I do struggle a little with my conscious. Yes, I’ve been called a pretty hard nose professor who pushes his students. I tell my students I have a low rating on empathy and mercy when it relates to missing my deadlines.
However, even the meanest Scrooge would have to have compassion for over 15 million unemployed in America. But—it becomes personal as you hear about your neighbors, co-workers, and family members who have been laid off.
Financial institutions and other businesses hold on to their record profits for the ultimate use of their money. Politicians call them job creators which is ironic since businesses primary motives are to make a profit, not give someone a job.
Companies chase emerging markets abroad. According to government estimates, an additional 1.2 million manufacturing jobs will disappear from America by 2018. If in the process a job is made, those are secondary considerations.
Only when business subscript to a business strategy that involves value creation can they hope to sustain profitability. In this paradigm workers are viewed as assets not liabilities.
Yet, many companies build their profitability on this simple equation. Companies seek to reduce their inputs (outsourcing labor, better technologies) to obtain ‘more profits.’ Yet, it’s pretty self-serving with little regard to customers and employees.
The definition of value depends on the individual. For this discussion, value is defined as the net bundle of benefits the customer derives from a product of service. Value is defined as the net bundle of benefits the customer derives from a product of service. Most companies compete on low cost or differentiation strategy to create this value.
In emerging countries where wages are low, it is very difficult for America businesses to compete. That is why many companies have opted to outsource some of their core functions abroad. Yet, America’s strength has always been its innovation and creativity. These attributes are key ingredients for an effective differentiation strategy.
John Gamble and Arthur Thompson, authors of Essentials of Strategic Management, further examined the concept of value as a strategic advantage: “The most appealing approaches to differentiation are those that are hard or expensive for rivals to duplicate.” Therefore, an effective value creation strategy can beat almost any competitor, globally and domestically.
This reality is due to the fact that the organization is keenly attuned to the needs of their customers. If individuals keep the concepts of value creation in their mindset, they will be able to overcome many of the disruptive changes to come.
How does value creation relate to sustainability for today’s leaders? Discuss your professional experience with value creation.
American children sing “We are the world,” but the world does not listen. Children in Iran burn American flags. Children in Iraq throw stones at American soldiers. Children in China write hateful essays about the “evil” American ways. American politicians attempt to spin how third world countries embrace Western ways while the terrorist alert is heightened to acknowledge another international threat. Increased globalization has elevated the risk at the domestic and international levels for US government military and civilian personnel.
According to the Forrester Research, approximately 3.3 million U.S. jobs and $136 billion in wages could be moved overseas to countries like India and China by 2015. Therefore, many organizations will need to change their strategies in order to meet the international challenges ahead.
Let’s look into the future. Many developing countries will continue to grow strongly over the next decade. In fact, these countries steadily shift to consumer-led growth instead of export-led growth. The dollar spirals downward and foreign currency goes upward. China and India have added millions to their labor force creating products as well as outsourcing their services abroad at a fraction of what American workers can provide.
These upstart countries are positioning themselves to become the next Super Power. For example, China passed Japan as the world’s second-largest economy. According to the World Bank estimates, China could surpass the US by 2020. China’s gross domestic product (GDP) spreads across 1.3 billion people ($3,600 per person) while the US GDP covers a smaller population ($42,000 per person). Yet, China will continue to fuel the world’s economy due to its thirst for raw materials and products in order to meet its own demand.
Globalization continues to transform our organizations. Today, many American businesses have a global focus. The S&P 500 companies now generate 46% of their profits outside the US. In fact, some of the largest companies are higher. For example, Coca-Cola has become a very successful brand abroad, with operations in 206 countries. Over 80% of the company’s revenue comes from abroad. Coca-Cola CEO Muhtar Kent explains, “We are a global company that happens to be headquartered in Atlanta.
Do the math! American businesses are headed offshore for increased profitability. Companies gain from this foreign exodus the benefits of accessing more lucrative markets, new technologies, easy credit, and quality, cheap labor. When American businesses cut jobs, it has impacted the standard of living for today’s families.
Columnist Fareed Zakaria highlights the dilemma: “Capital and technology are mobile; labor isn’t….And this is a country with one of the highest wages in the world, because it is one of the richest countries in the world. That makes it difficult for the American middle-class worker to benefit from technology and global growth in the same way that countries do.”
Economist pundits and political opportunists paint globalization as the best thing since sliced bread yet hide the realities of global competition from the general public. The forecasted outlook for the full-time worker is bleak. Clearly, technology and outsourcing are making the contingent (temporary) and other forms of flexible labor (independent contractors, on-call workers, temporary help agency, part-time, and contract workers) a reality for future employment opportunities.
As a matter of fact, Charles Handy theorized that unemployed or spare workers would create their own new work in the future. Business executives express little moral remorse as they keep American workers at bay. Therefore, a different type of U.S. business model will need to be developed for global competition in the near future.
How do US organizations compete globally with the realities of outsourcing and create an American labor force that is clearly energized and motivated in the process? What will happen to the quality of life for the middle class as global averages impact American wages?
Another holiday season has come. After the presents have been given and the year comes to a close, many people will reminisce about the past year. Sadly, some people’s lives will be filled with many defeats, broken relationships, and unfulfilled dreams. These may setbacks may be relatively minor in nature (Pastor Richard S. Brown of Knoxville notes, “For many people, the holidays season bring great pressure and stress…We stress that we can’t get everyone something for Christmas?”) or they may be much more serious. Every year I run across individuals who have lost hope.
Unemployment continues to rise while self-confidence of individuals continues to falter. In my book Breaking Organizational Ties, I provided strategies for individuals caught in jobs they despise and showed them how to possess a more fulfilled life. The holiday season can leave many individual depressed and bitter. This article examines how individuals can overcome past failures this year and retool their minds during the holiday season.
The economic crisis deflates the concept of perseverance. According to the U.S. Labor Department employers added only 39,000 jobs in November, which is a sharp decline from the 172,000 created in October. With a weak economy, the unemployment rate has soared to 9.8%. The current trend of above-9% unemployment rate has surpassed the previous record. Over 15 million people are unemployed. A further 17% are under-employed. And there were a record 1.3 million “discouraged” workers in November. Discouraged workers are individuals not currently looking for work because they believe no jobs are available to them.
Given these statistics, good cheer may be harder to come by this year, making those “holiday blues” even more of a potential problem. According to a Mayo Clinic study, optimistic individuals report a higher level of physical and mental functioning than pessimists. Your perception colors how you view life. Can healing begin with the right kind of attitude?
Depression can develop for anybody. Christian Maslach and Michael Leiter, authors of The Truth about Burn-out, note that stress can burn out individuals and impact their mental state. In fact, many people are succeeding in the corporate environment while failing miserably at their personal relationships. If you are human, you will experience some disappointments. It doesn’t take a genius to understand how someone can get depressed. Some call it a “Pity Party.”
You become engulfed in your own self-pity—you figure you got it bad. Can anyone hurt as much as you? During the holidays, some people are left alone to face the realities of life. This period can bring much unhappiness. Some people, however, manage to snap out of depression while others get too consumed in it and take harsher actions such as suicide. Don’t let yourself down. Take action.
The following are a few strategies for beating the blues: (a) Put things in perspective. Everyone has experienced some setbacks in life. God is not singling you out; (b) Maintain a good attitude; (c) Establish a strong support network. A positive environment will help you get through; (d) Talk to a good listener. Get it off your chest; and (e) Find a purpose for your life.Ex-Dallas Cowboys player Larry Robinson explains, “The awesomeness of who we are, has nothing to do with where we work or what we do.” With this in mind, many people will need to implement a different strategy for next year.
Highly successful people know how to retool their minds despite life’s many set-backs. Last year, many people over-promised and underachieved on their goals during the economic crisis. Certainly, depression set in for some of the 15 million unemployed Americans, causing some women to grow weary and some men to grow angry. For millions of individuals, a pity party was a regular affair.
Historically speaking, self-pity is nothing new. Even the prophet Jeremiah complained to God about the unfairness of his situation. God spoke to his concern: “Jeremiah, if you get tired in a race against people, how can you possibly run against horses? If you fall in open fields, what will happen in the forest along the Jordan River?” Likewise, individuals must be persistent during the current economic crisis and a good outlook goes a long way. Your attitude will greatly impact how you retool your life so that you can be successful in the future.
If I had a magical organizational wand, I would turn old toady CEOs into beautiful princes and princesses who champion the causes of their workers. Unfortunately, there’s not enough magic from Oz to convince most executives that today’s workers are more than mechanical parts to their profit machine. During this discussion, we will explore the concept of knowledge workers in organizations.
Some employees feel they are often undervalued and unappreciated by their managers. For example, my friend, Stan, is a very intelligent person in spite of not attending college. He accepted a new job as warehouse operator. Because of downsizing, he became the only person in that department. Stan created his own cataloging system without a computer. That was impressive.
When Stan was up for a raise, he asked for more money. His supervisor explained that it couldn’t be done. My friend countered that he had optimized their warehouse systems, and the operations depended on his knowledge. His supervisor knew it was true because when Stan wasn’t there, no one could find anything.
Stan got what he wanted. He had become a knowledge commodity. This represents the revolution of knowledge workers on the traditional organizational structure. Therefore, if today’s leaders don’t adequately manage the knowledge workforce, they will be at a competitive disadvantage.
Knowledge workers are a critical commodity. Gareth Morgan, author of Imagination, argues that contemporary use of organizational charts and diagrams are major tools for restructuring. However, this creates a false sense that a new organizational chart can solve all of the organization’s problems. Modern-day bosses feel that “top down” management is best. Clearly, they are mistaken.
Georg Krogh, Kazuo Ichijo, and Ikujiro Nonaka, authors of Enabling Knowledge Creation, maintain that knowledge management (KM) is not one person’s job; everyone in organizations can play a vital role in transferring information. As a rule, an organization’s knowledge and capacity building depends primarily on its human and social capital. In most contemporary organizations, technology can be a critical tool in supporting the knowledge work.
Yet, knowledge workers create and capture information for the management of knowledge. In fact, KM is performed by individuals who belong to communities of interest where knowledge is shared and accumulated. Therefore, effective management of today’s operations depends on talented and gifted knowledge workers.
How do today’s organizations better engage knowledge workers due an era of sweeping layoffs and outsourcing?
When I wrote my first book, My Cup Runneth Over: Setting Goals for Single Parents and Working Couples, it took me two months to write and less than a year to get published (it normally takes 18 months to three years to get published). People were amazed at my publishing accomplishments.
My world was transformed, from being a little unknown engineer in Tennessee to being a respected expert and quoted by USA Today and Ebony Magazine. It provided a great avenue for influencing others across the country and the world. Additionally, it provided me with a more diverse portfolio of passive income and revenue. In the greater scheme of thinking, I found out that my new platform was centered, not on the physical book—but on the creation of intellectual assets.
As organizations contend with global competition, many businesses will need to rethink their strategies for sustainability in the knowledge and innovation economy. Across the nation, companies are depending more on freelance workers.
According to the Bureau of Labor Statistics, the number of workers placed by temporary staffing agencies rose by 404,000 since September 2010. Furthermore, many gifted, laid-off workers are forced to become independent contractors and freelancers. According to the Freelancer Union, 18% of its members were forced to give up health insurance in 2009 while 39% cut back coverage. This trend is reshaping America’s workforce.
Yet, value creation will be the key to opening endless opportunities for today’s businesses. We complain about the rate of manufacturing jobs going abroad and how this reality impacts the quality of living. Perhaps the future will be ruled not by the tangible but the intangible. In fact, the knowledge economy will wreak havoc on traditional thinking.
Thomas Davenport and Kevin Desouza, intellectual strategists, argue the importance of organizations understanding their intellectual assets: “In the industrial economy, a key component of mass production and productivity—and hence economic growth—was the reuse of physical assets: molds, templates, castings and so forth. Although so much of the economy is now based on intellectual assets, we have yet to achieve a similar level of reuse and productivity improvement for that class of asset.” In this discussion, we will look at how intellectual assets will fuel the future.
Henrik Vejlgaard, author of Anatomy of a Trend, argues that emerging trends are influenced by gifted people, including entrepreneurs, designers, and artists. Vejlgaard notes that these people “create new products or invent new styles or begin doing something in a completely new way.” In the old days, creative people were the butt of jokes pertaining to finding sustainable employment.
Yet, the future will belong to just these people, as many organizations across the world will need this asset to enhance their survivability. Fueling the knowledge economy will be knowledge creation (intellectual asset creation) and knowledge management (intellectual asset management).
An important ingredient for the knowledge economy is the creation, use, storage, and positioning of an organization’s intellectual assets. Intellectual assets are valuable elements created by human ingenuity: written documents, software, musical compositions, and other intellectual spin-offs. Intellectual assets can be divided into two categories, product assets and process assets. Product assets are the specific outputs of knowledge work such as software programs or legal briefs.
In contrast, process assets are codified knowledge about how to perform a task such as manufacturing steps for a new product. Some countries have already realized the critical value of intellectual assets. In May 2004, the Ministerial Council in France studied how intellectual assets impacted value creation, growth, and economic performance. The study noted, “The continuous shift toward a knowledge-based and innovation-driven economy has brought to the forefront the issue of how knowledge is created, disseminated, retained and used to obtain economic returns.”
Intellectual assets will place individuals at the center stage of wealth creation across the globe. Today, traditional publishers struggle to stay in business as the world has been overrun by knowledge creation. Many experts will argue that the Big 6 (Random House, Inc., Penguin Putnam, HarperCollins, Holtzbrinck, Time Warner, and Simon & Schuster) dominate the publishing world. Yet, the world is changing.
According to a Para Publishing study, traditional publishers are in trouble. In 2004, more than 1.8 million books were in print. A new book is published every 30 seconds. With challenges from the global economies, digital publishing models, and industry standard changes, major publishers are bombarded with changes that impact their bottom-line. In 2002, major publishers decreased output by 5% yet titles published rose by 6%.
What is driving the publishing industry now? It is independent publishers and literary entrepreneurs emerging in this digital age. In fact, 70% of the titles are now coming from small or self-publishers. In the digital age, individuals can transform one idea into multiple formats including paper back, hardcover, MP3 files, DvD, and other downloadable files. Therefore, knowledge creators are building an empire of intellectual assets. Websites like Createspace.com and Lulu.com give individuals the power to create wealth while building influence effortlessly.
What modifications will need to be made in the publishing model to incorporate intellectual assets created by entrepreneurs? How can organizations take advantage of these gifted creators in their organizations and still fully control their knowledge management processes?
As companies after company fail in the same industry, I wonder why some organizations continue to follow the same deadly path. In most cases, it starts with managers who do not think about the consequences of short term decisions over the long haul. Sadly, hasty decisions can impact not only the individual but others around them. Several famous individuals have been impacted by this reality.
For example, Vanessa Williams was one of these fallen Hollywood icons. In 1983, Williams became the first African-American woman to be crowned Miss America. However, her immediate success was short-lived due to a scandal.
Consequently, Williams was forced to relinquish her title; she probably didn’t think her youthful deed would come back and wreck her dreams. Yet, the consequences not only damaged Williams but her family, friends, and millions of her fans. In this session, we will examine the impacts of unintended consequences.
Have you ever wondered why some people never consider the aftermath of their bad choices? Many people fail to understand the consequences of their decisions. Nobel Prize author Albert Camus once noted, “Life is the sum of all your choices.” Some people rationalize that an apology or a pitiful stare will erase all of the damages.
I hear it all the time: “I’m sorry. I didn’t mean for that to happen.” Instead of just chalking it up to immaturity or youthful ignorance, I just cannot make that case because we are often talking about adults, not children. These adults should know better, but they act without realizing the effect of their actions. In spite of all wise counsel, some people live to make poor decisions.
Fortunately, these circumstances can be traced back to a root cause. TheLaw of Unintended Consequences relate to any purposeful action that will generate unintended consequences. This law can be categorized into several areas: (a) a positive unexpected benefit called serendipity, (b) a negative effect which is contrary to the original intention, and (c) a potential source of problems which is commonly referred to as Murphy’s Law. Additionally, the outcomes are not limited to the results that were originally intended.
Here are some examples of how this law works. A new bridge is built to give a secluded community access to a nearby shopping mall. However, this action results in increased crime in the secluded neighborhood and decreased sales for the mall stores. No one anticipated these unforeseen problems.
Another example is a caring parent who smokes cigarettes around his family. One child gets asthma and eventually becomes a chain smoker as an adult. Another child obtains a phobia related to smokers. In retrospect, the caring parent would have done something different if he had anticipated the long-term consequences.
Likewise, many managers may make alternative decisions if they understand the Law of Unintended Consequences. Furthermore, today’s leaders can be proactive in their decision making by considering the long term ramifications of most decisions.
Like Murphy’s Law, some decisions may appear to afflict some people as if their lives are cursed. Unfortunately, making the right decision is a difficult process. No one will applaud your many good decisions; however, you will probably catch heat over the bad ones. As a matter of fact, some individuals continue to ride a merry ride of worsening consequences.
Yet, it is often their own lack of foresight that haunts them. Eleanor Roosevelt said, “Somehow we learn who we really are and then live with that decision.” Every person, regardless of their background or social standing, can benefit from good decision-making techniques. In this life, most people make decisions to the best of their abilities. When various things happen, especially bad ones, individuals must be ready to deal with them. Therefore, understanding unintended consequences can assist in helping make better decisions for the future.
How do organizations anticipate the consequences of their decisions? Can managers learn to make better decisions?
In the 1987 classic Movie Wallstreet, America witnessed a growing trend of the American Dream. Bud Fox (Charlie Sheen), a Wall Street stockbroker, wanted to get to the top at any cost. This short track path to riches led him to broker Gordon Gekko (Michael Douglas). Gekka was shrewd and dangerous; his philosophy was built on “Greed is Good.” Fox soon became engulfed in the glamorous life of the powerful. But—it was at a high moral cost.
Scandals may drive media ratings and turn the trivial into the most critical. However, moral decay does not help companies compete or make society a better place. We’ve discussed the socio-technical system as it relates to global markets. In building effective socio-technical systems, one needs to focus on (a) value modeling, (b) technology relevancy, and (c) human factor buy-in. With the continual ethical failures of government officials and business executives on Wall Street, many workers view ethical policies of today’s organizations with some cynicism. Do you?
A high performing organization must model its values to both first line supervisors and managers in a socio-technical system. Many organizations expect employees to understand its culture, values, and principles by attending new employee orientation or by reading a company brochure. This is simply not going to happen.
Vince Adams, who has over 19 years as senior environmental manager, understands the delicacy of balancing a socio-technical system. Adams has extensive experience with both government and private organizations that are find themselves neglecting to outline and demonstrate their value systems to employees. Adams states, “Companies must build values into their employees so that employees know what the expectations are for that organization.”
James Kouzes and Barry Posner, authors of The Leadership Challenge, have researched over several thousand businesses and government executives and they outline setting the example as a critical attribute of effective leadership. Kouzes and Posner argue, “Once people are clear about the leader’s value, about their own values, and about shared values, they know what’s expected of them and can better handle the conflicting demands of work and personal affairs.” Therefore, employees expect leaders in organizations to model the way in their organizations, and this is also true for socio-technical systems.
Is it possible for today’s managers to regain the confidence of workers on the ethical front? If so, how
I listen to chatter over the airwaves. Talkshow host Armstrong William leads a merry discussion on South Carolina’s Governor Mark Sanford. Armstrong cannot contain himself: “How does Governor Sanford get rid of his Love Jones?” It was a question that was not easily answered. Listeners from South Carolina appeared irritated with this line of questioning.
Many felt the governor had abandoned his wife, children, and the people of South Carolina. On June 24th, Governor Sanford arranged a press conference where he confessed a year-long affair with an Argentine woman. He was missing for more than six days from his office.
At his press conference, political pundits argued Governor Sanford was attempting to save his job, not his family life. He was married and had four sons. Instead of a low-profile strategy, Governor Sanford actively engaged the media, describing his mistress as his “soul mate.” Clearly, he had lost his mind! His wife Jenny stated, “I believe enduring love is primarily a commitment and an act of will, and for a marriage to be successful, that commitment must be reciprocal.”
Unfortunately, Sanford’s decision ruined his political career, strategic alliances, and the trust of the people of South Carolina. Yet, his personal loss was perhaps greater. He lost his marriage and the trust of his children. Therefore, some decision making carries long-term consequences for individuals and organizations.
Have you ever wondered why some people continue to make bad decisions? You see million-dollar celebrities doing it. You can see this action in government officials and business leaders. There are no discriminators. From the very rich to the poorest of the poor, we see people caught in a vicious cycle of bad decision making. Sadly, we can see it much closer than that. We witness relatives making bad decisions. Despite wise counsel, some people continue to make poor decisions.
The Decision Process
Decision making can make or break an organization. Joan Liebler and Charles McConnell, authors of Management Principles for Health Professionals, maintain that decision making is an essential element of management activities at all organizational levels. Gareth Jones and Jennifer George, authors of Contemporary Management, further argue that managers must respond to opportunities and threats. In fact, decision making is a process where individuals analyze and make determinations regarding a problem that is keeping with the organization’s goals and objectives.
Unfortunately, some people feel the decision making process is a solo operation. Some managers can be caught in this trap and disregard the expertise of their workers. Through series after series of bad decisions, the manager may continue on a merry ride of worsening consequences. Two things generally can stop this dead-end trap. The organization stops him or the organization tanks.
In going through a series of bad decisions, a wise person should gain insight. Unfortunately, some individuals who are in charge will learn nothing, thereby earning the label of a foolish manager. Every person, regardless of their background or social standing, can benefit from good decision-making techniques.
The Path Forward
Making the right decision is a difficult process. Like Governor Sanford, many managers don’t take enough time to evaluate short-term decisions for long-term consequences. No one will usually applaud your many good decisions; however, you will probably catch heat over the bad ones.
Les Brown, author of How to Become the Person You Always Wanted to Be-No Matter What the Obstacle, explains, “Your values are not set by government or church leaders. Your values give you consistency in the way you approach life…By holding to your beliefs, you can always stay on track toward your dreams.” Therefore, making good decisions goes to the heart of being an effective manager.
How do managers overcome the barriers of making bad decisions during uncertainty? Is it possible for a manager to involve their workers in critical decisions without giving up any authority?