replacement of workers by machines. The best thing governments can do to help workers is to raise their productivity and mobility. Education isn’t just for the young – adults need lifetime learning to stay abreast of new technologies. Also, better housing and investments in public transportation would help people get to and live in places with quality jobs. After the industrial revolution, it took governments nearly 100 years to provide an education that enabled farm workers to thrive in an industrial era. Today’s digital revolution requires a similarly bold, but swifter response.

      Productivity vs. Jobs. Computers, robots, mechanization, and connectivity are creating new industries, but they also are eliminating jobs higher and higher up the skills ladder – yours may be next. Disruptions have swept through workplaces as diverse as publishers, seaports, retailing, factories, and offices (have you seen a secretary recently?). Businesses increase profitability by reducing the workforce since workers’ pay, health care, and retirement are a huge expense in good times and burdensome overhead in tough times. However, productivity advances aren’t such a good thing in the view of unions and public officials desperate to keep their constituents employed. The government’s goal of creating jobs and the private sector’s goal of increasing productivity would be congruous if the government invested more in human capital, infrastructure, and basic research.

      Why U.S. Is Falling Behind?  High taxes, endless regulations, and a complex tax code are often blamed for the decline in U.S. competitiveness. But several other factors are equally as significant. The first is human capital. Most new jobs require skills that our educational system doesn’t routinely teach. Ten years ago the OECD ranked the U.S. first in percentage of college graduates – now we’re 14th. The situation in science and engineering is even worse. The second factor is inferior infrastructure. U.S. infrastructure once was ranked at the top by the World Economic Forum – now we’re 24th. Third, research & development spending as a percentage of GDP has declined steadily, and now is about half what it was in the 1950s. In summary, the decline in U.S. competitiveness is more fueled by declining investments in human and physical capital, and research than by regulations and high taxes.

            Job Apocalypse.  To short-circuit the job apocalypse, coordinated action is necessary to build the workforce of the future. In the public sector, investments in education should start with pre-school and transition smoothly into continuous technical training for workers. In the private sector, companies must cooperate with local governments to expand apprentice programs and continuous learning programs. On a personal basis, since versatile employees are most likely to prosper, take action to cross-train yourself and your people…or you can retire like I am doing.

Posted by: dstieglitz | January 3, 2015

Entrepreneurship in 2015

“A pessimist sees difficulty in every opportunity, while an

optimist sees opportunity in every difficulty.”  Winston Churchill

     Welcome to 2015: yet another year of rampant change especially for me. After selling our house in Maryland and moving our worldly goods south after extensive downsizing, I’m legally a resident of The Villages, Florida. The change is uncomfortable – even a bit frightening. I ask myself “What if?” when I think of dozens of things that could go wrong. The feelings are like those I experienced when I left a senior position in a Fortune-100 company to plunge into entrepreneurship.

    Entrepreneurial Spirit.  It’s more risky to start a business today, but entrepreneurial spirit – a willingness to leave the comfort zone to reach for a better life – still drives America’s economic growth. Companies five years old or less produce most net job growth and much of the innovation, while established organizations tend to expand what already exists. Start-up companies survive by coming up with new ideas and creating jobs in the process. Unfortunately, the U.S. isn’t producing as many start-ups as it once did and today’s start-ups add only five jobs compared with an historical average of seven. The Labor Department reports that start-ups created 4.7 million jobs in 1999, but only 2.7 million new jobs in 2012.

    Barriers to Success.  In the course of outfitting our new house in The Villages, I hired several small businesses. When I ask the owners – some young and some retirees starting anew – how their business is going, they uniformly cite the same barriers:

  • The first is people. They can’t find the right people because schools don’t teach skills for today’s markets. Small businesses can’t afford training, so they get by with fewer people working longer hours.
  • The second is red tape: regulations and taxes. One tradesman said he spends two days a week in county offices pulling permits and just four days working. They also complain about high tax rates and the uncertainty of new laws like Obamacare.
  • The third is cash. Most businesses are funded with the assets of the founder, often a home equity loan. Unfortunately, the recent recession reduced home values to the point few have equity to adequately fund on a start-up.

These hard-working entrepreneurs make a strong case for eliminating regulations and cutting personal income taxes across the board.

    Entrepreneurs – Endangered Breed.  These barriers hit entrepreneurs harder than established companies. Blue-collar business owners are frustrated by the maze of paperwork; academics struggle to commercialize new ideas; and foreign-born entrepreneurs find it difficult to gain residency. American capitalism is moving toward the European model where large firms with resources to deal with regulations dominate, while new companies flounder or sell out to bigger companies. In Congress, Republicans have lost Ronald Reagan’s passion for immigration and Democrats try to win favor with voters by vilifying business leaders. And, despite record low interest rates, both parties seem reluctant to invest in the infrastructure that stimulates business growth. Entrepreneurs may be endangered, but don’t underestimate their ingenuity.

    Brave World of Entrepreneurs.  It’s trendy to glamorize entrepreneurs and ignore the downsides they face. The press makes people drool over the houses, yachts and lifestyles that the top 1% of entrepreneurs enjoy. President Obama was oblivious to the 50% of startups that fail within five years when he said: “If you have a business, you didn’t build it. Somebody else made it happen.” The reality of entrepreneurship is as glamorous as shoveling cow manure in a barnyard. Entrepreneurs worry continuously about meeting payroll. They have no job security and virtually no life outside work. Entrepreneurs are just plain brave, and they deserve respect for risking everything in an attempt to build something from nothing.

     Grey Power.  Historically, most new businesses were started by people in their 30s. Today, that age group is financially handcuffed with student debt and chronic underemployment. With nearly 10,000 Americans turning 65 every day, the number of seniors who are becoming entrepreneurs is growing. They have marketable skills and experience, and the wherewithal to take risks. At the same time, their demand for services is creating entrepreneurial opportunities for younger folks in areas like health care, lifestyle design, and personal assistance. The swelling number of older voters and their propensity to vote gives them power in areas like Social Security reform, health care and disability benefits. And now that influence is extending into small business areas.

     Conclusion.  The U.S. is fortunate that entrepreneurship flows in the veins of its people – both old and young. It’s absurd that the government puts red tape and taxes in the path of people whose desire is to start a business and hire workers. To bolster the middle class, policies that produce jobs and help small business should be at the top of the political agenda. The take-away message to Congress and public officials at all levels is: no matter what else you do, make things easy for entrepreneurs! That may seem obvious, but it’s not happening today.

Posted by: dstieglitz | October 28, 2014

FUTURE THINKING

“Leaders aren’t born.  Just like anything else, they are made through hard work.

 That is the price we must pay to achieve our goals.”    –  Vince Lombardi

      Warren Bennis, who died in July at the age of 89, pioneered leadership as a business discipline. He said managers seek to do things right, while leaders focus on doing the right things. Managers guide organizations to reach goals, while leaders choose goals. Managers focus on the bottom line, while leaders look to the future to ensure the organization thrives in times of change. Bennis held that leaders are made, not born since leadership is a skill that must be learned. Further, the elements of good leadership evolve over time. In today’s workplace, you can’t bark like a drill sergeant and expect people to jump. You must mentor and coache. Authoritative leadership risks alienating people and squandering an organization’s most precious resource: its collective knowledge. Why hire top-flight knowledge workers unless you let them use their knowledge creatively.

       Manager or Leader? Leaders and managers operate with different priorities. As I review my career, I see that I lean toward management. Which way do you lean? As a manager, I make things run smoothly by streamlining processes, applying resources efficiently, and using performance metrics. By contrast, effective leaders present a vision for the future. They grow an organization by moving it in new directions. There is no right or wrong here. Clearly, an organization needs both leadership and management to succeed consistently. What is important is that you understand yourself and the leanings of those around you.

      Over Managing. When executives over manage, they get mired down in old issues instead of shaping a better future.  Congress is a prime example.  Consider a tax system that isn’t competitive in a global economy, immigration policies that just plain don’t work, infrastructure that is insufficient and falling apart, and an educational system suited for a by-gone industrial era. Sadly, this month’s election is unlikely to change that. Government has difficulty shaping the future largely because it is organized into components whose priorities are self-preservation and reelection. To the contrary, shaping the future requires systems thinking that molds current trends into a preferable future. Future thinking doesn’t fit easily into traditional corporate structures either. Furthermore, most business education programs prepare students to manage the present, rather than to lead in a turbulent business environment.

       Shaping the Future. It’s time for leaders in government and industry to shape the future. We are at a crossroads in history where the accelerating rate of change is overwhelming most of society. The Internet, the cloud, robotics, mobile computing, etc. have disrupted the economic order. While leaders and managers claim to prepare people for the future, they are challenged to teach what they have never been taught. Leaders must mentor the next generation to manage change and systematically influence the future.

     Future Thinking Motivates Top Performance. Unsurprisingly, people say that participating in future thinking exercises opens their eyes to possibilities they otherwise never would have contemplated. They also say it gives them confidence in their decisions and actions. The only thing that matters about the past is what we learn from it – how we analyze the past, recognize the way things are evolving, and take action to create a desirable future. Sharing visions of the future with each other is a way to validate our ideas and broaden our perspectives. Keep that in mind when you vote next Tuesday. Which Congressmen and state and local candidates offer a future that you really want to see happen?

Posted by: dstieglitz | September 1, 2014

THE SKILLS CRISIS

We live in a time with more change than any previous era in history. Almost every aspect of our lives will be fundamentally reshaped during the next two decades.  John Peterson

     Planning my move from the Nation’s Capital to Florida is a bittersweet experience. This could be my last posting as a Washingtonian, since future postings naturally will reflect the views of an outsider. Since I arrived in 1976, Washington’s go-go tempo and constant change have been addictive. Working with federal agencies since the Carter administration, I’ve been astonished by the innovations in government during the last four decades. Of course, the journey through new technologies, downsizings, reorganizations, peace dividends, shutdowns, and sequestrations was frustrating at times. Nonetheless, during good times and bad it was an honor to work with dedicated civil servants and military officers who faced change and made the difficult decisions. And today change is on steroids!

     An Evolving Workplace.  Most jobs that I’ve held in the last 50 years have changed radically or disappeared together. For example, the nuclear engineering PhD I worked so hard to earn is near worthless today other than as a plaque on the wall. Millions of others already have or soon will face similar upheavals. By 2030, half of today’s jobs will be gone. That’s not a gloom-and-doom prediction, it’s a wake-up call for leaders (especially those in HR) who must build a workforce with the skills for tomorrow’s work. Our once exemplary school-to-work educational system is marginally adequate in that regard. Less than half of the new jobs will require a college degree or professional certification, but every position from now on will require workers to use digital information in making routine decisions.

    Tomorrow’s Jobs.  Will we run out of people who can do tomorrow’s jobs. Of course not. But it will be a challenge to find workers with the right skills. Basic engineering, sales, accounting, business and people management skills will always be needed, but consider how these advances will change even those core functions:

  • Asset Sharing. This new way of working and living is disrupting business models. New skills are needed for corporate sharing managers and shareability analysts who evaluate operations to identify shareable assets and administer sharing agreements.
  • Big Data. Social media, an Internet-of-things, security systems, and blogs are generating huge amounts of data that must be stored, interpreted, and acted upon; which will require skills for opportunity identification, garbage-data reduction, and privacy guardians.
  • Bio-Factories will produce seeds, substances and organisms that are too complex or too risky to grow in nature – thus creating demand for urban agriculturalists, gene manipulators, plant monitors, and treatment specialists.
  • Driverless Vehicles. Within 10 years, autonomous vehicles will deliver groceries, packages and people virtually anywhere. But will today’s professional drivers have the skills required to dispatch deliveries, analyze traffic, operate drones, or restore order when things go awry?
  • Avatars. Robotics and social media are merging in two-dimensional avatars and mobile robots that will be nearly indistinguishable from humans, which will create the need for virtual reality architects and avatar relationship managers.

How will these advances affect what your organization does, how that work gets done, your career, and the skills required in your workforce?

    Will Your Workforce Be Ready?  Most organizations respond well to the impact of emerging technologies on products and services, but few adequately consider the impact on their workforce. The effects of new technologies on the workforce are barely noticeable in the short term, yet they gradually erode productivity in organizations that cut their training program – or don’t have one to begin with. Workers are running a race between education and technology and, in many cases, they are falling behind. The chasm between governmental policies that aim to preserve existing jobs and the private sector’s use of technology to improve productivity and reduce payroll costs is an economic paradox that is not widely recognized.

     Skills Apocalypse in Your Organization?  Systems thinking, problem analysis, and teamwork skills are essential for success, but are rare in the curricula of today’s corporate training programs and formal educational systems. Technology is dividing people and organizations into two groups: winners that are proficient in technology and losers that are replaced by it. The first group is prospering, while the second gradually declines or finds themselves underemployed. Which group will you and your organization fall into?

Posted by: dstieglitz | June 25, 2014

Your Leadership Impact

 “Motivation is everything. You can do the work of two people, but you can’t be two people.

Instead, you must inspire your people and get them to inspire their people.”   Lee Iacocca

      The Department of Veteran Affairs (VA) is the latest federal agency to make headlines for abysmal performance. But Congress’ rush to fire VA officials because of management failures at veterans’ hospitals and the White House’s promises of accountability are like a broken record. We heard the same script after the IRS tea-party affair, DHHS HealthCare.Gov debacle, State Department Benghazi massacre, Justice’s investigation of journalists, and DEA Operation Fast & Furious – just to name a few. According to the Partnership for Public Service, just 46% of government civilian employees “feel a high level of respect for their leaders.” So VA isn’t a Shinseki problem, it’s a leadership issue at the Presidential level and in Congress – arguably at the top of the list of organizations least accountable for performance.  Do similar incidents happen in your company?

     Crisis of Leadership.  You can spot a leadership crisis by listening to those in positions of power. While there is no one-size-fits-all leadership style, the tell-tale sign of dysfunctional leadership is that followers fail to perform ethically and deliver top results. Leadership isn’t a speech or lecture – leaders don’t talk at people.  Leadership isn’t about the leader – it’s about results their people produce.  Many of today’s leaders, especially those in politics, are enamored with ideological rhetoric and forget that their job is to solve problems, not jump on the bandwagon to chastise workers.

     Build People Up.  Good leaders build people up, not tear them down. At one time or another, most of us have had a boss who made us feel like garbage. He was so immersed in his own thinking that he smothered ours. We had difficulty learning because he kept telling us exactly what to do. While we were motivated to work hard at the start, when our ideas were ignored we had to resist the urge to mentally clock out. On the other hand, effective leaders build people up by melding their individual ideas and skills into a cohesive team. Each person feels important, and they are!

     Lead By Example.  We learned leadership by watching those who lead us. Usually the lessons were constructive and we copied leadership traits that worked. Other bosses taught us how not to lead, and sometimes the line between the two was blurred. How do you tell if your leadership impact is positive or negative? Here are a few signs that your style is working:

  • People use your logic when they explain things to their people
  • People choose to work for you and decline other opportunities
  • People say their success came, in part, from what they learned from you.

Similarly, the following indicate that your leadership style may be having negative impacts:

  • Your people cease their conversation when you approach
  • Your people avoid delicate and controversial subjects
  • Your turnover rate is higher than industry average.

Leaders don’t tell people what to do, rather they help people identify and eliminate impediments to progress. By asking the right questions, you encourage learning by your team and often learn a lot yourself.

        Dealing with Dysfunctional Behavior. Few things erode productivity faster than dysfunctional behavior. If missed commitments, finger pointing, whining, and the like are normal among your co-workers, you must change the environment. Just don’t allow it! Anytime you see or hear one of those behaviors, stamp it out. Privately tell the troublemaker that his or her behavior is damaging the team and is unacceptable. If the behavior occurs during a meeting, ask repeat offenders to leave. You’ll be amazed how quickly such rebuffs change a group’s behavior. That doesn’t mean you should squash complaints – quite the contrary. But there is a constructive way and a destructive way to address poor performance. Making oneself look good by making others look bad is destructive. Offering new ideas to improve results or correct poor performance is constructive.

        Your Leadership Impact. As a leader, you impact people in three dimensions:

  • Intellectually by guiding the possibilities and priorities they consider
  • Behaviorally by drawing and consistently enforcing the line between acceptable and unacceptable actions
  • Emotionally by helping people feel positive about themselves and the organization.

The first two – how a leader sets direction and acts as a role model – get a lot of attention. But in addition, be conscious of how you make people feel. Do you empower or drain them? Of the three dimensions, emotional impact is most essential to leadership because if you frustrate, annoy or anger people, your ideas are unlikely to be adopted and others won’t change their behaviors no matter how right you are. In other words, if you don’t influence people emotionally in a positive way they won’t follow you. How are your people feeling right now, for example?

Posted by: dstieglitz | April 30, 2014

THE END OF MOORE’S LAW

“Innovation separates leaders from followers.”  – Steve Jobs

     Moore’s Law says that the density of transistors on integrated circuits – and therefore computing speed – doubles every two years. But Gordon Moore himself, Intel’s founder and author of the law, warned “It can’t continue forever. At some point we reach fundamental limits.” But that doesn’t mean innovation will slow – quite the contrary. Futurists say innovation in this century will dwarf innovations of the 20th century. Advances in synthetic life forms, exotic materials, connectivity, robotics, data analytics, and energy distribution (for example) will far exceed innovations in computing. Is your organization prepared for innovation on a grand scale? Are you?

     Waves of Innovation. Waves of innovation will create products and services that are as far beyond our imagination as the Internet was beyond Thomas Edison and Alexander Graham Bell’s imagination in 1914. They used innovations in electricity and communications to build industrial giants that changed the way we live and work. Innovation in the 21st century promises a sustainable future that produces more food, energy, and consumer conveniences using progressively fewer resources and with much lower environmental impacts.

    Instincts Drive Innovation. Since the Stone Age, innovation has been driven by man’s basic instincts: survival, fear desire, and competition. Those instincts are still at work today:

  • Survival. The Earth’s population will pass 8 billion by 2020 and 9 billion by 2040. Innovation is essential to provide enough clean air, pure water, food, shelter, and health care.
  • Fear. The omnipresent threat of terrorism and crime will drive innovation in security devices way beyond today’s surveillance cameras, intrusion alarms, and defensive weapons.
  • Desire. The Internet has enlightened everyone to the best things available on the planet – everyone wants the best of everything.
  • Competition. Virtually instantaneous reporting of economic breakthroughs pushes businesses as well as governments to deliver better and cheaper services and products.

Furthermore, rising expectations in developing countries and a growing cadre of senior citizens are a major force in innovation – and both groups have the money to pay for what they want.

    Whole New Industries. Entrepreneurs will apply innovations to create new industries, build new facilities, and provide billions of new jobs – although many of today’s jobs will disappear. Consider the following boutique industries that will blossom from novelties today into widely embraced products and services in the next decade:

  • Pure Water. Next to the air we breath, water is most vital for mankind’s survival. Today’s water supply systems deplete rivers and aquifers. It’s likely that desalting seawater into potable water will become big business – possibly even exceeding today’s fossil fuels industry.
  • Food Engineering. Genetic advances, drip irrigation, and other innovations will produce crop varieties that resist freezing and can be irrigated with saltwater, thus converting wastelands into high-yield, sustainable farms.
  • Energy. By the end of the 21st century fossil fuels will be a minor energy source behind wind, solar, ocean tides, geothermal, and other sources we haven’t thought of yet.
  • Driverless Transportation. Highways will be traveled by computer-controlled cars, buses and trucks while humans drive vehicles only for recreation. Robo-taxis will take people to work, supermarkets, malls, supermarkets, and doctors – any place they want to go.
  • Garbage. There will be no such thing as “garbage.” Recycling plants will convert 100% of what we now call waste into reusable materials using innovations akin to alchemy.
  • Connectivity. With sensors imbedded in everything from walls and floors, to appliances and tools, to animals and plants, the “Internet of Things” will disrupt one industry after another and shift economic value from physical goods to tools that collect and analyze data.

The 20th century’s breakthroughs in information processing, automation, and communications will seem primitive in comparison to what lies ahead.

    Challenge of Innovation. If you’re in an industry with rampant innovation (e.g., cyber-space, health care, or energy), your challenge is to create and market products and services that customers may not understand or know they need. And if you’re not in one of those industries, your organization could face extinction. In either case, your continued prosperity in a world of innovation depends on your ability to:

  • Recognize trends and incorporate them into your strategic plans
  • Understand how organizations connect to help each other succeed
  • Question and be open to being questioned about assumptions
  • Engage diverse personality styles to promote innovation
  • Ask probing questions and genuinely listen to the responses
  • Create an environment that fosters collaborative thinking, and
  • Value what others say – especially if their perspective is unique.

Use these methods to create a culture of innovation that gathers, shares, and acts on ideas and knowledge inside your organization and across your industry.

Posted by: dstieglitz | March 31, 2014

Crowd-Sourced Leadership

Sid, a division president with 30 years in the firm, described an enlightening experience: “During a meeting one of my 20-somethings – who was invited only to learn – injected a new idea during tense negotiations with a strategic supplier. At first I was angry because his participation was unexpected and, frankly, unwanted. But the supplier loved the idea. Later, I realized the idea was very creative. It let us conclude negotiations and secure a long-term contract.” In the world where Sid grew up, concealing information demonstrated power, and creativity was top management’s job. Even though Sid succeeded in that environment, the meeting with the supplier changed his thinking: “Now, before each critical meeting I hold a brainstorming session with people at several levels. I challenge them to bridge generational gaps and break down silos by leveraging each other’s experience and knowledge.”

     Crowd-Sourced Vision.  In the past, the workplace blended three generations – the old, middle-aged, and young – in a hierarchical structure. Similarly, today has the Baby Boomers (those born between 1946 and 1964) with colleagues from Generation-X (born 1965-1983) and the Millennial generation (born 1984-2002). But those generations have a wider spread in work ethics and technological skills. Organizations must seek common ground in a shared vision, a picture of the future that offers an enticing role to each person. The younger generations expect to have substantial input to a crowd-sourced vision, a concept that is unfamiliar to older executives especially those in government.

     Leadership at All Levels. Organizations that are bonded by a shared vision don’t operate with leadership solely at senior levels. Instead, leadership springs from the vision itself – objectives that everyone commits to wholeheartedly. The vision flourishes despite retirements, virtual office arrangements, and other changes in how people manage careers. The changing of the guard has as much to do with the Baby Boomers’ evolving priorities as with the teamwork of Gen-Xers and lofty expectations of Millennials. Organizations that cultivate a shared vision will thrive because they attract and retain the best and brightest from all three generations.

     Age Inversions – Who Changes? The shift toward workers reporting to younger managers raises several issues. It is ineffective for Baby Boomers and Gen-Xers to push Millennials to work like they work. Similarly, Millennials must get over their umbrage at being called the ADHD generation and become effective in inter-generational communications. Despite their reputation as wanderers, when Millennials find an organization that offers rewarding work and growth, they participate actively and stay. Actually, Millennials are just asking for things that everybody wants. They don’t want to work 40 years and then enjoy life – they want satisfaction from the work they do today.

   Making Diversity Work. Making multi-generational diversity work (and other kinds too) is crucial to success in this globally-connected world. It’s not diversity itself that matters. Rather it’s how you lead a diverse workforce to achieve their goals. There is no cookie-cutter approach – few practices work equally well in the U.S., Europe, China and, say, Brazil. Yet, diversity must be at the core of every business strategy because diversity in the customer base is expanding as rapidly as it is in the workforce. When you look around the table at your next meeting, you’re likely to see colleagues from multiple generations as well as various races, religions, physical abilities, and sexual orientations. You and your team must embrace that diversity in order to develop and deliver products and services that remain in high demand – your future success depends on it.

Posted by: dstieglitz | January 29, 2014

WHAT’S HAPPENING IN YOUR ORGANIZATION?

“I start with the premise that the purpose of leadership is to produce more leaders, not more followers.”  Ralph Nader

When asked about the health-care website crash, President Obama said: “I didn’t write the code.”  Nor does anyone expect him to – but leaders are expected to build organizations that get things done.  Even after five years in power, the Obama administration’s weak leadership conversations at times leave the President knowing too little about things that matter most.  In addition to the website fiasco, Obama says he was unaware that the NSA eavesdropped on world leaders or that the IRS applied extraordinary tax scrutiny to conservative groups.  Like many executives, Obama prefers an inspirational speech to building a plan, and relishes sweeping reform more than incremental change.  These situations raise doubts about whether Obama knows what is happening in the federal bureaucracy he manages.  Does he routinely get the information required to lead?  Is he asking the right questions?  Do you?

Same in New Jersey.  Like Obama, New Jersey Governor Christie also endured the worst month of his five years in office.  Christie claimed not to know that his top aides intentionally created massive traffic jams by closing access lanes to the George Washington Bridge as political retaliation to a local mayor.  He immediately fired the aides but the incident raises doubts about his ability to assemble a leadership team.  Even if Christie didn’t participate in the lane closures or the cover-up, he failed to build a culture where everyone knew that politically motivated actions were unacceptable.

What’s Happening Inside Your Organization?  Do you really know?  Is it necessary for a leader to know everything that’s happening?  Unless you lead a small organization, the answer to the last question is: “No. It’s impractical and inefficient to know everything.”  When you give your people specific goals, clear decision criteria, and unwavering principles to guide their actions, you don’t have to know everything that is happening because it will happen according to your standards for what is appropriate.

Baseline Conversations.  The standards you set must balance the competing demands of growth, profitability, social responsibility, and learning.  Tell your people what you expect relative to collaborating with others, environmentally sustainable practices, and accepting the often higher cost of those two approaches. For example, one business owner assigned a top performer to sell a new service.  A few months later, he complained “she’s not doing a good job.”  When asked what constituted a good job, he stammered and said: “I don’t know. I just expected more than I’m getting.”  The baseline conversation that ensued set monthly goals, defined innovative service strategies, and allocated promotional resources.  When the goals were achieved, he said: “She’s the best promotion I ever made – especially now that I’m a better leader.”

An Ocean of Information. Like President Obama, Governor Christie, and almost every other executive, you are afloat in an ocean of information.  Each day you struggle to separate the useful from the irrelevant in the information tsunami.  Just as you seek a healthy food diet, you must refine your information diet to focus on decisions about the most critical matters.  Making information choices is difficult today because of the increasing number of web sites, emails, blogs (like this one), books, and other sources of information.  One way to obtain actionable information is to ask the right questions.

Asking Questions.  Asking questions doesn’t come naturally.  Executives are usually more comfortable telling people what to do.  Obama and Christie, for example, should have asked probing questions of their key aides to determine what was really happening in their organizations.  Our academic training hard wires us to answer questions.  Teachers asked questions and our success was measured by how well we answered them.  And when we entered the business world, supervisors were more directive than inquiring.  Ask the hard questions of your people and encourage them to do the same to you. When you feel that you know all there is to know, there’s at least one more question you can ask: “What other question should I ask?”  That question often elicits overlooked information that modifies decisions.

Leadership Accountability.  The questions that leaders ask define goals, clarify decision-making criteria, and set boundaries for acceptable behaviors.  Ask yourself: “To what extent do I and other executives follow the rules and hold each other accountable to those rules?”  For example, if a leader doesn’t want subordinates to make politically motivated decisions, then his decisions shouldn’t be politically motivated.  Industry leaders have special challenges in this area because they operate in uncharted waters.  Their people must make on-the-spot decisions when circumstances are radically different from past experiences. Nonetheless, they must be held accountable for results of those decisions.  As a leader, your job is to build a culture that holds people accountable for results and the criteria they use to make decisions. 

Clear Communications.  Under most circumstances, your key people do what they believe you want them to do.  If you have communicated clear guidelines, you can be confident that things will be done in the prescribed manner.  For example, Obama’s appointees and Christie’s aides thought they were doing what the boss wanted by making life difficult for political opponents – they mimicked their bosses’ behavior.  Since you communicate with more people, more often, in more ways than ever before, your conversations must include probing questions and clear guidelines.  You don’t need to know everything that is happening in your organization, but you should know the guidelines your people will use to make decisions and take action when you aren’t there.

Posted by: dstieglitz | December 19, 2013

2014 – AN UNCOMFORTABLE YEAR

“The ultimate measure of a man is not where he stands in moments of comfort and success, but where he stands in times of challenge and controversy.”  Martin Luther King, Jr.

     Happy New Year.  At least I hope 2014 will be happy for you and your organization. What is your strategy to make it so? As 2014 begins, are you dealing with new challenges or advanced versions of the same ones you faced last January? Do tight budgets, intense competition, and new technologies still worry you, or have you adjusted your business model to embrace those realities? 2014’s challenges are likely to push you and your organization well beyond your comfort zone. You will feel pressured to change your services, products and business practices in order to survive.

Status Quo.  Status quo may have been a reasonable strategy in decades past, but it is a death spiral today. Companies that try to maintain status quo – Barnes & Noble and RIM/Blackberry, for example – quickly fall behind the ones who create change. Status-quo organizations react to changing markets and financial priorities by working harder under their old business model. On the other hand, growing companies include change in their business plan. No matter which you choose, the world around you will continue to change in 2014.

Comfort Zone vs. Learning Zone.  Everyone has a comfort zone – you, your people, and your customers. The zone expands over time as you face changes and embrace the lessons they deliver. The zone is comfortable because you know what to do – you’ve been there before. Minimal learning occurs in the comfort zone because status quo is the standard. When you change, you leave the comfort zone and enter the learning zone, a heightened state of awareness. Effective leaders operate in the learning zone to grow their organizations. Tip: Do two things this week that you’ve never done before and ask each of your people to do at least one thing that stretches their comfort zone

Leadership begins at the edge of the comfort zone.   Psychologists say that humans are more motivated to avoid pain than to seek pleasure. Therefore, to achieve success you must conquer the natural resistance to the part of change that is painful. The barriers to change are like electric fences that confine animals: to get where you want to go, you may have leap through the barrier and endure pain. Successful leaders don’t waste precious time trying to avoid the pain of change. Rather, they make change a habit in their organization and their personal routine. Make your people a bit uncomfortable with the results you ask them to achieve in 2014.

Embrace Doubts.  When you lead a change, people will expect you to be the expert even if you are not. At the start, the goal may lie beyond your people’s comfort zone and their enthusiasm may be diluted by doubts and fears. Your people expect you to understand their feelings, to tap into their highest potential, and to help them become a winning team. Encourage them to embrace their feelings and to understand that the team’s objective is bigger than any one person can accomplish. Your job as the leader is to get people to align and perform together at an optimal level.

Rapid Change Provides Opportunity.  One sure-fire strategy for success is to drive new ideas and positive change in your organization and your industry – invent the future. Interestingly, rapid change has a silver lining: new ideas can be tested at a cost and speed that were unimaginable in the Industrial Age. Days after introducing a new service or product on the Internet you will know if customers like it. The effects of process and technology changes on productivity can be measured almost as quickly. Innovations that once took months and millions of dollars to implement can be launched in hours for a few dollars. That makes innovation, the heart of change, inexpensive and efficient.

Take Action.  The only strategy that can succeed in an environment of increasingly unpredictable change is one that causes or adapts easily to market shifts. In today’s changing world, you don’t need more information to succeed, you need more action. Don’t wait for the perfect time or perfect plan. Now is the time to respond to the changes you are seeing. Take a small action and follow it with another. The new action may not work well at first, but don’t waste time looking for the ideal solution because by the time you find it the world will have changed again. Push your people into the uncomfortable learning zone and coach them to success.

Posted by: dstieglitz | November 29, 2013

DISRUPTIVE TECHNOLOGIES

“The task of a leader is to get people from where they are to where they have never been.”  – Henry Kissinger

      McKinsey Institute projects that by 2030 disruptive technologies like mobile computing, 3-D printing, robotics, an Internet of things, and DNA engineering will eliminate more than 2 billion existing jobs – that’s about half of all jobs on Earth. Entire industries will disappear. On the other hand, McKinsey says the technologies will generate over $30 trillion per year in economic activity and billions of new jobs. But the new jobs will require skills that are in short supply today. Our business plans and political debates should focus on that skills deficit rather than the budget deficit.

Third Industrial Revolution.  The first industrial revolution began in textiles and agriculture during the 19th century. Tedious tasks performed in weavers’ cottages and farmers’ fields were mechanized. The second revolution occurred in the 20th century when Henry Ford used an assembly line to mass produce autos in sprawling factories. The 21st century’s digital revolution is changing not only how products are made, but where. The nature of labor is changing and production is moving closer to customers. Factories of the future will produce customized goods in an environment more like cottages and fields than Ford’s factories. People who produce goods and services will be in continuous electronic contact with engineers, sales and marketing people, logisticians, and other experts around the world. 

    Jobs Deficit.  Today’s jobs deficit – roughly 20 million Americans are unemployed or under-employed – will get worse before it gets better. For example:

  • Driverless vehicles may eliminate millions of jobs when taxis, buses, trucks and delivery vans become driverless. That will also shrink the need for gas stations, parking lots, and traffic cops.
  • 3-D printers may be used in retail, health care, and construction in addition to manufacturing. Printed clothes and shoes could be produced while you wait in your local shopping mall.
  • Mobile devices will enable people to work anywhere, thus reducing the need for central offices and eliminating rush-hour traffic jams.
  • An Internet of things (i.e., smart systems) will connect virtually everything with powerful sensors that enable a shift from owning things to renting them when needed.

Unemployed workers don’t care why their jobs are disappearing. But leaders in industry and governments must consider these structural changes because they necessitate retraining virtually the entire workforce and retooling business models.

    Jobs Related to Basic Needs.  In addition to jobs related to applied technology, millions of new jobs will be created to fill the basic needs of an expanding and aging population. Specifically, lucrative opportunities are projected in:

(1) life sciences and health care,

(2) energy production and distribution,

(3) safe foods and clean water, and

(4) hospitality and leisure activities.

For example, demand for products that ensure safe food (e.g., smart tags, tracking systems, disinfectants, and packaging) is already growing rapidly as a result of recent food contamination incidents and new safety regulations.

Skills Divide.  Technology is dividing workers into winners and losers: those who are skilled at working with automation and those who are replaced by it. Furthermore, the gap between the skills for high-paying jobs and the typical skills of students and unemployed workers is widening. In September, the Labor Department estimated there were four million vacant positions that demand science, technology, engineering and math (STEM) skills. For example, manufacturing vacancies require workers who can set-up, operate, and maintain smart equipment. There’s also a shortage of entry-level workers with basic STEM skills such as the ability to read and follow a basic blueprint.

Building Jobs Pipeline.  Technology has changed the way every business and organization operates – but the speed of the change is being taken too lightly. Building an education-to-employment pipeline that connects people to good jobs over a lifetime will require policy changes, educational reform, and public-private partnerships. Educational institutions, businesses, and governments seem to be stuck in 20th century thinking – the same can be said of unions, associations, and civic organizations. The rising skills bar is pushing businesses to home grow talent to stay competitive. But businesses can’t meet the challenge alone.

Can Washington Keep Up?  Consumers are enthusiastically adapting to the Internet age of on-line purchases delivered quickly and cheaply. Private-sector companies are also adapting because the market severely punishes those who are slow to change. The same is true for the military except the stakes are literally life or death – which is why many technologies sprout in military applications. However, Washington is struggling to understand the new world, let alone enact relevant rules in a timely way. Government would do best to stick to fundamentals: better schools and worker training, a level playing field for entrepreneurs, and modern infrastructure to support commerce.

Disrupt Your Operation.  Leaders must be willing to disrupt current operations in order to take people where they have never been – an especially daunting challenge for government and successful businesses. Disruptive advances require businesses and governments to coordinate their initiatives. Washington should incentivize state and local governments and businesses to train future employees and sharpen workers’ skills. Industry should collaborate with communities to create vocational programs and offer internships for high school students and unemployed workers. Educators should push every student toward STEM learning to ensure they are not replaced by machines but instead learn how to use and maintain them. And students should teach their elders how to integrate social media into daily activities. Those who lead the change and adapt to the change will prosper. Those who don’t, won’t.

 

Older Posts »

Categories